Item - 2017.LS18.3

The Licensing and Standards Committee recommends that:

1. City Council direct the Executive Director, Municipal Licensing and Standards and the General Manager, Economic Development and Culture to conduct public consultations on the impact of expanding the application of the prepared meals exemption in the Holiday Shopping By-law to beyond restaurants to permit other retailers who serve prepared meals to operate on public holidays.

2. City Council direct the Executive Director, Municipal Licensing and Standards and the General Manager, Economic Development and Culture to conduct public consultations, and to request written submissions from the public and interested parties on each of the following:

a. Review the remaining exemptions in Toronto Municipal Code, Chapter 510, Holiday Shopping to ensure clarity and relevance (i.e. small retail business establishments and pharmacies);

b. The criteria required for tourist area exemptions in Toronto Municipal Code, Chapter 510, Holiday Shopping to permit Business Improvement Areas and major malls to operate on public holidays; and

c. The development of an application process for retailers to request an exemption from the provisions of Toronto Municipal Code, Chapter 510, Holiday Shopping to operate on public holidays.

3. City Council direct the Executive Director, Municipal Licensing and Standards and the General Manager, Economic Development and Culture to report to City Council, through a joint meeting of the Licensing and Standards and Economic Development Committees, with review and consultation findings by October 2017.

4. City Council direct the Executive Director, Municipal Licensing and Standards and the General Manager, Economic Development and Culture to develop an application process for retailers to request an exemption from Toronto Municipal Code, Chapter 510, Holiday Shopping in order to operate on public holidays.

5. City Council direct the Executive Director, Municipal Licensing and Standards and the General Manager, Economic Development and Culture to consider submissions from interested Business Improvement Areas and major malls for expedited exemption from the provisions of the Toronto Municipal Code, Chapter 510, Holiday Shopping.

6. City Council direct the Executive Director, Municipal Licensing and Standards to include consultation with worker representatives, including unions and labour stakeholders in order to ensure worker protection is considered as part of her forthcoming report on Toronto Municipal Code, Chapter 510, Holiday Shopping.

7. City Council direct the Executive Director, Municipal Licensing and Standards to include consultation with the Ontario/Toronto Coalition for Better Child Care about holiday shopping as part of her forthcoming report in October 2017.

8. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (April 10, 2017) from the City Solicitor remain confidential in its entirety, as it contains advice which is subject to solicitor-client privilege and relates to litigation or potential litigation.

At 4:35 p.m., the Licensing and Standards Committee recessed its public session to meet in closed session to consider this item as it relates to litigation or potential litigation, including matters before administrative tribunals, affecting the municipality or local board, and receiving of advice that is subject to solicitor-client privilege.

Upon the enactment of the City of Toronto Act ("COTA"), the City was given the authority to enact its own Holiday Shopping By-law, as the provincial Retail Business Holidays Act ("RBHA") would no longer apply to the City. On December 6, 2006 the City enacted a Holiday Shopping By-law, Chapter 510. The new By-law copied the same regulations found in the RBHA.

On September 30, 2015, the City Solicitor submitted a report to Council on a court ruling dealing with the City's Holiday Shopping By-law. The City had been unsuccessful in a prosecution of Longo Brothers Fruit Markets Inc. (Longo's), under Toronto Municipal Code, Chapter 510, Holiday Shopping for operating two locations on a public holiday.  The City appealed that decision, however, the court once again found in Longo's favour.  In both trials, Longo's successfully argued to the court that they met the exemption provided in the By-law for premises "selling goods or services in the form of, or in connection with, prepared meals". The City had historically taken the position that this exemption applied solely to restaurants.

The court decision noted the ambiguity in the prepared meals exemption as no definition exists of prepared meals in either the RBHA or COTA. Furthermore, section 97 of the COTA, prevents the City from regulating operating hours, including closing times, of business establishments involved in "the selling or provision of goods or services in the form of, or in connection with, prepared meals".

The changing nature of business practices in retail over time is now challenging the previously accepted convention of types of businesses that meet the prepared meals exemption. This is seen with the expansion of multi-purpose grocery stores such as Longo's, with extensive prepared meals for sale alongside other more traditional grocery store items. Further, some pharmacies are now moving towards a similar model and providing food and groceries for sale. This is presenting new challenges on how to apply the exemption.

In order to address the concerns raised in the Longo's court ruling and respond to the changing business practices of retailers, this report proposes that staff undertake a review, including public consultations on the impact of expanding the application of the prepared meals exemption in the Holiday Shopping By-law beyond restaurants so as to permit other retailers such as grocery stores who sell prepared meals to operate on public holidays. As part of the consultation, staff will seek input on the application of the prepared meals exemption for grocery stores (e.g. operating hours, partial closure, number of employees, etc.).  Staff will report back on the outcomes of the consultations by October 2017.

In the process of reviewing the outcomes of the Longo's court case, staff became aware that other exemptions may also benefit from a formal review.  This report also seeks direction from City Council to undertake a review, including public consultations, on the remaining existing exemptions and additional exemptions requested by stakeholders, including:

- Reviewing the existing exemptions to the Holiday Shopping By-law, such as those for small retail business establishments and pharmacies, to ensure clarity and relevance.

- Reviewing the tourist area exemption to permit Business Improvement Areas and major malls to operate on public holidays.

- Developing an application process for retailers to request exemptions from the Holiday Shopping By-law.

This report includes the results of input from meetings with retail industry, labour, Business Improvement Areas (BIAs), and small businesses. The stakeholder input was received from May 2016 to January 2017.
 

Legal Services was consulted in the preparation of this report.

This report provides further information to members of Council concerning the March 31, 2017 report from the Executive Director, Municipal Licensing and Standards and the General Manager, Economic Development and Culture.