Supreme Court upholds law in cross-border beer case: The Constitution ‘does not impose absolute free trade across Canada’ | National Union of Public and General Employees

Supreme Court upholds law in cross-border beer case: The Constitution ‘does not impose absolute free trade across Canada’

A clear victory for provinces to regulate the economy in the public interest.

Ottawa (19 April 2018) — The labour movement is praising a Supreme Court of Canada ruling released today as a clear and unequivocal victory for provinces to regulate the economy in the public interest. The ruling upholds the power of legislatures and democratic majorities to set economic policies.

In a unanimous decision released today, the Supreme Court of Canada affirmed the constitutionality of a New Brunswick law that allowed the RCMP to fine a man who bought large quantities of beer and liquor from neighbouring Quebec.

The decision says that 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 this respect, the Court also defended and upheld as “vital” what they called the “federalism principle” which “recognizes the autonomy of provincial governments to develop their societies within their respective spheres of jurisdiction.”

A clear and unequivocal victory for democracy and for federalism

In response to the ruling, Larry Brown, President of NUPGE, said, “This is a clear and unequivocal victory for democracy and for federalism.” Brown added, “With this ruling, the Court declared that there is simply no doubt that the provinces have the fundamental constitutional right to regulate the economy in the public interest.” Brown concluded by praising the Court: “We are grateful to the Court for this unanimous decision that upholds the power of legislatures and democratic majorities to set economic policies.”

A summary of the case

In October 2012, Gerard Comeau of Tracadie, N.B., drove across the border to Quebec to buy 14 cases of beer and 3 bottles of liquor from 3 stores where he could buy them at a lower price.

Comeau was fined $292.50 under New Brunswick's Liquor Control Act for being in possession of alcohol he had not purchased through his province's liquor corporation. Rather than pay the fine, Comeau enlisted the help of lawyers to argue that the restriction was unconstitutional. The 4-day trial in August 2016 hinged on Section 134 (b) of the New Brunswick Liquor Control Act, which states that people in New Brunswick may only have liquor purchased from the New Brunswick Liquor Corporation, and the exception in the regulations restricted the importation of alcohol for personal use to 1 bottle of liquor or 12 pints of beer.

On April 29, 2016, provincial court judge Ronald LeBlanc accepted Comeau's argument and dismissed the charges against him, ruling that the Liquor Control Act provision amounted to a trade barrier that violated the Constitution Act, 1867, Section 121, which 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."

In May 2016, The New Brunswick Attorney General appealed the judge’s decision on the ground that LeBlanc erred in his legal interpretation of both section 121 of the Constitution and New Brunswick’s Liquor Control Act. But the provincial Court of Appeal dismissed the appeal, so the case headed to the Supreme Court of Canada.

A unanimous decision in favour of democratic oversight

In its unanimous decision, the Court ruled that "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 had agreed that individual provinces needed to relinquish their tariff powers, the Court said. So the historical context explains why Section 121 forbids tariffs and tariff-like charges on goods crossing provincial boundaries.

However, the historical evidence nowhere suggests that provinces would lose their power to legislate in the public interest, even if that might affect interprovincial trade.

The Constitution 'does not impose absolute free 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."


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE

 

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