Toronto’s new neighbourhood retail rules were promoted as a way to bring small shops and services closer to residents. But there is a less obvious consequence: once retail and restaurant uses are permitted in residential areas, the City has limited control over what kind of businesses can open.
In a December 16, 2024 Toronto Star article about the proposed changes, City Manager Michael Noble acknowledged that allowing retail stores and restaurants into residential neighbourhoods could lead to cannabis stores and businesses applying for liquor licences.
“There is nothing we’re doing to encourage alcohol or cannabis sites,” Noble said. “But we don’t have the ability to (prevent it). Any retail store, anywhere in the city, theoretically can be used for a cannabis site, or someone could apply for a liquor licence. And that applies here.”
Bars
It is important to understand that the City does not issue liquor licences.
Once a restaurant, café or other eligible food-service business is permitted under Toronto’s zoning, the owner can apply to the Alcohol and Gaming Commission of Ontario (AGCO) for a liquor licence to serve alcohol on site.
Residents can object to the application, but the decision to grant the liquor licence is made through the provincial licensing system, and NOT by the City of Toronto.
In practical terms, the province has almost never declined to grant a liquor licence over the objection of neighbours.
Once the zoning for such activity has been approved by the municipality, it’s difficult to argue that a liquor license may not be suitable on the basis that it’s a residential area.
In fact, the City of Toronto made the decision last year to change the Residential Zoning by-law specifically to allow such activity on designated residential streets. By doing so, they have opened the door to allow liquor-serving establishments to operate on those streets even if those streets have been residential for decades.
This would include bars as well as restaurants and cafes.
The by-law changes also do not provide any new protections or restrictions on those types of businesses. There are no mandatory operating hours, for example. And there are no restrictions on alcohol service close to a school or any other sensitive location (like a mosque or a church).
Cannabis
Like alcohol, cannabis retail stores are licensed by the Province through the Alcohol and Gaming Commission of Ontario (AGCO). They are NOT licensed by the City of Toronto.
When cannabis was legalized, municipalities were given the opportunity to opt out of cannabis retail. Toronto chose not to opt out.
Provincial law places an important limit on municipal zoning authority. The Cannabis Licence Act says that a municipal by-law cannot distinguish between a retail use that sells cannabis and one that does not. In plain English, if retail is allowed at a location Toronto cannot use zoning to prohibit cannabis sales.
The only restriction is that a cannabis store cannot be located within 150 metres of a school. There is no provincial minimum distance between cannabis stores.
Cigarettes, alcohol and vape products
Tobacco and vape products can be sold from retail stores permitted under the new zoning changes, subject to the provincial laws and regulations governing the sale of these products.
Again, the zoning rules permit retail stores and do not dictate what kind of businesses may choose to open.
Although City officials and Mayor Chow promoted a vision of the friendly local corner store or café, businesses who take advantage of the new zoning rules could also be corporate franchises or liquor stores or vape shops. Ontario already permits convenience stores to sell alcohol.
City Council also acknowledged that bars and cannabis stores are permitted
The possibility of cannabis stores and liquor sales was clearly on Council’s radar when the zoning changes were approved last year.
Council directed the City to work with the Province to consider changing its laws so that Toronto could have more control over where cannabis stores and liquor sales could operate in residential neighbourhoods.
But asking the province to make those changes is not the same as having those protections in place before changing the by-law.
Council opted to proceed with the new zoning rules rather than waiting to see whether the province could provide those additional powers and protections for residents.
Below are the motions that Council voted to include:
- 8. City Council request the Ministry of the Attorney General to initiate the process for amendments to the Cannabis License Act, 2018 and/or any applicable regulations or ministry directives for the purpose of restricting the location of cannabis retail stores within lands designated as Neighbourhoods in the City’s Official Plan, including options to limit the total number of cannabis retail stores per ward, and direct the City Manager, the City Solicitor and the Chief Planner and Executive Director, City Planning, to work with the Ministry to support this request, and report back through the monitoring program.
- 9. City Council request the Ministry of the Attorney General to initiate the process for amendments to the Liquor Licence and Control Act, 2019 (LLCA), and/or any applicable regulations or ministry directives for the purpose of restricting the granting of Liquor Sales Licenses and Convenience and Grocery Store licenses within lands designated as Neighbourhoods, in the City’s Official Plan and direct the City Manager, the City Solicitor and the Chief Planner and Executive Director, City Planning, to work with the Ministry to support this request, and report back through the monitoring program.