Howard Anglin is the Executive Director of the Canadian Constitution Foundation, which has supported Gérard Comeau’s case, along with his attorneys Ian Blue, Arnold Schwisberg, Mikael Bernard, and Daria Peregoudova.
Barriers to free trade within Canada are a real problem, but don’t look to the courts to solve them: that, in essence, was what the Supreme Court of Canada said in R. v. Comeau, the case of the New Brunswick man who was fined $292.50 for buying beer in Quebec and driving it home across his provincial border.
At the heart of the Court’s decision was the meaning of section 121 of the Constitution Act of 1867, which says that “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall … be admitted free into each of the other Provinces.” Gérard Comeau’s lawyers provided historical evidence, and the trial judge had agreed, that this language was intended to limit provincial laws at the point when they interfere with the free movement of goods across provincial borders. On the other side, New Brunswick, backed by most of the other provinces, argued that a broad application of Section 121 would undermine their ability to regulate local matters, including the distribution and sale of alcohol.
The Court came down somewhere in between, but much closer to the provinces’ side than Mr. Comeau’s. As a result, the New Brunswick Liquor Corporation bosses and their pals at the LCBO and SAQ will be breathing a little easier this morning. Their commitment to limiting customer choice and dedication to preserving a Soviet-style shopping experience has survived the grim threat of a retiree looking to save a few bucks.
The Supreme Court’s reasoning was a masterpiece of Canadian compromise. Yes, section 121 sure sounds like a substantive guarantee of free trade across Canada, they agreed, but you have to read it in light of the underlying principle of federalism, which means that “provinces within a federal state should be allowed leeway to manage the passage of goods while legislating to address particular conditions and priorities within their borders.” In other words, the constitutional guarantee that goods “shall be admitted free” between provinces is flexible enough to accommodate a law that strictly limits, or even outright prohibits, the transport of goods as long as it has a valid provincial purpose – even one as flimsy as: “To enable public supervision of the production, movement, sale, and use of alcohol within New Brunswick.”
The decision is not all bad news for free-traders. The Court did clarify that laws that have both the primary purpose of burdening inter-provincial trade will not survive judicial scrutiny. Using an example that recalls the recent and short-lived Alberta ban on B.C. wines, the Court said that “[i]f the purpose of the law aligns with purposes traditionally served by tariffs, such as … punishing another province” it is likely to be unconstitutional. It also warned against laws aimed at “protecting local industry,” which would appear to invalidate a measure like Alberta’s discriminatory tax treatment of out-of-province craft beer; the current provincial government defends its actions on explicitly protectionist grounds.
It is also important to keep in mind that the Court did not actually endorse trade barriers within Canada; it just said that, if we want to get rid of them, in most cases it will be up to governments and not the courts to act.
What are the chances of that? You’ll never get rich betting on politicians to do the right thing, but in this case there is reason for cautious optimism. Free trade within Canada is a rare cause that is both overwhelmingly popular and genuinely good policy.
Overwhelmingly popular: a recent Ipsos survey for the Canadian Constitution Foundation found that 94 per cent of Canadians support the right to transport legally-purchased goods between provinces and 95 per cent support the right of businesses to sell their products in any province. Genuinely good policy: economists Trevor Tombe and Lukas Albrecht have calculated the benefits of eliminating trade barriers among the provinces at between $50-billion and $130-billion each year.
When Prime Minister Justin Trudeau was asked on the campaign trail about Mr. Comeau’s then-pending case, he responded that “this is something that of course we support.” And when the New Brunswick trial court sided with Mr. Comeau, Minister of Industry, Navdeep Bains, called the ruling a “positive development” and a “tremendous opportunity.” He was right, and Canadians should hope he does not forget it now that that decision has been reversed. The Supreme Court’s ruling does not change the fact that free trade within Canada remains a tremendous, if unrealized, opportunity.
The Fathers of Confederation knew this when they drafted a Constitution to unite the formerly-rival colonies within a single, free-trading economy in which the goods of one province would be “admitted free” into all the others. Apparently their only mistake was not adding the postscript: “and we mean it.”