14 Permits and Licences Needed To Open A Bar

You’ve chosen your bar name, developed your unique branding, and found your dream location. Before you can celebrate your grand opening, there are still a few technicalities to work out.

Prior to legally serving your customers, you need to obtain a number of bar permits and licences. Without these, your business faces the risk of fines or even closure. 

Although regulations vary from state to state, the general overview of the restaurant permits and licences necessary to open your bar remains the same. 

What Do You Need to Open a Bar?

Here's a quick rundown on steps to take to open a bar. You can also review our restaurant business plan for more information.

1. Business Licence

To open a legal business in Canada, you need a business licence. 

As a business selling liquor, you’ll need to obtain a certain type of permit or licence, depending on your province. For example in Ontario, you will need to apply for a Special Occasion Permit (SOP) from the Alcohol and Gaming Commission of Ontario (AGCO).

How to Get a Business Licence

Search for your province or territory + business licence to find your local application requirements. Make a note of renewal dates, as these vary between each province.  

How Much Does a Business Licence Cost?

The cost of a business licence for a bar in Canada can vary widely depending on the location of your bar, the type of food and alcohol you'll be serving, and the specific regulations of the province or municipality where you plan to operate. It's best to contact local authorities directly to confirm the full scope of costs.

2. Business Number (BN)

All businesses require a Business Number (BN) to legally operate in Canada. 

A BN is essentially a tax number that's issued by the Canada Revenue Agency (CRA) to help identify your business. The good news is that once issued, a BN never expires. However, if you experience significant changes in your business such as a change in ownership or closure and reopening, it's advisable to contact the CRA for guidance on how to proceed and whether a new BN is required.

How to Get A Business Number

You can apply for a BN via Business Registration Online (BRO): https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/registering-your-business/business-registration-online-overview.html

The online method allows you to receive your BN right away. If you prefer in-person, some provinces have Service Canada Centres or CRA offices where you can apply. The processing time for in-person applications can vary, but you might receive your BN on the spot or within a short period.

How Much Does a BN Cost?

It's free to get a BN. 

3. Use and Occupancy Permit

Once you’ve secured your bar’s location, you’ll need to obtain a Use and Occupancy Permit. This requires an inspection by your local government to verify that the building is safe for customers. 

How to Get a Use and Occupancy Permit

Each local government has varying jurisdiction. To start the process of obtaining a Use and Occupancy Permit, research your local government’s website and follow the steps shown online.

How Much Does a Use and Occupancy Permit Cost?

The cost depends on where your bar is located and can be based upon several factors, including the overall square footage of the building. In major cities like Toronto, Vancouver, or Montreal, where regulatory requirements are often more stringent, Use and Occupancy Permit fees could be in the range of $2,000 to $5,000 or higher. In medium-sized cities, you might be looking at a range of $500 to $2,000 or more.

4. Liquor Licence

Alcohol is the staple of your bar, so you’ll need a liquor licence to legally sell these beverages. As a bar in Canada that is primarily focused on serving alcohol, you will need to look into obtaining a primary liquor licence.

How to Get a Liquor Licence

Your province or territory's liquor control authority grants liquor licences. 

It’s best to start the application process well in advance of your planned opening date to account for any potential delays in the licensing process. Search for your local liquor control authority online and research the steps you need to take before applying. 

How Much Does a Liquor Licence Cost?

The cost of a liquor licence can vary significantly from one region to another. Some provinces may charge flat fees, while others may base fees on factors like seating capacity or sales volume. In addition to the initial licence fee, there may be ongoing annual or renewal fees, as well as fees for special events, extended hours of operation, and other circumstances.

5. Resale Permit

A vendor permit or reseller's permit enables your business to purchase wholesale products without paying sales tax. When you use these products to make items for resale (beverages), the tax is passed on to the customer at the point of purchase. These taxes are then collected by you and submitted to your local province or territory either monthly or quarterly. 

How to Get a Resale Permit

You will need to determine which sales taxes apply to your bar. 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 Resale Permit Cost?

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

6. Signage Permit

A sign is a key part of your bar branding and marketing efforts. But you need to obtain a signage permit from your local government. The requirements vary regarding the size of your sign, how it’s displayed, and your location. If you rent your building, you may have extra specifications to consider. 

How to Get a Signage Permit

Once you have approval from your landlord, apply for a signage permit from your local government. Search for signage permit + your city in Google and follow the instructions online. 

How Much Does a Signage Permit Cost?

A typical signage permit costs between $20 to $50 per sign. 

7. Music Licence    

Music is an integral part of your business. It sets the tone and atmosphere for your bar. Before you can play music or hire a DJ, however, it’s important to get a music licence. As songs are protected by copyright, you can face financial penalties without having a licence in place. 

How to Get a Music Licence

Music licences are normally obtained from performing rights organisations, such as the Society of Composers, Authors and Music Publishers of Canada (SOCAN) or the Performing Right Society (PRS). Alternatively, you can obtain licenced music from a business streaming service.

How Much Does a Music Licence Cost?

The cost of a music licence often depends on the type of recording you play, how many nights you play it, and which organisation or platform you choose. Performing rights organisation fees normally start from $500 annually. 

8. Live Entertainment Licence

Live events like holiday celebrations or singles nights can bring more customers through your doors. If you’re planning on hosting a fun live experience, you’ll need a live entertainment licence. 

If you’re opening a sports bar and plan on showing live games on the big screen, you’ll also need a commercial TV package as these events are copyright protected. There are some copyrighted material exceptions depending on the size of your bar.

Sections 27 and 28 of the Copyright Act outline rights and exceptions related to the reproduction and communication of copyrighted works. In addition, Section 3(1)(f) establishes the exclusive right of copyright owners to perform a work in public, including through communication to the public by telecommunication.

In Canada, there is no direct equivalent to the specific regulation regarding the number of televisions allowed in bars based on square footage. Licensing and regulations for television broadcasts, including sports events, can vary by province or territory, and they are typically governed by provincial liquor licensing authorities. 

How to Get a Live Entertainment Licence

Your provincial or territorial authority, or municipal government is responsible for granting live entertainment licences. If you’re planning on holding a live music event, you’ll still need to obtain an entertainment licence alongside a music licence. 

If you plan on showing live sports events, sign up for a commercial TV package and research the stipulations for copyright for bars and restaurants to ensure you comply. 

How Much Does a Live Entertainment Licence Cost?

The cost depends on your location (province or territory). Your bar’s maximum capacity can also be a factor. If your local municipality requires you to have a public hearing beforehand, this may cost extra and can depend on whether events will be indoors or outdoors, as well as the date and time and any costs for publishing notices and advertising to inform the public about the hearing.

9. Food Service Licence

As a business preparing and selling food and drink, you want to ensure the safety of your customers. The specific requirements for a food service licence will depend on the jurisdiction in which your bar is located, as well as the extent of food service you provide. For example, if you plan to have a full menu including cooked food items, a food service licence is likely to be required. However, if you plan on only providing snacks or pre-packaged items, requirements may differ. To determine your food service licence requirements, contact your local health department or regulatory agency. 

How to Get a Food Service Licence

Your local health department will issue you a licence once an inspection has taken place and you show that you meet their requirements. These vary depending on the province or territory, so do your research before applying. 

You’ll also need to give the name and address of your bar, in addition to the owner’s personal details. If a change of ownership or physical location occurs, you may need to renew your licence. 

How Much Does a Food Service Licence Cost?

The cost of obtaining a food service licence can vary significantly depending on location, number of employees, the size of your bar and the specific fees and regulations set by the local health authority.

10. Food Handler Certification

Employees who handle food in a commercial setting, including bar 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. Provinces and territories often have approved food safety certification programs that individuals can complete to obtain a food handler certificate. These programs may include in-person training, online courses, or a combination of both.

How to Get a Food Handler Certification

Search for your province or territory + food handler certification in Google to find the application process for your local health authority.

How Much Does a Food Handler Certification Cost?

The cost for a basic food handler certification program can range from approximately $50 to $150 CAD. This typically includes the training course and examination fee. The exact price may vary by province.

11. Health Inspection Permit

As your bar is selling beverages and possibly food to customers, you’ll need a health inspection permit. This proves that your business complies with sanitation regulations. Generally, a health inspection permit is needed for new constructions, but this depends on your province or territory.

How to Get a Health Inspection Permit

Request a health inspection from your local health authority. An Environmental Health Officer (EHO) or inspector will visit your bar to assess its compliance with food safety regulations, cleanliness, and overall safety. You will need to submit an application to your local health authority, which will require you to provide information about your bar's ownership, location, menu, food safety plan, and other relevant details.

How Much Does a Health Inspection Permit Cost?

Fees can vary by location and the size and type of establishment. Application fees can range from approximately $100 to $500 or more, depending on the jurisdiction.

12. Seller’s Permit

The requirement for a seller's permit or sales tax licence for a bar can vary by province or territory. The need for such a permit or licence is typically associated with the collection and remittance of the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST), which are federal sales taxes.

Bars in Canada are generally required to register for a GST/HST account with the Canada Revenue Agency (CRA) if they have annual taxable sales exceeding a certain threshold.

In some provinces, there may be a requirement to register for a provincial sales tax (PST) or retail sales tax (RST) account if applicable.

How to Get a Seller’s Permit

To determine whether you need a seller's permit or sales tax licence for your bar and to understand the specific requirements, you should firstly contact the CRA for guidance and registration information. You should also consult your provincial or territorial government's website or contact the relevant authority to determine if there are requirements for PST or RST registration and compliance specific to your location.

How Much Does a Seller’s Permit Cost?

Registering for a GST/HST account with the Canada Revenue Agency (CRA) is typically free. However, you will be responsible for collecting and remitting the applicable GST or HST on taxable sales. If your province has PST or RST, there may be costs associated with registering for a provincial sales tax account. These costs can vary by province and may include a registration fee.

13. Pool Table Licence

If you plan on opening a sports bar, you’ll no doubt want a pool table. In some areas, a pool table licence is required, which will determine the number of pool tables you have as well as the operating times. 

How to Get a Pool Table Licence

To discover if your local area requires you to have a licence, simply Google your municipality + pool table licence or billiards permit. 

How Much Does a Pool Table Licence Cost?

Fees can vary significantly depending on your location and the specific regulations of your municipality or jurisdiction, as well as factors such as the number of pool tables you have and whether there are any additional operational requirements or safety standards that need to be met. Contact your local municipality or regulatory authority to confirm the cost.

14. Fire Department Permit

Before you can open a bar in some provinces and municipalities, a fire department permit is required. This will verify safety procedures in the event of a fire, such as the number of fire extinguishers, unobstructed exits, and smoke detectors you need. The fire department will also notify you of the maximum number of patrons your bar can safely hold. 

How to Get a Fire Department Permit

Contact your local fire department to determine if you need a permit. 

How Much Does a Fire Department Permit Cost?

The cost will depend on your state and the size of your bar.  

Licences and Permits Across Canada

As you’ve seen from this guide, licences and permits for bars vary across the country. The city, municipality or province or territory where your bar is located largely determines your licence requirements and the fees you pay.

Research your province or territory’s website to discover which licences and permits are required before opening. Also, ensure that any licences and permits you hold are current, as the renewal process is often easier than the initial application.

Here are some tips for obtaining licences and permits in Ontario, Quebec and Alberta. These sections are not exhaustive; rather their purpose is to show a few examples of nuanced requirements in specific provinces and highlight the importance of doing your research fully before opening in your specific location. 

Getting Bar Licences and Permits in Ontario

Opening a bar in Ontario involves a combination of provincial and municipal regulations. It's crucial to consult with relevant authorities, such as the AGCO, your local municipality, and industry associations, to understand and meet all the necessary requirements.

As an example, make sure that your bar is accessible to individuals with disabilities in compliance with the Accessibility for Ontarians with Disabilities Act (AODA).

Your Next Steps

Licensing is a costly yet essential part of starting a bar business. Make sure you factor in these fees when working out your bar startup expenses, and plan well in advance to ensure you obtain everything needed in time for your launch. 

Starting with a bar business plan will help you to map out every step of your business journey, from creative to deadlines to menu design. 

To understand the exact bar licences and permits you need, it’s important to do diligent research beforehand as legislation varies between provinces and municipalities, and deadlines always come up more quickly than expected.

Opening a bar is an exciting venture. While applying and securing all the licences you need is a tiresome process, keeping your business on the right side of the law enables you to operate your bar with confidence, and saves you headaches and potential fines down the line. 

Related Resources

• How to Open a Bar
• How to Write a Bar Business Plan
• How to Design a Bar in Canada