PEILCC Annual Report 2021

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PEI Liquor Control Commission

73 RD ANNUAL REPORT

For the Year Ended March 31 ST , 2021

FALL2020

CELEBRATEFALL 2020

Prices subject tochange |Productsnotavailableatall locations |While supplies last

WINTER 2021

HOLIDAY2020

CELEBRATEWINTER2021

Pricessubject tochange |Productsnotavailableatall locations |Whilesupplies last

P.E.I. Liquor Control Commission 3 Garfield Street Charlottetown, PE C1A 6A4

Corporate Vision The Prince Edward Island Liquor Control Commission will be recognized as a truly superior retailer in Prince Edward Island. We will achieve this through quality products, modern technology and increased services. We will be the provincial leader in relationships with our partners, customers and suppliers. We will always strive for the best possible value for our customers, staff and other stakeholders. Mission Statement The PEI Liquor Control Commission regulates the sale of beverage alcohol under the authority of the PEI Liquor Control Act. It manages the distribution of alcohol by: • operating in a socially responsible manner; • achieving the revenue goals of the Provincial Government; • providing suppliers with controlled access to the marketplace on a fair basis from modern, attractive venues; • encouraging responsibility and moderation in the consumption of beverage alcohol; and • providing its employees with equality of opportunity and increased training programs that assist in the individual’s personal development and in the commission’s overall customer service strategy.

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Corporate Values • Moderation – We promote responsible use as a way of life.

• Quality Service – We take pride in the quality of our work. We strive for excellence in caring for our customers, suppliers and one another.

• Continuous Improvement – As a retailer, we welcome change. We are committed to continuous improvement to all of our services.

• Integrity and Fairness – We take responsibility and are fully accountable for our actions, decisions and behaviour. We meet our commitments and obligations to co-workers, customers and business partners. We are open, honest and fair. • Importance of People – We are committed to fostering a positive workplace that builds teamwork, mutual respect and encourages individual development.

• Focus on Results – We are committed to getting the job done and improving our productivity levels.

PEILCC 2020-2021 Annual Report

Table of Contents

Message from the Minister

Message from the Chairman

Message from the CEO

Corporate Governance

Mandate of Commission Board

Accountability to Government and Public

Appointment of Members of the Commission

Responsibilities of Commission Members

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Audit Committee

Organizational Chart

Executive Summary

Sommaire

Operational Overview

Financial Results

Customer Service

Corporate Social Responsibility

People & Culture

Challenges and Opportunities Ahead

Retail Liquor Outlets

Statistics

Retail Gross Receipts by Store

Summary of Profit and Expense Ratios – Two-Year Comparison

Our Spending... All Profits Stay Here

Sales Volumes (litres) by Category 29 Total Licenses and Special Permits – March 31, 2020 and March 31, 2021 30

Management’s Report

Appendix

Auditor’s Report and Audited Financial Statements

PEILCC 2020-2021 Annual Report

Message from the Minister

The Honourable Antoinette Perry Lieutenant Governor of Prince Edward Island PO Box 2000 Charlottetown, PE C1A 7N8

May It Please Your Honour:

Pursuant to the PEI Liquor Control Act and as Minister designate, it is my privilege to submit the 73 RD Annual Report of the Prince Edward Island Liquor Control Commission.

Respectfully submitted,

Darlene Compton, Minister of Finance Minister Responsible for the PEI Liquor Control Commission

Message from the Chairman

The Honourable Darlene Compton Minister of Finance Minister Responsible for the PEI Liquor Control Commission PO Box 2000 Charlottetown, PE C1A 7N8

Minister:

In compliance with Section 87(3) of the PEI Liquor Control Act, it is my honour to submit this 73 RD Annual Report of the Prince Edward Island Liquor Control Commission covering the fiscal year April 1, 2020 to March 31, 2021.

Respectfully submitted,

Quentin Bevan, Chairman

PEILCC 2020-2021 Annual Report

Message from the CEO

Mr. Quentin Bevan, Chairman PEI Liquor Control Commission 3 Garfield Street Charlottetown, PE C1A 6A4

Dear Mr. Bevan:

While continuing to manage through challenges of the COVID-19 pandemic, the PEI Liquor Control Commission (PEILCC) realized strong sales for the period April 1, 2020 to March 31, 2021. This is the 25th consecutive year of record sales and returns to Government. Sales increased by more than $3.2M to over $124.3M resulting in returns to the Province of $45.2M, an increase of $1.5M over the previous fiscal year.

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Profits from the PEILCC help to fund important public services and programs in health care, education and infrastructure and our success would not be possible without the commitment of our stakeholders, and governing entities. I have every confidence in our knowledgeable team and would like to thank the Board of Directors, members of the senior management team, as well as all the PEI Liquor Control Commission staff for their contributions. Collectively, their hard work and dedication has been the key to our success. I would also like to thank the outgoing Acting CEO, Jamie MacLeod for his commitment and ability to steer this organization through these unprecedented times. Jamie demonstrated true professionalism in the way he managed this organization. Although still maneuvering through the impacts of this global pandemic, I am very optimistic in what the future holds for the PEI Liquor Control Commission and I look forward to continuing to develop new and innovative partnerships within the industry and anticipate another successful year ahead.

Respectfully,

Daniel MacDonald Chief Executive Officer

PEILCC 2020-2021 Annual Report

Corporate Governance Corporate governance describes the process and structure for overseeing the direction and management of a crown corporation so that it effectively fulfills its mandate. This involves both its public policy and commercial objectives. It defines who is responsible for what, and how to ensure accomplishment and accountability.

Liquor Control Commission Board Standing: Perry Gotell - Member, Kate Shreenan - Recording Secretary, Susan Milligan - Member, Nicole DesRoche - Member, Murray Murphy - Commission Solicitor Seated: Daniel MacDonald- CEO, Quentin Bevan - Chair, Kim Griffin - Member

Executive Management Team Standing: Linda Somers, Acting Director, Retail Operations and Development, Anita O’Connor, Director, Retail Operations and Development (Retired) Seated: Carl J. Adams - Chief Financial Officer, Daniel MacDonald - CEO, Heather Rossiter, Director, Corporate Affairs and Regulatory Services Missing from Photo: Shawn Alexander - Director, Human Resources and Employee Wellness, Gerald O’Halloran, Acting Director, Supply Chain and Property Management

PEILCC 2020-2021 Annual Report

Mandate of Commission Board

The mandate of the board is to supervise the business affairs of the commission. Its most important responsibilities are:

• ensuring that the PEILCC provides high-quality service to the public; • developing and approving the strategic plan and monitoring management’s success in meeting the strategic plan; • approving annual financial plans; • assessing and managing business risks and; • ensuring that the PEILCC performs its regulatory role in a fair and impartial manner. Accountability to Government and Public • the Annual Report, tabled in the Provincial Legislature and available for all Islanders to review, either in print or online at www.liquorpei.com; • annual audits of the PEILCC’s financial statements by a qualified auditor; • public access to records under the Freedom of Information and Protection of Privacy Act; • publicly appointed commission members. Appointment of Members of the Commission The Lieutenant Governor in Council, through an order-in-council, appoints the members of the commission, establishes the honourariums and designates the chair and vice-chair. Responsibilities of Commission Members • acting honestly and in good faith in making decisions with a view to the best interests of the PEILCC and all its stakeholders; • overseeing the management of the business affairs of the PEILCC; • avoiding conflicts of interest; • having adequate knowledge of the PEILCC’s business, how it is organized and how it functions; • attending commission meetings and seeking professional advice where necessary; • providing guidance on policy development; • reviewing appeals of listing applications, review, evaluate, and approve strategic plans. Audit Committee The Audit Committee is elected annually and consists of three commission members in addition to the chairman and the CEO as ex-officio. The committee ensures the reliability and accuracy of the PEILCC’s financial statements, helps co-ordinate and improve internal control functions, and ensures the PEILCC adheres to sound corporate governance principles. The PEILCC is held accountable by the Government and people of PEI in a number of ways, including: Each commission member has individual responsibility for corporate governance including:

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PEILCC 2020-2021 Annual Report

Organizational Chart

Hon. Darlene Compton

Minister Responsible

Quentin Bevan

Chair

Perry Gotell

Kim Griffin

Member

Member / Vice Chair

Susan Milligan

Nicole DesRoche

Member

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Daniel MacDonald

Kate Shreenan

Chief Executive Officer

Executive Assistant

Heather Rossiter

Carl Adams

Director, Corporate Affairs and Regulatory Services

Chief Financial Officer

Shawn Alexander

Gerald O’Halloran

Director, Human Resources and Employee Wellness

Acting Director, Supply Chain and Property Management

Linda Somers

Daniel MacDonald

Acting Director, Retail Operations and Development

Director, Marketing and Sales

* Shared-services agreement with PEI Cannabis Management Corporation (PEICMC)

PEILCC 2020-2021 Annual Report

Executive Summary The Prince Edward Island Liquor Control Commission (PEILCC) is a crown corporation responsible for the administration of the Liquor Control Act and Regulations, along with the purchase, control and sale of all beverage alcohol in the province. A five-member Board of Commissioners is responsible for the commission’s activities. The chairperson reports to the minister responsible for the PEI Liquor Control Commission. The mandate under the Liquor Control Act has two primary components: regulatory and commercial. The regulatory function responsibilities include: • licensing and inspecting licensed premises and special permit events; • investigating and reporting on all licensee or special permit complaints and determining whether there were infractions of the Liquor Control Act; and • making recommendations to government on amendments to legislation. On the commercial side, the commission continues to be a major force in the provincial economy with gross receipts in excess of $124.3 million, making it one of the largest retail organizations in Prince Edward Island. In terms of monetary transfers to the Provincial Treasury, this past fiscal year saw $45.2 million returned to the Province, a year over year increase of $1.5 million. The commission currently operates 18 corporate retail outlets, as well as a central warehouse and Licensee Distribution Centre located in Charlottetown. The Commission has contracted with private interests for the operation of a Liquor Agency store in eight locations: Cavendish, East Royalty, Eldon, Kinkora, Morell, Murray Harbour, Wellington, and Wood Islands.

A strategic plan is in place that guides the commission to success in meeting its performance and accountability goals.

The commission focuses on the following four key areas to measure performance:

1. Financial Results; 2. Customer Service; 3. Corporate Social Responsibility; and 4. People and Culture.

These areas serve as a blueprint for incorporating the Mission Statement into day- to-day activities and establishing strategic goals, the details of which are explained in further detail in this report.

PEILCC 2020-2021 Annual Report

Sommaire La Régie des alcools de l’Île-du-Prince-Édouard (R.A.Î.-P.-É.) est une société de la Couronne responsable de l’administration de la Liquor Control Act (loi sur les alcools) et de ses règlements, ainsi que de l’achat, du contrôle et de la vente de toutes les boissons alcooliques dans la province. Un conseil composé de cinq commissaires est responsable des activités de la Régie. La présidence fait rapport au ministre responsable de la Régie des alcools de l’Île-du-Prince-Édouard. Les responsabilités du volet de réglementation comprennent entre autres : • octroyer des licences et inspecter les débits de boisson et les événements rattachés aux permis spéciaux; • enquêter et faire rapport sur les plaintes concernant l’octroi de permis et les permis spéciaux ainsi que déterminer s’il y a eu infraction à la Liquor Control Act; • faire des recommandations au gouvernement sur la modification des lois. Du côté commercial, la Régie est un levier important de l’économie de la province, ses recettes brutes dépassant les 124,3 millions de dollars, ce qui en fait le plus important organisme de vente au détail de l’Île-du-Prince-Édouard. Sur le plan des transferts monétaires au Trésor provincial au cours de la dernière année financière, un total de 45,2 millions de dollars a été versé à la province, soit une augmentation de 1,5 million de dollars par rapport à la même période l’an dernier. À l’heure actuelle, la Régie exploite dix-huit (18) points de vente au détail ainsi qu’un entrepôt central et un centre de distribution pour les détenteurs de permis situés à Charlottetown. La Régie a passé un contrat avec le secteur privé pour les activités d’un magasin de franchise à huit endroits : Cavendish, East Royalty, Eldon, Kinkora, Morell, Murray Harbour, Wellington et Wood Islands. Le mandat en vertu de la Liquor Control Act compte deux principaux volets – l’un, réglementaire et l’autre, commercial.

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La Régie utilise un plan stratégique pour atteindre ses objectifs de performance et d’imputabilité.

Elle concentre ses efforts sur quatre domaines principaux afin de mesurer sa performance :

1. le bilan financier; 2. le service à la clientèle; 3. la responsabilité sociale; 4. les gens et la culture.

Ces domaines servent de plan directeur à l’intégration de notre mission dans nos activités quotidiennes et à l’établissement d’objectifs stratégiques qui seront expliqués plus en détail plus loin dans ce rapport.

PEILCC 2020-2021 Annual Report

Operational Overview The Prince Edward Island Liquor Control Commission’s Strategic Plan continued to guide activities through fiscal 2020-2021. Progress on strategic objectives is supported by annual business plans that set priorities for actions to meet objectives and timelines for their completion. The following is an overview of the performance in each of the five strategic objectives: Goal 1 Financial Results

Goal To maximize net income within the policy guidelines established by the provincial government.

Objectives

1. Optimize return to government. 2. Grow revenue through effective planning and execution. 3. Continuously improve operational effectiveness and efficiency.

Actual 2019-2020

Target 2020-2021

Actual 2020-2021

% of Target 2020-2021

Target 2021-2022

Gross Receipts

$121,112,506

$95,573,000

$124,316,872

130.08%

$121,000,000

Gross Profit

$35,943,041

$28,381,000

$37,555,456

132.33%

$35,852,100

Operating Expenses

$16,476,245

$18,118,300

$16,917,794

93.37%

$18,814,200

Net Income

$22,468,919

$12,328,300

$23,414,429

189.92%

$19,590,400

Return To Government*

$43,715,692

$29,000,300

$45,242,793

156.01%

$40,695,100

Revenue Per Litre

9.09

9.12

$9.03

99.01%

$9.10

Spirits

38.82

39.20

$39.25

100.13%

$39.50

Beer

5.71

5.78

$5.68

98.27%

$5.72

Wine

17.09

17.16

$17.06

99.42%

$17.15

Wine Coolers

8.81

7.98

$8.77

109.90%

$8.80

Spirit Coolers

7.67

7.53

$7.18

95.35%

$7.28

Draught

2.04

2.27

$1.47

64.76%

$1.55

Operating Expenses as a % of Gross Receipts

13.60%

18.96%

13.61%

71.78%

15.55%

Shrinkage as a % of Gross Receipts

0.01%

0.00%

0.01%

100.00%

0.01%

Inventory Turnover**

Warehouse

62.0

70.0

50.1

71.57%

75.0

Stores

31.5

30.0

30.3

101.00%

30.0

* Inclusive of Net Income and health tax transfers to government ** Measured in days

PEILCC 2020-2021 Annual Report

The PEI Liquor Control Commission delivered both an increased net profit and an increased transfer to the provincial government in fiscal 2020-2021.

Gross receipts were $124,316,872 for the fiscal year ended March 31, 2021, an increase of $3,204,366 over the previous year. This increase came as a result of new sales and marketing initiatives.

Net transfers for the year totaled $45,242,793. This year’s performance resulted in a $1,527,101 increase in the PEILCC’s contribution to the province over the previous year.

Performance Highlights

The commission set inventory turnover goals at the beginning of the fiscal year as part of its strategic plan. These turnover ratios were based on the year ended March 31, 2020 to measure inventory efficiencies. The commission has been better able to manage the days in inventory and the warehouse level in order to meet the needs of our customers. Store inventory turns are up slightly from last year which can be attributed to the increase in the number of products held in store inventory and necessary to fulfill customer demands. An improved store ordering process continues to keep store inventories in check and ensured better distribution and availability of inventory across the retail network. In addition, the central warehouse has been reconfigured to optimize space and manage warehouse efficiency.

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PEILCC 2020-2021 Annual Report

Performance Highlights

Figure A Sources of Gross Receipts

Spirits

22%

Wine

Coolers

Merchandising

Other

Fiscal Year 2021

Beer

40%

26%

Figure B Application of Gross Receipts

13%

Payments to Province

Administrative Expenses

Federal Taxes

38%

13%

Suppliers

Fiscal Year 2021

36%

The commission spent approximately $48.09 million on alcohol from both national and international sources. Gross margins increased slightly due to one-time only marketing promotions.

PEILCC 2020-2021 Annual Report

Goal 2 Customer Service

Goal To understand the needs of our customers so that we can provide quality products and services that are delivered by knowledgeable, courteous employees in attractive and accessible facilities. Objectives 1. Enhance the shopping experience for PEILCC wholesale and retail customers. 2. Provide enhanced customer services. 3. Improve product portfolio.

Actual 2019-2020

Target 2020-2021

Actual 2020-2021

% of 2020-2021 Target

Target 2021-2022

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Customers served Average customer transaction value

2,655,839

2,141,200

2,325,095

108.59% 2,500,000

$45.60

$44.63

$53.47

119.79%

$48.40

Actual 2019-2020

Target 2020-2021

Actual 2020-2021

% of 2020-2021 Target

Target 2021-2022

Litres

Beer

8,635,304

6,798,700

8,708,942

128.10% 8,700,000

Draught

1,091,719

877,900

856,768

97.59%

845,000

Spirits

800,522

670,800

832,886

124.16%

820,000

Wine (including BYO)

1,799,001

1,485,000

1,680,117

113.14% 1,670,000

Refreshments

999,302

650,000

1,692,451

260.38% 1,700,000

Total

13,325,848

10,482,400

13,771,164

131.37% 13,735,000

Performance Highlights

Packaged beer has increased by 73,638 litres over the previous year while draught beer has shown a decrease of 234,951 litres over last year driven primarily by the effects of COVID-19. This is consistent with national trends. The Refreshment category continues to be popular with volumes increasing by 693,149 litres over last year. The Spirit category had an increase of 32,364 litres from the previous year.

PEILCC 2020-2021 Annual Report

The Wine category continued to display strong performance again in 2020-2021 selling a total of 1,680,117 litres, a decrease of 118,884 litres from the previous year. An increase of 693,149 in Refreshments - Ready To Drink (RTD) shows it’s continued rise in popularity. New offerings continued to drive growth in both sales and volume in this category. The availability of one time offerings throughout the year has also been popular with customers. The PEILCC continues to expand the Vines concept to include many PEILCC retail outlets displaying these products as a portion of each location’s shelf set including themes such as Island Style which helped to promote local food and drink pairings with recipes. Merchandising across the corporate retail network permitted products to be featured in a like fashion and provides consistency across all locations. Local producers continue to benefit from exposure of having their products featured on Buy Local displays as well as on the shelves with products of their respective category. The Festival of Wines was not able to take place as the result of restrictions imposed by the COVID-19 pandemic. The PEILCC looks forward to this annual event taking place again in 2022, including the pop-up retail boutique featuring the wines of the festival. Unfortunately, other similar events were also cancelled due to pandemic restrictions including the PEI Spirit Festival and the PEI Beer Festival. A number of vendor supported themed campaigns ran throughout the course of the year A number of PEILCC retail employees have taken advanced training in the WSET program, providing them with an additional level of expertise which is beneficial when helping customers with product options. This training combined with other initiatives led by the Commission’s Category Managers, have contributed to the development of all categories and the growth of overall sales.

PEILCC 2020-2021 Annual Report

Goal 3 Corporate Social Responsibility

Goal In partnership with community groups and suppliers, the PEILCC will strive to raise public and staff awareness of the responsible use of beverage alcohol. Objectives 1. Enhance our reputation as a socially responsible corporate citizen. 2. Build corporate social responsibility into all areas of our business. 3. Regulate the consumption of beverage alcohol throughout the province in a fair and responsible fashion.

Actual 2019-2020

Actual 2020-2021

Target 2020-2021

% of Target

Target 2021-2022

Number of ID Checks as a % of transactions

10.04% 10.60% 10% 101.3% 10.0%

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Funds raised for charities and foundations

$137,132

$16,334

$95,000

17.2% $100,000

Licensee Compliance Rate

97.9% 98.7%

95% 103.9% 95%

Number of Inspections Conducted

3152

1754

3300

53.2% 3300

% of Sanctions without Adjudication

100%

Performance Highlights

the in-store retail ice program in a number of corporate retail outlets which also benefits the work of MADD Canada. The commission continued to participate on a number of committees promoting responsible use including, Canadian Liquor Jurisdictions Social Responsibility Committee. The PEILCC also completed the 5th and final year of a five-year agreement with the Island Nature Trust (INT) with $100,000. In total collected through this 5 year supplier supported campaign. A portion of sales from a variety of products, were donated to the INT. Closures and reduced operating hours, as the result of COVID-19 restrictions, negatively impacted the amount of funds raised for charities as well as the number of inspections that PEILCC inspectors were able to carry out.

The PEI Liquor Control Commission continues to promote the responsible use of alcohol. The commission strives to provide products that are socially responsible and incorporate responsible messaging into product promotions. Ongoing responsible use initiatives include: Challenge and Refusal Initiative, and ID Training for PEILCC corporate retail and liquor agency staff, Check 30 ID Program, HOST booklet and various responsible use messages during graduations, long weekends, Christmas and New Year’s celebrations. Responsible use messages were promoted throughout the year using local media as well as social media platforms. The Prince Edward Island Liquor Control Commission continued its support of MADD Canada’s Multi-media School Assembly Program during the 2020-2021 school year, with 31 online interactive classroom presentations of the English language version The Wish and two of the French language version Précipice , which took place in schools across the Island. The commission provided ongoing support for MADD Canada’s campaign 911, and expanded

PEILCC 2020-2021 Annual Report

Keeping it social since 2013.

Keep It Social is a student-led partnership promoting responsible consumption, personal choice and a culture of moderation. For six years, Keep It Social ambassadors have been empowering their fellow students to reduce their risks and respect their limits.

UNIVERSITIES 11

PARTICIPATING COLLEGES &

4 EVENTS AUS

ATLANTIC PROVINC ES

“IF YOU CHOOSE TO CONSUME, KEEP IT SOCIAL.” CONSISTENT MESSAGE

To learn more, visit

PEILCC 2020-2021 Annual Report

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The PEI Liquor Control Commission has a partnership with UPEI as well as with Holland College for each institution’s KEEP IT SOCIAL (KIS) programing. KIS is helping students make responsible decisions when it comes to alcohol. Led by students and guided by the PEILCC, Keep It Social is a long-term initiative designed to address and reduce high-risk consumption. Now in its fifth year, KIS is tackling the false perceptions that many students have about how much alcohol their peers consume.

As well as getting the message out on campuses, keepitsocial.ca offers students tips and advice on how to make the right decisions when they’re planning a night out.

UPEI and Holland College appointed several student athletes as KEEP IT SOCIAL Ambassadors who lead spreading of the message about high-risk alcohol consumption among students. The KIS message is promoted through social media and KIS videos that are shown and promoted throughout the academic year at various athletic and social events.

Also in partnership with UPEI, Coach Atlantic and KKP, a PEILCC funded bus wrap puts a focus on the campaign when student athletes travel throughout the Maritime Provinces to their “away” games.

PEILCC 2020-2021 Annual Report

Gift of Giving Campaign Results

The Gift of Giving Campaign is an annual event by the PEILCC, which donates a portion of all gift card sales during the month of December to community organizations. This year, the campaign raised more than $16,000, and recipients include Blooming House, Bedford MacDonald House, MADD Canada, Make-A-Wish Foundation, Canadian Mental Health Association, and six food banks across the Island. “I am very pleased that we can give back and support our communities through initiatives such as this one,” said Finance Minister and Minister Responsible for the Liquor Control Commission Darlene Compton. “These organizations do amazing work, and we will continue to support them and their important efforts to help people across our province.” PEILCC is committed to the communities it serves, and this campaign gives back to organizations that provide important support and assistance to Islanders. MADD Canada, The Salvation Army Bedford MacDonald House, Blooming House, West Prince Caring Cupboard, Summerside Salvation Army, Charlottetown Salvation Army, Upper Room Soup Kitchen & Food Bank, Southern Kings & Queens Food Bank, Souris Food Bank, Make-A-Wish, PEI Chapter (Unified with Children’s Wish), and Canadian Mental Health Association – PEI Division. Full list of Charities:

PEILCC 2020-2021 Annual Report

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Let’s Protect Our Island Campaign

After a one-year hiatus due to the Covid-19 pandemic, the ‘Lets Protect Our Island’ collaboration between Island Nature Trust and the PEI Liquor Control Commission is now entering its fifth year. The campaign running from April 1st to May 18th with participating suppliers of beer, wine and spirits donating up to $1 from their sales of participating products at PEILCC retail outlets to Island Nature Trust. Signage promoting this initiative – including the featured products – can be found in all 18 PEI Liquor retail outlets across the province. Island Nature Trust is committed to investing in the future of Islanders by working to protect natural landscapes in PEI. Since 2016, funds from the initiative have helped Island Nature Trust protect over 1,600 acres of forest, wetlands and coast in PEI. The commitment doesn’t end when Island Nature Trust acquires the land but continues in the form of wise and active stewardship of those protected natural spaces.

We and our children directly benefit from the ecological services these natural areas provide with clean water, clean air and an environment resilient to climate change

PEILCC 2020-2021 Annual Report

Goal 4 People & Culture

Goal Build a customer-focused, high-performance work environment that results in greater employee involvement, development, innovation and creativity. Objectives 1. Always recruit, retain, and develop the best people. 2. Foster a culture of performance, communication, and engagement. 3. Rigorously establish and promote a healthy, safe, and respectful workplace.

Actual 2019-2020

Target 2020-2021

Actual 2020-2021

Target % 2020-2021

Target 2021-2022

Training Hours per Employee - FTE

11.21

6.27

62.7%

EMPLOYEE EXCELLENCE Plan

97.3%

80%

72.73%

80.82%

90%

Employee Wellness Rate

98.72%

98%

98.17%

100.2%

98%

Lost-Time Frequency

5.16

8.00

8.82

110.3%

8.0

Performance Highlights

The PEILCC continued to re-invest in its employees training and development by providing them with a range of developmental opportunities over fiscal 2021.

The PEILCC training hours per employee were down slightly over last year from 12.8 hours to 11.21 hours for fiscal 2021. We have adjusted our training hours target as a result of COVID-19 and refocused training efforts.

We continue to offer Wine and Spirit Education Trust (WSET) training and PEILCC Development Training Fund continues to be utilized by staff. These funds are allocated to developmental opportunities that assist employees in achieving their personal career objectives, while simultaneously bridging individual performance gaps that collectively lead to increased levels of organizational success. From an employee engagement perspective, the PEILCC hit over 98% of the target goal in its overall employee wellness rate score. Success in this regard continues to be attributed to the diligence of PEILCC leadership in the administration of the EMPLOYEE EXCELLENCE program which was piloted in fiscal 2017, and rolled out across the entire organization in fiscal 2018. Employee engagement continues to be a top priority for the PEILCC, as the benefits of engaged employees have tremendous impacts on business outcomes, not least of which is a workforce that is satisfied and excited to be part of the PEILCC family. The PEILCC had continued success in fostering high levels of workplace wellness and safety over fiscal 2021. In addition to efforts in employee engagement and the provision of OH&S training, new disability management initiatives and decreases in workplace accidents leading to lost time. A healthy workforce is extremely important to the PEILCC, particularly given the physically demanding work involved in many operational processes. Continued effort in this regard will be an ongoing priority moving forward.

Opportunities and Challenges Ahead:

The PEILCC HR and Employee Wellness division continued to implement the Strategic People & Culture Plan. The objective of this plan is to foster an engaged workforce that is aligned with the strategic objectives of the organization. Through effective implementation the PEILCC has the opportunity to enhance its ability to accomplish these goals.

PEILCC 2020-2021 Annual Report

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New Specialty Store NOTABLES

The PEI Liquor Control Commission opened its new specialty store at Founders Food Hall and Market in Charlottetown on July 24, 2020, offering diverse and high-quality products to Islanders and visitors. The new location, called Notables, carries Island products, as well as an extensive selection of over 400 wines, spirits, beers, and ready-to-drink beverages, including ciders not available at any other liquor store in the province. “This new store is a great complement to existing local vendors operating at Founders Food Hall and Market and will help support their business. We’re pleased to provide Islanders and visitors with diverse products and some premium choices not offered at other liquor store locations.”

– Finance Minister and Minister Responsible for the Liquor Control Commission Darlene Compton

The Notables store also has a room available for tasting, information on food pairings and special events.

This new location is open 7 days a week, Monday to Saturday, 10 a.m. to 8 p.m. and Sunday 12 p.m. to 5 p.m.

PEILCC 2020-2021 Annual Report

PEI Brewing

FEATURED PRODUCER

How did PEI Brewing Company get started?

Kevin Murphy and Jeff Squires formed a business partnership in 2010 to expand upon the Gahan Brands that were being Brewed at the Gahan House on Sydney Street in Charlottetown, Prince Edward Island.

The PEIBC is located on 96 Kensington Road in Charlottetown. Why was this location selected?

The PEIBC building had history in the beverage business as a former Coca-Cola bottling plant. When the PEIBC plan was put into motion Kevin and Jeff felt it was a strategic location and was a re-development project for the city.

What is the PEIBC signature product?

PEIBC signature brands are: Beach Chair Lager, the Gahan line of beers, Colliding Tides, and the After Hours Series.

How is your beer connected to the local area? Are there local products used?

We use PEI blueberries in our Gahan Blueberry Ale and we use local honey in our Gahan Honey Wheat Ale.

What is your process when deciding on new beers? Is the whole team involved?

We listen to the consumer on what they want and follow emerging beer trends in other parts of the world very closely – Beer drinkers are great to share “their favourite” beer style with you.

With your menu, do you pair the food with the beer on tap?

We do food and beer pairings regularly at PEIBC. As well a number of chefs continually add our beer to the recipes to enhance the dish they are preparing.

Learn more about the PEI Brewing Company at: peibrewingcompany.com

PEILCC 2020-2021 Annual Report

CHALLENGES AND OPPORTUNITIES AHEAD

The Prince Edward Island Liquor Control Commission continues to identify opportunities and challenges, as well as to meet the expectations of an increasingly diverse and discerning customer base. Store renovations and a new merchandising strategy have improved the way in which products are displayed as well as the customer experience. On-going investment and planning are required to meet customers’ needs and keep standards moving forward. In addition, continued investment in human resources as well as technical resources are also necessary to fulfill its strategic plan. Capital planning is required to provide for future needs. The commission has set its monetary transfer goal to $29.0 million for the 2021-2022 fiscal year to help continue investments in our province. While COVID 19 has presented supply chain challenges, the PEILCC continues to benefit from an approach to category management that provides customers with a wide variety of domestic and international products. The PEILCC continues to investigate new opportunities for products and their distribution to meet the ever- evolving customer demands. The Commission’s commitment to social responsibility presents ongoing opportunities to communicate and reinforce the message of responsible use and public safety to a wide range of audiences. Underlying all of these challenges and opportunities is the vision of excellence in management. Being prepared to capitalize on new opportunities in the marketplace and continuing to integrate and streamline operations is key. The PEILCC is confident that it is building an organization which is internally more efficient and will continue to be publicly accountable.

Please Don’t Drink & Drive

PEILCC 2020-2021 Annual Report

Prince Edward Island Liquor Control Commission

Retail Liquor Outlets

Corporate Retail Outlets

Liquor Agency Stores

Alberton

Cavendish

Borden-Carleton

East Royalty

Cardigan

Eldon

Charlottetown - Minna Jane Drive

Kinkora

Charlottetown - Queen Street

Morell

Charlottetown - University Avenue

Murray Harbour

Charlottetown - Notables

Wood Islands

Cornwall

Wellington

Kensington Montague North Rustico O’Leary Souris Stratford Summerside - Granville Street Summerside - Water Street Tignish Tyne Valley

PEILCC 2020-2021 Annual Report

Statistics Retail Gross Receipts by Store

Year Ended March 31, 2021

Year Ended March 31, 2020

Year Ended March 31, 2019

Retail Store

Gross Sales

$2,072,944

Alberton

$2,095,105

$2,010,170

$1,593,148

Gateway

$2,405,124

$2,319,723

$3,177,169

O'Leary

$2,309,963

$2,193,053

$10,181,107

Summerside - Granville

$9,639,001

$8,179,486

$4,301,421

Summerside - Waterfront

$4,673,517

$5,521,993

$3,173,549

Tignish

$3,106,881

$3,097,433

Please Don’t Drink & Drive

$4,245,930

Kensington

$4,005,786

$3,932,996

$1,350,925

Tyne Valley

$1,374,931

$1,343,989

$3,620,161

Charlottetown - Queen Street

$4,414,008

$4,176,445

$17,238,797

Charlottetown - University Avenue

$16,772,822

$16,177,238

$997,606

Charlottetown - Notables

$3,173,181

$3,841,645

$3,793,707

N. Rustico

$15,163,337

Charlottetown - Minna Jane Drive

$14,471,703

$13,603,873

$22,989,434

Licensee

$21,136,454

$20,382,722

$6,138,686

Cornwall

$6,466,947

$6,181,129

$10,155,052

Stratford

$9,929,804

$9,568,277

$1,841,020

Cardigan

$1,871,143

$1,804,085

$3,367,075

Souris

$3,411,600

$3,325,721

$8,044,612

$7,513,424

$7,137,448

Montague

$1,491,718

$1,672,648

$2,216,107

Other

Total

$124,316,872

$121,112,506

$116,695,595

PEI product is on display and promoted in all LCC retail stores, on the new LCC website and through our social media channels.

PEILCC 2020-2021 Annual Report

Statistics Summary of Profit and Expense Ratios Two-year Comparison

(in 000s)

2021

2020

Gross Receipts

$124,317

$121,113

Gross Profit

$37,555

$35,943

Net Income

$23,414

$22,469

General and Administrative Expenses

$16,918

$16,476

Gross Profit as a Percentage of Gross Receipts

30.21%

29.68%

Net Profit as a Percentage of Gross Receipts

18.83%

18.55%

General and Administrative Expenses as a Percentage of Gross Receipts

13.61%

13.60%

Our Spending All Profits Stay Here

Operating Costs:

Salaries and Benefits:

5,877

11,041

127,094

Total Sales:

45,243

48,096

35%

38%

Returned to PEI:

Cost of Product:

16,837

13%

HST & Other:

PEILCC 2020-2021 Annual Report

Sales Volumes (litres) by Category

Beer 9,565,710

T O T A

Spirits 832,886

Fiscal Year 2021

Please Don’t Drink & Drive

Wine 1,680,117

Coolers 1,692,451