How to organize a food festival in Canada: permits, vendor tax and tickets

A food festival looks like a party and runs like a small town. For a weekend you are the landlord, the permit office, the first-aid post and the tax collector all at once. Most organizers get the creative side right. The ones who lose money lose it on permits, vendor paperwork and the tax on the gate. Here is the national checklist, with what changes by province.

What permits does a food festival need?

At least three, and the order matters.

• A municipal event permit for the site. It covers crowds, road closures, noise, fire and sometimes a deposit. Start with the city several months out.
• Public health approval for every vendor who prepares or sells food, usually through a temporary food permit from the local health unit or regional health authority. Deadlines and fees are set locally, and late applications are harder to get through.
• A liquor permit if anyone pours.

Ask the health unit whether it wants one application from you listing all vendors or one from each vendor. A vendor who arrives without approval can be turned away at the gate, and a vendor list sent a month early prevents a bad morning. The guides to food premises permits in Canada and selling at farmers markets in Ontario and BC show how the approvals work for market-style events.

How does liquor at an event work?

Provinces issue a special permit for events. In British Columbia it is the Special Event Permit. The province asks you to apply four to six weeks before the event, and sooner if you need an exemption. The permit holder must be 19 or older, must be at the event from the start of liquor service to the end of it each day, must not drink, and must hold a Serving It Right or Special Event Server certificate. The holder is responsible for controlling the event and the behaviour of attendees.

In Ontario, the AGCO issues Special Occasion Permits, with a permit for each separate location, and hours of 9 a.m. to 2 a.m. unless your permit says otherwise. Public events, which advertise or are open to the public, carry stricter rules than private ones, and an outdoor event may need the municipality's notice well ahead. Apply early, and read the AGCO's guide for your type of event. Server training such as Smart Serve is recommended for permit holders and their staff, and your municipality may require it for events on city property.

If your festival serves from licensed restaurants or breweries instead, ask whether their licences cover sales away from their premises. Read liquor licences by province for the general picture.

Who charges sales tax from the vendors?

Each vendor charges GST/HST or provincial tax on its own food sales, once it is registered. A vendor does not have to register while it is a small supplier: taxable sales at or below 30,000 dollars over four consecutive calendar quarters. A vendor who works a season of festivals can pass that line quickly. Read the small supplier rule for how the test is counted.

In your vendor agreement, say that each vendor holds the right approvals, charges the right tax and carries its own insurance. Ask each vendor for its registration details before the event, and keep the vendor list and the booth fees on file. If you take a share of vendor sales, ask your accountant how that share is treated for tax.

Are festival tickets taxed?

Generally yes, if you are a registrant. A registered sponsor of a domestic convention must charge GST/HST on its admissions, and the same logic reaches ticketed events whose organizers are registered for GST/HST. Organizers must register if they carry on business in Canada and are not small suppliers. Provincial rules for admissions differ, so ask the CRA and your provincial tax office what applies to the ticket, in particular whether the ticket includes food or drink and whether you are selling admission or only access to a market.

Decide before you set a price whether the posted ticket price includes tax, and say so. An organizer who finds out after the gate opens has two bad choices: absorb the tax or add a surprise at the door. The rules for what you must show customers about added fees are in drip pricing rules for menus and fees.

What else does an organizer need?

• General liability insurance, and proof of it from vendors. The city may ask to be named as an additional insured.
• A plan for waste, water, toilets, handwashing and power, which health units and fire officials check.
• A plan for card readers and connectivity if vendors rely on Wi-Fi. Interac and card payment costs explains what vendors pay.
• A written agreement with every vendor covering fees, hours, power, exclusivity and cancellation for weather.
• A clear rule that vendors' staff keep their tips.

What goes wrong most often?

• A vendor arrives with no approval and cannot sell.
• The organizer assumes the vendor handles the tax, and nobody does.
• Tickets are priced without the tax.
• The liquor application misses its lead time.
• A storm cancels the event and the agreements say nothing about refunds.

Keep your plan, vendor list and permits from this year. Next year's application starts from them.

More guides for your business:

• How to run a food truck in Canada
• How to run a coffee shop in Canada
• How to run a bar or brewpub in Canada

More in the Canadian guides for food businesses.