Campbellton, New Brunswick is an unlikely place to make national headlines. But this week saw a trial that could reshape the rules around beer and wine across the country, all because a man bought beer on the wrong side of the Quebec-New Brunswick border.
Gerard Comeau is charged by the New Brunswick government of violating the province’s liquor monopoly, moving 12 cases of beer (plus assorted wine and spirits) from Quebec to New Brunswick. Rather than pay the fine, Comeau is fighting the charge calling it unconstitutional. Arguments in the case concluded last week, with a decision now expected early next year.
Liquor monopolies and rules restricting the movement of alcohol across provinces are old news in Canada, so what impact could one trial have?
It could change constitutional law
The 1867 Canadian constitution would seem to make rules forbidding the movement of legal goods (like beer and wine) across provincial borders unconstitutional. Section 121 of the Constitution says “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall … be admitted free into each of the other Provinces.”
The catch is that Canadian law has interpreted Section 121 very narrowly. In the 1921 Gold Seal Ltd. case, the Supreme Court held that it simply prohibited provinces from establishing customs duties like the kind paid across international borders, but still allowed restrictions in the service of liquor controls.
Comeau’s legal defence is being aided by the Canadian Constitution Foundation (CCF), whose executive director says they hope to prove Gold Seal was wrongly decided, if the case makes it to the Supreme Court.
“This is a tiny case in some ways,” says Marni Soupcoff, executive director of the CCF. “But I think this could actually be a huge, watershed moment for free trade in Canada.”
“[The Constitution]’s talking about goods,” she says. “That’s anything. That’s cheese, eggs, chicken, milk, anything.”
In particular, Soupcoff and the CCF hope to show that the Gold Seal case was the result of backroom political deals made between two Supreme Court justices and the Minister of Justice of the day, Charles Doherty.
“It’s actually a politically tainted case. The justices were called to a meeting with representatives from the government, something we would never stand for now.”
Ontario protects its beer and wine industry too
Ontario (like most provinces) has rules regarding the “importation” of liquor from outside the province.
The limits in Ontario are also generally more permissive than those in New Brunswick. People crossing the Quebec-New Brunswick border can only carry one bottle of liquor or 12 pints of beer according to that province’s law. Ontario’s rules allow consumers to carry three bottles of liquor, nine litres of wine, and 24 litres of beer. Because Ontario’s limits are more generous, prosecution of people crossing the borders of Manitoba or Quebec is relatively rare.
The Ministry of the Attorney General tells TVO that since 2010, charges have been laid for illegally importing alcohol (technically, under S. 33.1 of the Liquor License Act) only twice, both in the 2011-12 fiscal year. In 2012, the LCBO loosened the rules around bringing beer and wine into Ontario to their current levels.
Still, Ontario’s rules do make it harder for certain alcoholic products to be sold in the province. This has been a sticky issue at meetings of provincial premiers, where leaders like Premier Christy Clark of British Columbia have pushed to have Ontario ease up on restrictions, making it easier for B.C. wineries to sell their product here.
In 2014 Premier Kathleen Wynne and Clark announced an impending deal to liberalize the wine trade between the two provinces. However, Ontario’s Ministry of Finance tells TVO.org that details are still being worked out more than a year later. Kelsey Ingram, press secretary to Finance Minister Charles Sousa, says negotiations are continuing but that Ontario will insist any future agreement with B.C. preserve the LCBO’s social responsibility and revenue-raising functions.
Some people are really passionate about this issue
It’s no accident that Comeau is being helped by the avowedly small-government CCF, or that other groups supporting the reversal of the Gold Seal precedent generally support free-market economic policies instead of more interventionist ones. Left-wing groups like the Canadian Centre for Policy Alternatives have historically been more skeptical of the alleged harms of trade barriers.
It’s also theoretically possible the federal government could use its constitutional powers to seriously knock down interprovincial trade barriers without the courts intervening. While historically federal governments haven’t picked that fight with the provinces, Conservative Leader Stephen Harper called the case against Comeau “ridiculous” on Monday, and noted his government’s passage of legislation to try and liberalize interprovincial beer and liquor.
Nevertheless, there are plenty of reasons to believe the case in New Brunswick won’t overturn the country’s liquor rules; or the much larger issue of interprovincial trade barriers generally, which have plagued provincial and federal governments since Confederation.
The Supreme Court declines to hear the large majority of cases where someone seeks an appeal, and even when they do the court predictably gives a lot of weight to longstanding precedents. Reversing the Gold Seal case would have implications not just for liquor sales, but for Canada’s system of supply management in dairy and eggs.
Image credit: jamie dobson/flickr.com
Update: When this article was first published, TVO was still waiting for the Ontario Ministry of the Attorney General to provide statistics on the number of charges laid for illegally importing alcohol in recent years. The ministry has since gotten back to TVO with those figures, and so the article has been updated to include that added information.
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