Senate points to rules blocking trade in beer, cheese between provinces

The provinces need to make it easier to do business within Canada or the federal government should go to the Supreme Court to see if it can take control, a new Senate report recommends.

The Senate banking, trade and commerce committee is urging the federal government to do what it can to sync up legislation and regulations that slow trade between the provinces. It points, for example, to different limits on fuel-efficient tires that mean truckers have to change them before entering the next province, and different size requirements for dairy creamers and milk containers or beer bottles that would require separate production to sell into other provinces.

Sen. Joseph Day, the committee's deputy chair, says they believe the federal government has the power under the Constitution to make the changes needed to simplify interprovincial trade rules.

"The Fathers of Confederation envisioned a united Canada, one which realizes the promise contained in section 121 of the Constitution Act," the committee wrote in its report.

The report quotes the Constitution on the provinces of Canada having let in "all articles of the growth, produce or manufacture" of any of the other provinces.

"Almost 150 years after our country was formed, far too many unnecessary regulatory and legislative differences exist among Canada’s jurisdictions," the report says.

A New Brunswick court flung the question into the mainstream last April when it found Gerard Comeau did nothing wrong when he stocked up on 14 cases of beer in Quebec. The province of New Brunswick is appealing that ruling.

Conservative MP Dan Albas is calling on the federal government to refer the case to the Supreme Court for clarification on section 121. Albas initially made the call last month but has now tabled a motion in the House on the matter. MPs are debating Albas’ motion today.

"Right now it’s easier to send wine from British Columbia to Tokyo than to Toronto. There’s something wrong with that equation," Albas said in an interview with CTV News. "We all realize that. It’s a question of fairness. It’s also a question of legality. That's why we have a Supreme Court. That's why Conservatives are trying to raise it there."

Day and Sen. David Tkachuk, the committee's chair, said they want to see a new Agreement on Internal Trade, which was supposed to be completed last March. They've set July 1, 2017 - the 150th anniversary of Confederation - as the deadline for the provinces to sign a new deal. If they don't hit that deadline, the Senate report recommends the federal government turn to the Supreme Court.

Day said the provinces are protecting their revenue, pointing to New Brunswick as an example.

"They’re appealing this [Comeau] case because they don’t want to lose the revenue that they make on beer that is sold in the province because Quebec is prepared to take a lower margin and sell more," he said.

Eliminating trade barriers could increase Canada's GDP by $50 billion to $130 billion, according to University of Calgary economics professor Trevor Tombe, with whom the committee met last month.

"Once people start to realize what the problem is and really how silly it is that we haven’t solved this, then I think the momentum will be there to get a solution," Day said.

The report also recommends the federal government:

• work with provincial and territorial governments to urgently complete a renewed Agreement on Internal Trade.
• work with provincial and territorial governments to ensure their laws and policies don't "unnecessarily restrict the free movement of people, goods, services and investment in Canada."
• consult with professional regulatory bodies to work on mutual recognition of education and professional qualifications and certifications between provinces and territories.
• increase funding to the Internal Trade Secretariat and Statistics Canada for research and data collection.
• conclude an agreement with provincial and territorial governments that want to participate in a joint securities regulator, but let those who opt out use the existing passport system.
• support the creation of a “national corridor” to transport goods and services to tidewater through pipelines, railways, fibre optic cables, transmission lines and any other appropriate means.