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A sigh of regret, and of relief, for the Supreme Court’s cross-border alcohol ruling

To the anguish of free traders, the Supreme Court has decided that Canada is a federation, whether we like it or not.

The provincial governments wield great power within their borders, the court ruled unanimously Thursday in a landmark ruling. If, as a consequence of provincial sovereignty, people and goods do not flow freely across borders, well, that’s for politicians, not judges, to remedy.

On the question of interprovincial trade, the court chose to exercise restraint. Sigh.

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The judgment in The Queen versus Gérard Comeau centred on a man who brought liquor from Quebec into New Brunswick, violating the province’s liquor laws. Mr. Comeau contended those laws violated Section 121 of the Constitution, which states: “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

On its face, that seems pretty absolute. But the court ruled that past precedents must govern how the Constitution is interpreted, and such precedents have upheld the rights of provinces to legislate in the interest of their citizens. Pretty much anything short of an out-and-out tariff is acceptable.

At the root of the ruling lies the reality that provinces are powerful actors in Canada’s federation. “The federalism principle is vital,” the judges declared, with one voice. “It recognizes the autonomy of provincial governments to develop their societies within their respective spheres of jurisdiction.

“… Reading s. 121 to require full economic integration would significantly undermine the shape of Canadian federalism, which is built upon regional diversity within a single nation.”

The ruling was a “restrained, careful” decision, in the opinion of Kyle Kirkup, a professor of law at the University of Ottawa.

“The court is very worried about disrupting other kinds of regulatory regimes – things like supply management, environmental protection,” he explained. More is at stake than the right to bring booze across the border. “The elephant in the room seems to be all the other regulations that are going on in the background.”

For those of us dedicated to the ever-freer passage of goods, services and people both within Canada and between Canada and the world, the ruling is a disappointment. It reinforces the frustration over the Trans Mountain pipeline dispute between Alberta and B.C. It reveals Canada to be a balkanized country, a collection of 10 provincial fiefdoms, with a feeble federal government that is unable to override the parochial provinces in the national interest.

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But perhaps we free traders should think again. The Canadian experiment is founded on accommodation. Confederation sought to accommodate the French language and culture of Quebec within a larger, English-speaking whole. It sought to accommodate the needs and interests of the smaller, Maritime provinces within a union dominated by the large, populous provinces of Quebec and Ontario.

Over the decades, as the nation grew, we accommodated the Pacific-oriented world view of British Columbians and Prairie populism of both the left and right varieties. In recent decades, we have accommodated millions of new arrivals from India and China and the Philippines and the Middle East and the Caribbean and other countries and regions around the world.

Yes, Canadian parochialism can drive you to distraction. Why on earth should we not be able to sell alcohol over the border? Why do we continue to defend supply management, which protects the dairy and poultry industries, while the rest of the agrifood sector competes and trades freely? Why must there be 13 separate securities regulators? Why can’t we find a way to get Alberta’s oil to tidewater?

All these disputes reveal flaws within the Canadian system. But every system, whether federal or unitary, is flawed. Canada, with all its contradictions, remains peaceable and prosperous and decently governed, compared to some of our neighbours and friends.

A cautious Supreme Court has ruled: Let’s keep things the way they are. Let’s not blow everything up for the sake of freer internal trade. Once we start down the path of diminishing provincial autonomy, who knows where we might end up?

So, a sigh of regret for the internal economic union that might have been. But perhaps also a sigh of relief, for the unintended consequences that did not follow. Which, when you think about it, is very Canadian.

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The Supreme Court of Canada has ruled to maintain the status quo on interprovincial trade, including the sale of alcohol. The Canadian Vintners Association says it will continue to work to remove trade barriers for Canadian wine. The Canadian Press
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