Beer pressure

By Justin Ling May 10, 201710 May 2017

Beer pressure


When the Supreme Court granted leave last week to hear the appeal in R. v. Comeau, there was elation in all sorts of different corners of the country.

Free marketeers are hoping the top court will finally pave the way for legal challenges to enforce the sort of free-trading union that (they suspect) the framers of the constitution always wanted.

Wine aficionados are anticipating the pleasure sipping B.C. wine in Nova Scotia, and Nova Scotia wine in B.C.

For provincial governments, the hope is that a ruling will reinforce their long-held power to regulate and manage certain domestic industries at their province’s borders.

Caught in the middle of it all are the provincial liquor boards, whose very existence might be on the line.

Tricia Waddell is an Alberta-based lawyer with Simplex Legal who has taken a specific interest in the law as it relates to wine. So Comeau is in her domain.

As CBA National reported last week, the top court’s job will be to figure out how exactly the Constitution Act, 1867 was intended to apply to interprovincial trade: Did the drafters of the Section 121 envision unfettered movement of goods and services, or did they simply want those goods to be “admitted free into each of the other Provinces”  in the most limited sense, as in free of tariffs?

“It had been previously interpreted by the Supreme Court of Canada itself to not extend to non-tariff barriers,” Waddell says. “But they have found some new evidence about the context of this section when it was actually put it into the Constitution.”

“It is actually a very compelling argument,” she adds – one that is undoubtedly causing angst in the provincial capitals, as the implications could be significant on a range of issues.

As part of the framework that allows provinces to decide what gets sold on their shelves, is the federal Importation of Intoxicating Liquors Act, which forbids the import or export of alcohol from one province to another unless a government agency is managing the trade.

If the Supreme Court sides with the free-marketeers in Comeau and rules against the validity of the federal law, “the very existence of the liquor boards could end up being challenged,” says Waddell. “We could see those sorts of subsidies in other provinces start to crumble.”

She points to Great Western Brewing, a Saskatchewan brewer that has launched a lawsuit against the Alberta government in 2016 for, in essence, subsidizing province-brewed beer. Edmonton hiked mark-ups for all beer in the province, only to exempt beer brewed and bottled in the province. Steamwhistle, a Toronto beer company, challenged similar price hikes from a year prior.

And the case goes beyond beer, to everyone’s sacred cow: Dairy.

Given that provincial dairy and poultry boards are, in essence, provincial fiefdoms — ones that tightly manage the movement of certain agricultural goods from one province to the next — they might be next on the list of targets.

Provinces, especially Quebec, are steadfast in their support for that system of provincial marketing boards, quotas, and trade restrictions, which only heightens the willingness for each province to hop in the fray on this case.

So expect the list of potential intervenors to be long.

It’s worth noting that much of Canadian anti-trade attitudes exist on the sub-national level and that complicate Canada’s trade negotiations and any litigation carried out before trade investment dispute bodies.  According to Waddell, if Comeau winds up interpreting the Constitution Act to be read much wider, “we may see a shift in how Canadian companies can trade, in a broader sense.”

That creates a lot of pressure building up on a case about beer.

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