Free Trade Within Canada

I blogged last year about efforts to promote free trade within Canada, through an improved “Agreement on Internal Trade.” Some Canadians are now attempting a new approach to addressing this problem: Invoking the Canadian Constitution.

Here’s what happened to trigger the constitutional litigation, via the Canadian Constitution Foundation:

On October 6, 2012, New Brunswick resident Gerard Comeau decided to go to Quebec on a booze run. As a result of his trip, Mr. Comeau was surprised to find himself charged with violating New Brunswick’s Liquor Control Act.

Here is the strange part: Mr. Comeau’s purchase of beer and liquor in Quebec was entirely legal. His alleged crime was bringing it home to New Brunswick.

Mr. Comeau was stopped in Campbellton, New Brunswick just after crossing the bridge spanning the Quebec-New Brunswick border. He had been followed by the RCMP while he made two stops to buy liquor in Quebec. He was charged with violating the ban on bringing in more than 12 pints of beer or liquor from an out-of-province source (per s. 43 of the Act). As a New Brunswick resident, you can legally buy larger amounts only from a New Brunswick Liquor Corporation store. This crown corporation holds a legally enforced monopoly on liquor sales in the province, and it effectively protects its monopoly across provincial borders through the Liquor Control Act’s prohibitions on importation.

So what does the Canadian Constitution say about all this?  Section 121 of the Constitution Act, 1867 states that: “121. 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.”  You might think that would be enough to ensure free trade, but apparently there is a 1921 Supreme Court decision narrowly interpreting the provision so that it only prohibits customs duties imposed at the border.

The Canadian Constitution Foundation is bringing the litigation in this case, and is arguing for a broader view of the provision, which would allow Canadians to bring goods accross provincial borders more generally. They argue that:

If Comeau is successful in restoring the correct, original meaning of s. 121 of the constitution, many forms of internal trade barriers may also be invalidated.  The implications go beyond the liquor and beer industries.  Restrictions on interprovincial trade in eggs, poultry and dairy products—often referred to as supply management—may likewise be considered unconstitutional.

Through NAFTA, Canadians have (mostly) free trade with the United States.  It would be nice if they also had free trade with each other.

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