Supreme Court upholds law in cross-border beer case, averting trade shakeup

CTV National News: SCC makes alcohol ruling The Supreme Court of Canada released a unanimous decision on cross-border alcohol transportation and sales. Mercedes Stephenson reports.

OTTAWA -- The Supreme Court of Canada has affirmed the constitutionality of a New Brunswick law that ensnared a man who brought home a trunkload of beer and liquor from neighbouring Quebec.

The unanimous high court decision Thursday effectively preserves the current trade regime, saying provinces have the power to enact laws that restrict commerce if there is another overriding purpose -- in this case the desire to control the supply of alcohol within New Brunswick.

In October 2012, Gerard Comeau of Tracadie, N.B., drove across the border to Quebec to buy several cases of beer and some liquor from three stores.

Comeau was fined $240 and administrative fees under New Brunswick's Liquor Control Act for being in possession of a large amount of alcohol he had not purchased through his province's liquor corporation.

The trial judge accepted Comeau's argument the Liquor Control Act provision amounted to a trade barrier that violated Section 121 of the Constitution Act, 1867.

The Constitution Act section 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."

The New Brunswick attorney general was denied leave to challenge the trial judge's decision in the provincial Court of Appeal, but the Supreme Court agreed to hear the case, ultimately siding with the province.

The ruling underscores a need to renegotiate last year's interprovincial free-trade agreement, which contains pages of exemptions and creates secretive working groups, but fails to adequately address trade barriers, said Conservative MP John Nater.

"Canadians recognize the economic benefits of reducing interprovincial trade barriers," he said. "It should not be illegal to work or to transport legal products across provincial lines."

Prime Minister Justin Trudeau called the interprovincial agreement "a significant step" towards full free trade within Canada.

"We know there continue to be issues that will require further discussion with the provinces, but this is something that we've made significant progress on, and we will continue to."

Comeau, a 64-year-old retired power linesman, said he wasn't entirely surprised by the Supreme Court decision.

"I'm not really disappointed," he said in Campbellton, N.B. "I'm not really sad. I got an answer to what the law is."

Comeau said he's unlikely to continue buying beer in Quebec. "If it's against the law, it's against the law."

For Comeau, the case was simply about his right to stock up on cheaper suds. But for provinces and territories, business interests and economists, it was about whether the correct interpretation of the Constitution entailed full economic integration, potentially reshaping the federation.

In its reasons, the Supreme Court said New Brunswick's ability to exercise oversight over liquor supplies in the province "would be undermined if non-corporation liquor could flow freely across borders and out of the garages of bootleggers and home brewers."

The framers of the Constitution agreed that individual provinces needed to relinquish their tariff powers, the court said. In this vein, the historical context supports the view that Section 121 forbids imposition of tariffs -- and tariff-like measures -- that impose charges on goods crossing provincial boundaries.

However, the historical evidence nowhere suggests that provinces would lose their power to legislate for the benefit of their constituents, even if that might affect interprovincial trade.

"Section 121 does not impose absolute free trade across Canada," the decision says.

Rather, the historical and legislative context -- and underlying constitutional principles -- support a flexible view, "one that respects an appropriate balance between federal and provincial powers and allows legislatures room to achieve policy objectives that may have the incidental effect of burdening the passage of goods across provincial boundaries."

The decision confirms the authority of provinces to tax, price and regulate harmful products such as alcohol, tobacco and cannabis, said Rob Cunningham, a policy analyst with the Canadian Cancer Society.

"From a public health perspective, the judgment is very positive."

Dan Paszkowski, president of the Canadian Vintners Association, is now hoping for signs of progress on trade liberalization in a forthcoming study being conducted under the terms of the Canadian trade agreement.

"We are going to continue to work with that group to develop an interprovincial trade system for Canadian wine."

With files from Kevin Bissett and Teresa Wright