On the recommendation of the undersigned, the Lieutenant Governor of Ontario, by and with the advice and concurrence of the Executive Council of Ontario, orders that:

whereas Ontario’s Small Cideries and Small Distillers have emerged as popular and fast growing parts of the beverage alcohol sector with Ontario being one of the largest cider and alcoholic spirits markets in Canada;

and whereas in the 2016 Fall economic statement, the government of Ontario committed to working with industry on the Premier’s Advisory Council on Government Assets’ recommendation “to consider ways to support small cider producers and small spirits producers to scale up”;

and whereas craft cideries and distillers have not enjoyed many of the benefits offered to small beer and wine producers and have noted the absence of a program to support growth and scale in their beverage alcohol categories;

and whereas the Government of Ontario has consulted with industry stakeholders, including the Ontario Craft Cider Association and the Ontario Craft Distillers Association, among others, and the industry stakeholders support the creation of this Program;

and whereas section 4 of the Ministry of Agriculture, Food and Rural Affairs Act provides the Minister with the authority in relation to the administration of laws relating to agriculture and food and all of their branches as well as such other powers and requires the Minister to perform such other functions and duties as are assigned to the Minister by the LGIC;

and whereassection 7(1) of the Ministry of Agriculture, Food and Rural Affairs Act allows the LGIC to establish, upon the recommendation of the Minister, a program for the encouragement of any branch of agriculture or food;

now therefore, and pursuant to sections 4 and 7(1) of the Ministry of Agriculture, Food and Rural Affairs Act, the program known as:

The Ontario Small Cidery and Small Distillery Program

is hereby established as of the date the LGIC signs this OIC for the encouragement of agriculture and food within Ontario.

Part I - Interpretation

Definitions

  1. For the purposes of this OIC, including its recitals, the terms below shall have the following meanings:

    "Administrator" means the entity selected to administer the Program or a Component thereof on behalf of the Minister;

    "Affiliates" means an affiliate as the term is used in, and for the purposes of, the Alcohol and Gaming Regulation and Public Protection Act, 1996;

    "AGCO"means the Alcohol and Gaming Commission of Ontario;

    "AgriCorp"means the without share capital corporation established in accordance with the AgriCorp Act, 1996, S.O. 1996, c. 17;

    "Applicant" means a Person who applies for funding under the Program;

    "Business Day" means any working day, Monday to Friday inclusive, but excluding statutory and other holidays on which the Government of Ontario has elected to be closed for business;

    "Component"means the Small Cidery Component or the Small Distillery Component, as the context requires;

    "Component Cap"means the maximum annual amount of grant funding available to all Recipients under a given Component;

    "Components" means the Small Cidery Component and the Small Distillery Component, collectively;

    "Fiscal Year" means the period between April 1 of a year and March 31 of the following year;

    "Funding Cap" means the maximum annual grant funding that a Recipient may be entitled to receive calculated in accordance with the Guidelines;

    "Guidelines"means the written document prepared by the Minister, or a third party in accordance with this OIC, that sets out the rules, terms and conditions for the operation of the Program, or any component thereof;

    "LCBO"means the Liquor Control Board of Ontario;

    "LGIC" means the Lieutenant Governor in Council;

    "Manufacturer's Licence" means a licence issued by the Registrar of Alcohol, Gaming and Racing that allows a producer of beverage alcohol to sell its products to the Liquor Control Board of Ontario for sale or distribution in its system or by other approved means;

    "Minister" means the Minister of Agriculture, Food and Rural Affairs or any such other Minister who may be designated from time to time as the responsible Minister in relation to this Program in accordance with the Executive Council Act unless the context indicates otherwise;

    "Ministry" means the Ministry of the Minister;

    "Ministry of Agriculture, Food and Rural Affairs Act"means the Ministry of Agriculture, Food and Rural Affairs Act, R.S.O. 1990, c. M. 16, as amended;

    "OIC" means this Order in Council;

    "On-site Retail Store Authorization" means an authorization issued by the Registrar of Alcohol, Gaming and Racing to the holder of a Manufacturer’s License to operate a store on the manufacturer’s production site for the retail sale of beverage alcohol made by that manufacturer which meets specified criteria;

    "Ontario" means Her Majesty the Queen in Right of Ontario, as represented by the Minister of Agriculture, Food and Rural Affairs, unless the context indicates otherwise;

    "Overpayment" means any Payment to which the Recipient is not entitled to receive at the time of the Payment or to which the Recipient ceases to be entitled to receive at any time after the Payment was made;

    "Payment" means the provision of funding under the Program;

    "Person" for the purposes of this OIC includes a sole proprietor, corporation, partnership and unincorporated association;

    "Program" means the Ontario Small Cidery and Small Distillery Program including all its Components;

    "Project" means an undertaking approved under the Program;

    "Recipient" means a Person who receives funding under the Program;

    "Small Cidery" means an alcoholic cider producer and its Affiliates with production of less than 30,000 hL of alcoholic cider annually available for sale in Ontario;

    "Small Distillery" means a producer of alcoholic spirits and its Affiliates with sales of less than 6,000 hL of alcoholic spirits annually in Ontario; and

    "Spirits Fully Produced in Ontario"means alcoholic spirits and alcoholic spirit products that have been produced in Ontario in accordance with the required manufacturing steps from start to finish in accordance with requirements set out in the most current version of the AGCO’s Distillery Retail Store Information Guide.

Purpose

  1. The purpose of the Program is to provide support to, and increase the competitiveness of, the Small Cideries and Small Distilleries as the respective industries scale up into medium and large businesses.
  2. The Program will consist of the following Components:
    1. The Small Cidery Component, which will provide financial support to eligible Small Cideries based on their volume sold to provide them freedom to scale up into a medium or large business;
    2. The Small Distillery Component, which will provide financial support to eligible Small Distilleries based on their volume sold to provide them freedom to scale up into a medium or large business.

Part II - Term and Review

Term of the Program

  1. This Program shall commence on April 1, 2017.
  2. This Program shall be reviewed by the Minister prior to March 31, 2020.
  3. Notwithstanding this OIC or the Guidelines, this Program shall terminate in the event there is an insufficient appropriation for any payment that is to be made under the Program. Where the Program terminates pursuant to this section of the OIC, the following rules shall apply:
    1. The Minister shall post a notice on the Ministry’s website indicating the Program has been terminated and the date that it was terminated. The Program shall be considered terminated as of the date indicated in the notice; and
    2. The Minister shall provide notice of the termination to any third party that is delivering the Program on behalf of the Minister or that has operational control over the Program (as the case may be) and that third party shall post notice of the Program’s termination on its website; and
    3. Any claims for a payment currently being considered as of the date of termination shall not be paid.
  4. Notwithstanding this OIC or the Guidelines, the LGIC may terminate this Program, or a Component thereof, at any time if the LGIC determines, in the LGIC's sole and absolute discretion that the Program, or a Component thereof, should not continue. Where the LGIC terminates the Program, or a Component thereof, pursuant to this section of the OIC, the following rules shall apply:
    1. The Minister shall post a notice on the Ministry’s website indicating the Program, or a Component thereof, has been terminated and the date that it was terminated. The Program, or a Component thereof, shall not be considered terminated until the notice required by this section of the OIC has been complied with; and
    2. The Minister shall provide notice of the termination to any third party that is delivering the Program, or a Component thereof, on behalf of the Minister or that has operational control over the Program (as the case may be), or a Component thereof, and that third party shall post notice of the Program’s, or a Component thereof, termination on its website; and
    3. Any claims for a payment currently being considered as of the date of termination shall, if they are otherwise eligible, be paid.
  5. For greater certainty, the termination of one Component of the Program pursuant to sections 6 or 7 of this OIC does not:
    1. Terminate all Components of the Program or the Program itself;
    2. Terminate any obligations that a Recipient may have under an agreement that the Recipient has entered into under the Program, or Component thereof; and
    3. Terminate any Overpayment repayment obligations a Recipient may have to Ontario under the Program.

Part III - Funding

  1. Funding for the Program shall be from the monies allocated to the Ministry for the purpose of the Program. The Minister may provide to any person any funding that is required, contemplated or permitted under the Program. The Minister may further provide for any administrative costs that the Minister determines are reasonable or prudent for the administration of the Program.
  2. Funding allocated to the Program shall be used only for the Program and for the costs of administering the Program.

Part IV - Administration of the Ontario Small Cidery and Small Distillery Program

Minister's General Administrative Authority

  1. (1) The Minister shall be responsible for the administration and delivery of the Program.This includes:
    1. Establishing standards and procedures for the delivery of all aspects of the Program;
    2. Monitoring the performance of all aspects of the Program;
    3. Establishing Guidelines for requirements of Program and Components that this OIC indicates may be set out in the Guidelines, including:
      1. Formula(s) for funding for the Program and Components;
      2. Funding Caps;
      3. Component Caps;
      4. Eligibility requirements for Applicants;
      5. Terms and conditions of the Program and Components;
      6. Reporting requirements;
      7. A possible maximum threshold for worldwide production or sales; and
      8. Additional application rules (as needed);
    4. date and time for submission of applications;
    5. Establishing rules, terms and conditions for making payment of funds under the Program;
    6. Approving anything that needs to be approved for the Program; and
    7. Carrying out all other administrative functions required for the successful operation of the Program.

    (2) The Minister may create Guidelines for the Components provided those Guidelines do not conflict with anything contained in this OIC. For the purposes of determining whether the Guidelines conflict with this OIC, a conflict will be found if the Guidelines provide for something that is prohibited under this OIC or if the Guidelines provide that something is not needed which is strictly required under this OIC. A conflict shall not, however, exist if the Guidelines set out additional requirements that must be followed in order for an Applicant to be eligible for funding under the Program.

    (3) Where the Minister creates Guidelines for a Component those Program Guidelines shall be posted on the Ministry’s website.

    (4) The Minister may amend the Guidelines. Where the Minister amends the Guidelines the following rules shall apply:

    1. A summary of the changes to the Guidelines shall be posted on the Ministry’s website;
    2. Any changes shall be clearly set out in the Guidelines;
    3. The updated Guidelines shall be posted on the Ministry’s website; and
    4. Any changes to the Program shall be effective as of the date set out in the Guidelines, or, if no date is set out, as of the posting of the Guidelines onwards. In no case shall the guidelines have any retroactive effect. For greater clarity, payments may be calculated based on data from a date previous to the effective date set out in the Guidelines, and such calculations shall not be considered to have a retroactive effect;

    Third-Party Delivery Agent or Third-Party Program Operator

  2. The Minister may enter into agreements with third parties, which may include but not be limited to AgriCorp, to deliver, administer or take operational control of any Component on behalf of the Minister.
  3. If the Minister enters into an agreement with a third party to deliver, administer or take operational control of a Component on the Minister’s behalf, the Minister shall enter into an agreement with that party which will provide, at a minimum, the following:
    1. The roles and responsibilities of the Minister and the third party in relation to the Component;
    2. The money that the third party is able to receive for its work in relation to the Component;
    3. Performance measures, if applicable and appropriate;
    4. Reporting and audit requirements; and
    5. Provisions for corrective action to address any events of default.
  4. The Minister shall require a third party that is taking operational control of a Component to create Guidelines for the Component the third party may be delegated to operate. The Minister shall require the third party to ensure that the Guidelines do not conflict with anything contained in this OIC. For the purposes of determining whether the Guidelines conflict with this OIC, a conflict shall exist if the Guidelines provide for something that is prohibited under this OIC or if the Guidelines provide that something is not needed which this OIC requires. A conflict shall not, however, exist if the Guidelines set out additional requirements that a Person must follow in order to be eligible under the Program or to receive a payment under the Program.
  5. The Minister shall require the third party to post the Guidelines on the third-party’s website.
  6. The Minister may allow the third party to amend the Guidelines. Where the third party amends the Guidelines, the following rules shall apply:
    1. A summary of the changes to the Guidelines shall be posted on the third party’s website;
    2. The changes shall be set out in the Guidelines;
    3. The amended Guidelines shall be posted on the third party’s website; and
    4. Any changes to the Program shall be effective as of the date set out in the Guidelines, or, if no date is set out, as of the posting of the Guidelines onwards. In no case shall the guidelines have any retroactive effect.
  7. The Minister or a third party selected by the Minister, as the case may be, has all necessary authority to operate the Program or Component thereof.
  8. When exercising any powers granted under or complying with requirements set out in this OIC, the Minister, or a third party, as the case may be, shall do so in compliance with any requirements of law, including the requirements set out in this OIC and the Guidelines.

Part V - The Small Cidery Component

Funding of the Small Cidery Component

  1. (1) The Small Cidery Component provides grants for Small Cideries.

    (2) Funding under the Small Cidery Component for each Recipient will be calculated using a formula that is based on the volume of alcoholic cider that the Applicant sells through the LCBO that is “Ontario Wine” as defined in section 1 of the Liquor License Act, R.S.O. 1990, c. L. 19 and subsection 1(2) of the General Regulation (Reg 718) made under the Act. The funding formula will be set out in the Guidelines and may provide different levels of funding for different levels of sales. The payments may be reduced once the Component Cap is reached.

    (3) Under no circumstances shall a Recipient receive more than the Funding Cap determined in accordance with the Guidelines in each year.

    Eligibility Requirements under the Small Cidery Component

  2. (1) The Small Cidery Component shall be an application-based program.

    (2) Funding under the Small Cidery Component shall be available to all eligible Small Cideries as set out below. The Minister may set out additional eligibility requirements, application and Program rules (as needed) in the Guidelines to ensure that funding is distributed fairly.

    (3) Applicants shall meet all eligibility requirements set out in the Guidelines.

    (4) At a minimum, all Applicants shall meet the following eligibility criteria:

    1. Be a Person;
    2. Meet the definition of Small Cidery based on production in the last 12 month period prior to applying to the Program or be in their first year of production;
    3. Produce “Ontario Wine” as defined in section 1 of the Liquor License Act, R.S.O. 1990, c. L. 19 and subsection 1(2) of the General Regulation (Reg 718) made under the Act;
    4. Not have worldwide production or sales of alcoholic cider, including from its Affiliates, greater than the threshold set out in the Guidelines, where such a threshold has been set out;
    5. Have a Manufacturer’s Licence;
    6. Apply to the Program using a Ministry-approved application form;
    7. Submit the application form by the date and time indicated in the Guidelines;
    8. Agree to comply with the terms and conditions of the Program, as set out in this OIC and the Guidelines;
    9. Have appropriate governance structures, accountability and control processes in place to administer and manage the grant funds; and
    10. Be in compliance with and remain in compliance with all applicable federal, provincial and municipal laws.

    (5) Program Recipients may be required to complete a benchmarking survey at the end of each year in which funding is received. The satisfactory completion of the survey shall be a condition of receiving funding in any subsequent year of the Program.

Part VI - The Small Distillery Component

  1. (1) The Small Distillery Support Component provides grants for Small Distilleries.

    (2) Funding under the Small Distillery Component for each Recipient will be calculated using a formula that considers a number of criteria including: the volume of alcoholic spirits that the Applicant sells through the LCBO; the volume of alcoholic spirits that the Applicant sells through on-site retail stores pursuant to the Recipient’s On-site Retail Store Authorization; the volume of those Spirits Fully Produced in Ontario; and the volume of those spirits produced in Ontario. The funding formula will be set out in the Guidelines and may provide different levels of funding for different classes of sales. The payments may be reduced once the Component Cap is reached.

    (3) Under no circumstances shall a Recipient receive more than the Funding Cap determined in accordance with the Guidelines in each year.

    Eligibility Requirements under the Small Distillery Component

  2. (1) The Small Distillery Component shall be an application-based program.

    (2) Funding under the Small Distillery Component shall be available to all eligible Small Distilleries as set out below. The Minister may set out additional application rules (as needed) in the Guidelines to ensure that funding is distributed fairly.

    (3) Applicants shall meet all eligibility requirements set out in the Guidelines.

    (4) At a minimum, all Applicants shall meet the following eligibility criteria:

    1. Be a Person;
    2. Meet the definition of Small Distillery based on sales in the last 12 month period prior to applying to the Program or be in their first year of production;
    3. Not have worldwide production or sales of alcoholic spirits, including from its Affiliates, greater than the threshold set out in the Guidelines, where such a threshold has been set out;
    4. Have a Manufacturer’s Licence;
    5. Have an On-site Retail Store Authorization;
    6. Apply to the Program using a Ministry-approved application form;
    7. Submit the application form by the date and time indicated in the Guidelines;
    8. Agree to comply with the terms and conditions of the Program, as set out in this OIC and the Guidelines;
    9. Have appropriate governance structures, accountability and control processes in place to administer and manage the grant funds;
    10. Be in compliance with and remain in compliance with all applicable federal, provincial and municipal laws; and
    11. Have self-reported on the Applicant’s on-site store sales for alcoholic spirits, as required, and must sign an attestation confirming the accuracy of that information, as required.

    (5) Program Recipients may be required to complete a benchmarking survey at the end of each year in which funding is received. The satisfactory completion of the survey shall be a condition of receiving funding in any subsequent year of the Program.

Part VII - Reporting and Audits

  1. A Person that has applied to the Program shall retain all records relating to any Payments under the Program for a period of at least seven (7) years from the date in which the Person filed the application or the date on which the Person received a Payment under the Program, whichever is the latter.
  2. A Person that has applied to the Program consents to any audits that may be conducted in relation to the Program so that any claims for Payment can be verified or for the enforcement of the terms and conditions of the Program, as set out in this OIC and the Guidelines. The Person further consents to provide all necessary information required to verify and administer the Program.
  3. A Person that has applied to the Program shall provide reasonable assistance to any auditor conducting an audit under that Program. This includes allowing access to any person, place or thing required for auditing purposes.
  4. A Person that has applied to the Program authorizes the Minister or the third party delivering the Program on behalf of the Minister (as the case may be), including their respective delegates, to obtain information from any government department/ministry, agency or third party for the purposes of verifying the eligibility of any Payment that may be provided under the Program or any other information that the Person has provided under the Program.
  5. A Person that has applied to the Program consents to the Minister or the third party delivering, administering or operating the Program on behalf of the Minister (as the case may be), including their respective delegates, to release information that they may have collected to any government department/ministry, agency or third party for the purposes of verifying the eligibility of any Payment that may be provided under the Program or any other information that the Person has provided under the Program.
  6. A Person that has applied to the Program as a sole proprietor, as a partner within a partnership or as a member of an unincorporated authorizes the Minister or a third party delivering the Program on behalf of the Minister (as the case may be), including their respective delegates, to collect and use that Person’s Social Insurance Number where it is necessary for the purposes of ensuring the Person pays taxes on any Payments received under the Program, auditing the Person or collecting overpayments from the Person. The Person further consents to the Minister or the third party delivering the Program on behalf of the Minister (as the case may be), including their respective delegates, to release their Social Insurance Number where it is necessary for the purposes of ensuring the Person pays taxes on any Payments received under the Program, auditing the Person or collecting overpayments from the Person.

Part VIII - General

  1. Applying to this Program for a Payment does not create any legal or other right to any Payment under this Program.
  2. Any Payment a Person may be eligible to receive under this Program may be set off against any existing debt that that Person owes to Her Majesty the Queen in Right of Ontario.
  3. If a Person receives an Overpayment, that Overpayment shall constitute a debt that is owed to Her Majesty the Queen in Right of Ontario and is payable immediately upon demand.
  4. Any Person that provides false or misleading information under the Program shall have his/her/its/their participation in the Program immediately terminated. Any Payments that the Person received under the Program, including those provided prior to the submission of the false or misleading information, shall be deemed to be an overpayment and shall constitute a debt that is owed to Her Majesty the Queen in Right of Ontario payable immediately upon demand.
  5. Her Majesty the Queen in Right of Ontario may charge interest on the debt that a Person owes as a result of receiving a Payment (through administrative error or otherwise) that that Person was not otherwise eligible to receive at the applicable interest rate that is charged by Her Majesty the Queen in Right of Ontario.
  6. The right of set off is in addition to any other legal remedies that Her Majesty the Queen in Right of Ontario may have at law, equity or otherwise to recover any debt that a Person may owe to Her Majesty the Queen in Right of Ontario as a result of that Person receiving a Payment (through administrative error or otherwise) under this Program that that Person was not otherwise eligible to receive.
  7. Funding under this Program is being provided in connection with a social and economic policy and this Program shall be deemed to be a social or economic program.
Ministry of Agriculture, Food and Rural Affairs

Approved and Ordered: February 02, 2017