Does my CRA excise licence transfer when I sell my brewery, winery or distillery?

Under the Excise Act, 2001, section 14, subject to the regulations, the Minister may on application issue a spirits licence or a wine licence to a person, among other licences. Under section 23(3), on issuing a licence or at any later time, the Minister may, subject to the regulations, specify the activities that may be carried on under a licence and the premises where they may be carried on. This page covers the federal licence only. Your province’s liquor regulator decides the provincial one, and the answer on transferring a liquor licence covers that side.

Brewers: the CRA’s rule in ED200-1

CRA circular ED200-1 says that for a change of ownership or legal entity, for example where a proprietorship incorporates, the existing brewer’s licence is no longer valid. A new licence application must be approved before the new entity starts brewing operations. The circular also says a licensee must notify their regional excise office of any changes to the information provided in the licence application.

Spirits and wine: the CRA’s rule in EDM2-2-1

CRA memorandum EDM2-2-1 says that where a change of legal entity occurs, the existing licence will be cancelled and the new legal entity will have to apply for a new licence on Form L63A, L63T or L63W. If the new legal entity is applying for a spirits licence or a tobacco licence, it must also submit replacement security. The memorandum separately says that when corporations merge or amalgamate, a new licence may not be required, but the CRA must be notified and the certificate of amalgamation provided.

Is your deal a change of ownership or legal entity?

The pages cited here do not address a sale of shares or a sale of assets by name. They speak of a change of ownership or legal entity (ED200-1) and a change of legal entity (EDM2-2-1). EDM2-2-1 also lists a change in officers and directors among the changes a licensee must report to the regional excise office in writing without delay. Which of these your deal triggers is a question for your lawyer and the regional excise office.

What to ask

• The regional excise office: which application the buyer’s entity files, and how early it can be filed.
• Your lawyer: how the closing date and conditions should reflect the licence approval, and whether your structure is a change the CRA treats as ending the licence.
• The regional excise office: for a brewer, ED200-1 says a licensee must notify it in writing when they no longer need a licence, so ask what that involves on a sale. The excise licence entry explains the basics.