Free Trade and Beer: Gerard Comeau and the Question of Interprovincial Commerce

Free trade is a pet topic of protesters across North America, and with good cause. Those in favor of it point to the reduction of trade barriers as improving economies that allow for greater access to inexpensive goods. Those against it point out that it destroys local businesses and industries as well as mom and pop shops loved by communities who abandon them in favor of cheaper goods and services. Though Canada seems very much in favor of free trade, many of our industries such as dairy rely on protectionist policies imposed by the government to keep them alive.

The notion of free trade has been in the news lately not just because of the Orange Misogynist’s blathering about the North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico, but also with regards to a recent Supreme Court decision on interprovincial trade. Before I go into the decision itself, we must discuss how the case got to the Supreme Court.

Gerard Comeau is a resident of New Brunswick who lives not far from the border to Quebec. In October 2012, he drove across the border into our fair province and stocked up on liquor from three different stores. Booze, as it turns out, is pricier in New Brunswick and Comeau decided he would save some money by buying elsewhere.

There was, however, a problem.

New Brunswick’s Liquor Control Act has a limit on how much alcohol you can buy out of province. Their law makes it an offense to “have or keep liquor” above a certain amount that was purchased from a Canadian source other than the New Brunswick Liquor Corporation, the New Brunswick equivalent of the Société des Alcools du Québec (SAQ).

The RCMP in the New Brunswick town on the border were concerned about the number of residents often going to liquor stores in Quebec in breach of the law. With the help of their counterparts in Quebec, they started keeping track of New Brunswickans doing so.

One of these people was Gerard Comeau.

On his way back from an October 2012 trip to buy booze in Quebec, he was stopped by the RCMP. The cops found large quantities of beer and spirits in excess of what the law allowed. Comeau was charged under the New Brunswick Liquor Control Act and was issued a fine of two hundred and forty dollars plus administrative fees. Comeau in turn decided to fight it, arguing that the provision of the Liquor Code was unconstitutional.

The Constitution Act of 1867 was written with a lot of considerations in mind. Before confederation, Canada was just a bunch of separate British colonies. As separate colonies they all had powers to impose tariffs on goods brought into one colony from another.

The country was being formed as the United States was going through the Civil War and there were concerns about the economic effects of the war on the new Dominion of Canada. One of the ways the fathers of confederation sought to solve this is by adding section 121 to the constitution. It is on the basis of this provision that Gerard Comeau decided to fight his fine.

Section 121 of the Constitution Act of 1867 says:

“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.”

Comeau and his legal team argued that the penal provision of the Liquor Control Act under which he was charged violates this provision of the constitution. To back up this argument, a historian was brought in to discuss why section 121 was included in the Constitution Act of 1867, formerly known as the British North America Act.

With the help of this historian who acted as expert for the defense, Comeau argued that section 121 was basically a free trade provision and therefore “no barriers can be erected to impede the passage of goods across provincial boundaries”. The trial judge agreed and acquitted him. The Crown appealed but the appeal was dismissed, so the Attorney General of New Brunswick as well as the Attorney Generals across Canada appealed to the Supreme Court.

The question the Supreme Court was charged with was whether section 121 of Constitution Act of 1867 bars any impediment to interprovincial commerce.

The Supreme Court said no.

In their decision they point out that to take the aforementioned interpretation of section 121 of the Constitution Act of 1867 is to ignore the years of legal precedents created by the courts as they were charged with interpreting the law. Doing so would not only undermine the Canadian legal system but effectively strip federal and provincial powers of their ability to legislate trade in Canada.

Aside from Quebec which relies in part on the Civil Code, most provinces in Canada rely on past legal decisions in order to interpret current ones. The higher the court, the more binding the decision on lower courts, a concept called stare decisis or “stand by things decided”.

The court went on to point out that past legal decisions on the subject point to section 121 only forbidding laws that explicitly impose tariffs on goods moving between provinces but that it should not be interpreted as to ban legislative powers from imposing laws that have the incidental effect of limiting interprovincial commerce.

Critics of the decision were hoping the Supreme Court would take a tougher stance in favor of protecting Canadian beer from the effects of free trade. Others think that this provision will make section 121 of the Constitution increasingly obsolete.

That said, Comeau is obviously going to have to pay his fine, but I imagine it pales in comparison to his legal fees.

* Featured image by Allison Caterall via Flickr Creative Commons

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