15 Licences and Permits Needed to Open a Restaurant

Sam Kusinitz

Sam KusinitzAuthor

Opening a restaurant is neither a short nor a simple process.

Once you've nailed down a restaurant idea, found your ideal restaurant location, and pitched your restaurant business plan to investors, the most painstaking part of the process begins: licensing.

Acquiring all of the necessary food licences and permits involves a lot of paperwork and patience. It takes time for each and every one to be approved.

It's not fun, but it is abs`olutely necessary. This guide covers the licences and permits needed to open a restaurant in Canada.

Licences and Permits Required to Open a Restaurant

  • Restaurant Registration
  • Employer Registration Number (ERN)
  • Sign Permit
  • Music Licence
  • Value-Added Tax (VAT)
  • Planning Permission  
  • Liquor Licence
  • Skip Permit
  • Live Entertainment Licence
  • Pool Table Licence

What Do You Need to Open a Restaurant?

1. Business Licence

Step one: a business licence. This is required to open and operate any business in Canada.

This licence legitimises new businesses as legal entities. Depending on the specific location of your new restaurant, you may be required to pay a percentage of your total sales or a flat yearly fee. 

How to Get a Business Licence

You can confirm by searching on https://services.bizpal-perle.ca/ and entering your location and industry. And don’t forget: usually, you will need to renew your licence annually or pay by a certain deadline..

How Much Does a Business Licence Cost?

There is often a cost of registration of approximately $200 at a federal level in Canada. Provincial costs cal vary from $100-$400 approximately. 

2. Business Number (BN)

Like a business licence, all businesses must also obtain a Business Number (BN) in order to operate in Canada. A BN is assigned by the Canada Revenue Agency (CRA) and it is really just a tax ID number.

How to Get an Employee Identification Number

You can apply for BN via Business Registration Online (BRO).

How Much Does an EIN Cost?

The cost depends on the province or territory and the type of business you are setting up. However, typically the cost ranges from $80 to $200.

3. Use and Occupancy Permit

Once your location has passed the final building inspection, the local building or zoning department in your city will issue a certificate of occupancy. The certificate of occupancy certifies that the building has been properly constructed and maintained.

How to Get a Use and Occupancy Permit

The procedure for obtaining a use and occupancy permit varies depending on the province or territory and the specific municipality, as well as the building's structure. Search for your municipality + use and occupancy, and follow the steps on your municipal or regional authority's website.

How Much Does a Certificate of Occupancy Cost?

The cost of obtaining a 'use and occupancy permit' for your restaurant in Canada can vary around $600 and depends on the province or territory where your restaurant is located and the specific requirements of the local municipality.

4. Food Service Licence

Food service licences are generally issued by the city or county health department. The health department will make an in-person visit to your establishment to ensure that you are following all restaurant food safety regulations. Once this licence is obtained, the health department will continue to make regular visits to inspect your restaurant. 

And make sure to keep up to inspection standards: if you fail an inspection at any point, you could risk being stripped of your food service licence.

How to Get a Food Service Licence

You can obtain a food vendor's licence application from your local health department, either online or in person. You can apply for a temporary, fixed, or mobile food service licence. When applying, you'll likely need the name of your restaurant, an address for a permanent kitchen facility (even for food trucks), and the owner's personal information. Your food service licence may expire automatically in certain locations, so make sure you read the fine print and renew your licence.

How Much Does a Food Service Licence Cost?

The fee for a food service licence can vary by location and the type of service you want to offer but generally is around $250.

5. Sign Permit

Your sign is an important part of building your brand as part of your restaurant marketing plan. Before you put up any signs to draw attention to your restaurant, you will need a sign permit from the city government. The specifications around what is acceptable with regards to size, location, and lighting vary by city. If you rent or lease the building, it is also a good idea to get written approval from your landlord in addition to the official sign permit.

How to Get a Sign Permit

Often, outdoor signs need to be approved by your local government. In Temeculaca, CA for example, business owners must hire a licenced contractor to design, install, and permit signage, and then bring the design ideas to the Planning Department in City Hall for approval.

How Much Does a Sign Permit Cost?

The cost for a sign permit in Canada starts at around $300 and depends on the type of sign. 

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6. Music Licence

Music is essential to a restaurant experience: adding to the ambiance, mood, and individual aesthetic. To play music in your restaurant, you'll need a music licence to avoid copyright infringement. This includes live music, as well as music from a CD, or streaming service.

The fines for playing copyrighted music without a licence can range from $750 to $30,000

Plus, nobody wants to get sued by Beyoncé. To protect your business from these fines, make sure you’ve secured a music licence before you hire that DJ or host a karaoke night.

How to Get a Music Licence

You could pay the Society of Composers, Authors and Music Publishers of Canada (SOCAN) or the Performing Right Society (PRS) directly on their sites, or get a licenced music solution that pays these fees on your behalf.

How Much Does a Music Licence Cost?

Rates for restaurants, nightclubs, and bars depend on whether the music is live or recorded, whether it's audio-only or audiovisual, the number of nights per week music is offered, and several other factors. To get an idea, a 150ft² space costs $17.20 per year.

7. Resellers Permit

A vendor permit or reseller's permit allows your restaurant to make certain nontaxable purchases (wholesale food inventory, for example) if these items are purchased for use in the manufacture of products for resale (meals). This way, a reseller's permit prevents the double collection of sales tax on these types of products; rather than collecting sales tax on the product when you buy it, it's collected when your customer buys it. The provincial or territorial tax authority then requires the business to report regularly on sales tax collected and pay it to the province/territory.

How to Get a Reseller's Permit

You will need to determine which sales taxes apply to your restaurant. In most provinces and territories, the two main types of sales taxes are the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). Some provinces have their own Provincial Sales Tax (PST) in addition to the federal GST. As discussed in section 2, register for a Business Number. This serves as your unique identifier for tax purposes. Apply for a GST/HST account online through the CRA's website using the "Business Registration Online" (BRO) service. Alternatively, you can complete Form RC1, Request for a Business Number, and mail it to the CRA.

How Much Does a Reseller's Permit Cost?

The cost of obtaining a GST/HST account (reseller's permit) in Canada is generally free.

8. Building Permit

If you are constructing a new building, making significant renovations, or altering the layout of an existing building for your restaurant, you may need to obtain building permits from the local building department. Building permits ensure that the construction work meets safety and building code standards.

How to Get a Building Permit

Contact the Local Building Department: Begin by contacting the building department of the local municipality or city where your restaurant will be located. They will provide you with information on the application process and the specific requirements for obtaining a building permit.

  • Prepare Your Building Plans: You will need to prepare detailed building plans that show the proposed layout and construction of your restaurant. The plans should include architectural drawings, floor plans, elevation views, structural details, electrical plans, plumbing plans, and any other relevant information.
  • Complete the Permit Application: Obtain the building permit application form from the local building department or download it from their website. Fill out the application form with accurate and complete information.
  • Submit the Application and Plans: Submit the completed permit application form and all necessary building plans to the local building department. You may need multiple copies of the plans, as they will be reviewed by various departments, including planning, fire, health, and engineering.
  • Pay the Application Fee: There is usually an application fee associated with obtaining a building permit. The fee varies depending on the scope and complexity of your restaurant project.
  • Plan Review: The building department will review your application and building plans to ensure they comply with building codes, zoning regulations, health and safety requirements, and other relevant standards.
  • Obtain Approval: If your plans meet all the necessary criteria, you will receive approval for your building permit. This approval may come with conditions or additional requirements that you must fulfill during the construction process.
  • Start Construction: Once you have obtained the building permit, you can begin the construction or renovation work on your restaurant. It is essential to adhere to the approved plans and any conditions specified in the permit.
  • Inspections: Throughout the construction process, the building department will conduct inspections to ensure that the work is being done according to the approved plans and complies with building codes and regulations.
  • Final Inspection and Certificate of Occupancy: After completing the construction, a final inspection will be conducted. If everything is satisfactory, you will receive a Certificate of Occupancy, which allows you to legally operate your restaurant

How Much Does a Building Permit Cost?

The cost of a building permit depends on your province, but can be a minimum of $292 for non-residential properties.

9. Food Handler Certification

Not only does the building need a health permit; the employees handling food and beverages need one too. Health Canada has specific training resources for employee health and food protection. Usually, employees must complete a province-approved food handler’s course and purchase a food handler’s permit. In Vancouver, for example, you could try FOODSAFE as a resource. 

However, there is no specific "employee health permit" required for employees to work in a restaurant in Canada. But in some provinces or territories, individuals who handle food in a commercial setting, including restaurant staff, may be required to obtain food handler certification or training. Food handler certification ensures that employees have received proper training in food safety and handling practices to prevent foodborne illnesses.

10. Liquor Licence

If you plan to serve alcoholic beverages, you will need to apply for a liquor licence. The specific types of liquor licences may vary slightly from one province or territory to another, as each jurisdiction has its own liquor control authority responsible for regulating alcohol-related activities. Depending on the location, it can take months to complete the application process and receive a liquor licence from the relevant liquor control authority

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11. Valet Parking Permit

If you are planning on opening a fine dining or full-service restaurant, you may wish to offer valet parking to guests. However, in some municipalities you will need to apply for a valet parking permit in order to do so. 

How to Get a Valet Parking Permit

To apply, you will need to present the local municipal or provincial authorities with a detailed plan of the proposed pick-up/drop-off area that shows the number of spaces required as well as a letter of agreement between your chosen valet operator and the restaurant stating financial agreements including how and when a guest pays for the service.

How Much Does a Valet Parking Permit Cost?

They range widely depending on the municipality or province where your restaurant is located, so it's best to confirm with the local municipal or provincial authorities responsible for parking regulations and permits in your area. 

12. Temporary Bin Placement Permit

Not often considered, but often needed, the temporary bin placement permit allows your restaurant to situate a municipal garbage bin outside your kitchen, where chefs can dispose of food waste. 

The stipulations and cost of the temporary bin placement permit depend on the size of the bin, the exact placement of it, and the restaurant location.

How to Get a Temporary Bin Placement Permit

This process varies widely city to city, so google "your city" and "temporary bin placement permit" to find out which governing organisation manages this permit in your city. The required forms should typically be found online.

How Much Does a Dumpster Placement Permit Cost?

To find out the exact cost of a temporary bin placement permit in your area, you should contact the local municipal or city authorities responsible for waste management and permits. They can provide you with detailed information on the specific fees and requirements for obtaining a permit to place a temporary bin on public property or other designated areas.

13. Live Entertainment Licence

Live events are a great way to bring in new guests to your restaurant. 

If you plan to host live events in your restaurant or bar, then you will need to apply for a live entertainment licence. 

How to Get a Live Entertainment Licence

The licensing authority in your province or territory approves annual entertainment licences where food or drink is served on the location’s premises.

How Much Does a Live Entertainment Licence Cost?

The cost of a live entertainment licence varies from city to city and province to province and depends on the type of live music you want to host. For example The Society of Composers, Authors and Music Publishers of Canada (SOCAN) charge and % on the ticket value for a live entertainment event. Contact SOCAN for more info. 

14. Pool Table Licence

Some provinces and municipalities require restaurants and bars to apply for a pool table licence in order to offer a pool table to customers. The applicant will be considered based on location (is there a high amount of pedestrian traffic or parking traffic) and can limit the hours of operation of the pool table and the number of pool tables allowed.

How to Get a Pool Table Licence

Search up "your city" and "pool table licence" or "billiards table licence" to find out if your local area requires them. If they do, seek out the forms and supporting documents required and submit them to the city.

How Much Does a Pool Table Licence Cost?

To find out the exact cost of a pool table license for your restaurant, you should contact the local licensing authority or your local council. They will be able to provide you with detailed information on the specific fees and requirements for obtaining a license to operate pool tables or other amusement machines in your area

Licences and Permits Across Canada

As you've certainly learned throughout this article, licences and permits for restaurants vary across provincial lines. 

Business owners need to research their own provincial or territorial, and municipal regulations, as these all vary depending on your restaurant’s location. Generally, visiting your province or territory's website can help you find out which permits and licences you need.

Also, be sure to keep your licence current. “Some licences and permits expire after a set period of time. Keep close track of when you need to renew them — it's often easier to renew than it is to apply for a new one

Here are a few tips for getting restaurant licences and permits in Ontario — please note that these sections show a few examples of province-specific requirements, and are not exhaustive lists of everything you might need.

Getting Restaurant Licences and Permits in Ontario

As an example, below is a general outline of the process in Ontario, but keep in mind that specific requirements and procedures may vary depending on the type of restaurant and the municipality in which you are located.

  • Business Registration: Before obtaining any licences or permits, you will need to register your restaurant as a business with the government of Ontario. You can do this through the Ontario Business Registry (ONBIZ) or the ServiceOntario website.
  • Choose the Right Location: Select a suitable location for your restaurant that complies with zoning and land-use regulations. Ensure the premises meet all safety, health, and building code requirements.
  • Obtain Health and Safety Permits: Restaurants in Ontario must meet health and safety standards. You'll need to apply for health permits from your local public health unit. This involves inspections to ensure that your restaurant meets food safety and sanitation standards.
  • Liquor Licence: In Ontario, the licensing authority is the Alcohol and Gaming Commission of Ontario (AGCO). The application process involves various requirements, including background checks and public notice postings.
  • Building Permits: If you are making renovations or changes to the building or premises, you may need building permits. Check with your local municipality's building department to determine if any permits are necessary.
  • Fire Safety Inspection: You may need to undergo a fire safety inspection to ensure your restaurant complies with fire codes and regulations.
  • Business Insurance: Obtain appropriate business insurance to cover potential risks and liabilities.
  • Employer Obligations: If you plan to hire employees, ensure you comply with all labour laws, including employment standards and worker safety requirements.
  • Music and Entertainment Licences: If you plan to have live music or entertainment in your restaurant, you may need additional licenses from SOCAN or other licensing agencies.
  • Additional Permits: Depending on the specific services or activities you offer (e.g., outdoor patio, signage, valet parking), you may need additional permits or approvals from the local authorities

This procedure is similar for other provinces and territories, with the main differences being the specific government bodies and licensing authorities you will need to work with. For example, in Quebec, business registration is managed via the Registraire des entreprises du Québec (REQ). If a liquor licence is required, you will need to apply from the Régie des alcools, des courses et des jeux (RACJ).

Your Next Steps

If you've been adding in your head while reading this post, you know that all in all, the process of licensing can cost well over $1,000 before you open doors, and should be factored into your restaurant numbers and metrics. And make sure to plan ahead, because it can take 2-3 months or even longer to get everything approved. 

It’s an investment, but an exciting one — that will get you started on your way to opening up that new concept. Make sure to start with a restaurant business plan to get every step planned out.

Download your free restaurant business plan template, and if you're ready, start applying for these food licences and restaurant permits now. 

These are only some of the primary licences and permits restaurants must acquire to open and operate legally. The exact laws and regulations for each licence are often specific to different municipalities, provinces or territories.

Make sure that you understand all of the various  licenses you will need on the provincial or territorial, and municipal level. It can be a tedious and drawn-out process, but securing all of the necessary permits is a critical step towards opening your new restaurant and avoiding unnecessary penalties.

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