How a court case may open the way to cheaper beer in the province next door

Saskatchewan residents will be paying the most for certain sizes of beer across the country this year. This comes after the province raised the price of alcohol in their 2017-18 budget.
Molson Canadian beer cases are seen in Kingston, Ont. Lars Hagberg / The Canadian Press

On the Thanksgiving weekend of 2012, Gérard Comeau made the two-hour drive from Tracadie, N.B. to Pointe-à-la-Croix, Que., just on the Quebec side of the Restigouche River.

The first thing you see on the Quebec side of the bridge are three stores selling alcohol – two private stores and a Société des alcools du Québec (SAQ) provincial liquor store.

Comeau stopped at all three of them and stocked up, buying 15 cases of beer, two bottles of whiskey and another of liqueur. It was worth the drive – all of it was cheaper, a lot cheaper, than it would have been across the river in New Brunswick.

Because of different tax rates, beer (and other alcohol) can cost very different amounts in different provinces. Twenty-four cans of Molson Canadian, for example, costs about $34 in B.C. and Quebec, $50 in Alberta, and nearly $60 in Newfoundland.

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Graphic updated 9/15/2016

Where high-cost and low-cost provinces meet, people in the pricier province do the obvious thing and buy their beer in the cheaper one next door.

Comeau pointed his heavily loaded car toward home, and crossed the bridge back into New Brunswick.

At that point, his luck ran out. Comeau was breaking New Brunswick provincial law by bringing that much alcohol into the province, and he’d run into an RCMP sting operation. The Mounties confiscated his booze and wrote him a ticket.

(A private investigator later hired by Comeau’s lawyer found that two-thirds of the cars at convenience stores or the provincial liquor store in Pointe-à-la-Croix and the nearby Listuguj First Nation had New Brunswick plates. One, Wysote’s Convenience Store, had nearly all of the floor space taken up with beer.)

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Rather than pay the fine, which came to just under $300, Comeau chose to challenge the ticket in court. He chose a daring defence – that the New Brunswick law barring him from driving his beer across the bridge was unconstitutional.

His lawyer cited section 121 of the Constitution, which was part of the original British North America Act back in 1867, and has been there ever since:

Canadian Manufactures, etc.

 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.

It made national headlines in April when the judge agreed.

“The Fathers of Confederation wanted to implement free trade as between the provinces of the newly formed Canada,” wrote Ronald LeBlanc, a provincial court judge who heard the case in Campbellton.

“The Fathers of Confederation were not simply concerned with eliminating customs duties as between the provinces.  Rather, they wanted to avoid all such barriers, tariff or non-tariff.”

Leblanc dismissed the charge.

(Comeau’s defence was supported by the Canadian Constitution Foundation, a Calgary-based libertarian group.)

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New Brunswick isn’t done with Gérard Comeau – the province promptly appealed the decision, and the case may yet end up grinding its way slowly to the Supreme Court. The New Brunswick Court of Appeal will hear the case in October.

The case was allowed to skip a level of the New Brunswick courts. In May, the federal Conservatives called on the Liberals to refer the case directly to the Supreme Court.

(The Canadian courts have wrestled over the years with what Section 121 means, ruling on, for example, a requirement that butter sold in Quebec be wrapped in foil, or that Alberta hay trucked to B.C. must be unloaded and repacked to that province’s standards.)

WATCH: Conservative MP Dan Albas calls on government to “Free the beer” for this May long weekend, and allow Canadians to freely transport alcohol between provinces.
Click to play video '‘Free the beer!’: MP calls on government to allow alcohol to travel across provincial borders' ‘Free the beer!’: MP calls on government to allow alcohol to travel across provincial borders
‘Free the beer!’: MP calls on government to allow alcohol to travel across provincial borders

“The enforcement of these laws is extremely haphazard,” says Vancouver-based lawyer Mark Hicken, who specializes in alcohol-related issues. “There’s very little enforcement, until someone gets caught, which Mr. Comeau did in New Brunswick. It’s silly, really. You’ve got a very unfair enforcement mechanism and an unfair law.”

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Many provinces have set out limits for how much alcohol residents can bring home from other provinces that sound a lot like rules about duty-free limits on what you can bring into Canada. (Here are Ontario’s rules.)

WATCH: The way beer is priced in Alberta is changing again. Shallima Maharaj explains what the government is changing and how those in the beer industry are reacting.
Click to play video 'Alberta government shifts on beer-pricing policy' Alberta government shifts on beer-pricing policy
Alberta government shifts on beer-pricing policy

Unlike at international borders, however, provinces don’t have border checks or any system of customs inspection – if you want to move beer between provinces, all you have to do is load up the car and drive past a sign on the highway, or across a bridge.

The rules are “completely unenforceable,” Hocken says. “It’s ridiculous that provinces treat products from other provinces as if they were coming from somewhere outside the country.”

In the video below, an Ottawa man saves over $100 on an (illegally large) beer purchase in Quebec. Buying cheaper alcohol in Quebec is a long-standing tradition on the Ontario side of the Ottawa Valley:

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In 2015, changes to federal law allowed people to move beer across provincial borders as long as it was for personal consumption. (The provinces are free to make their own laws.)

READ MORE: Changes to Liquors Act allows beer and spirits to cross borders

It’s tempting for bars and restaurants to buy beer (and other alcohol) in lower-priced provinces, but that still violates federal law, Hocken says.

The punishments in the federal Importation of Intoxicating Liquors Act, first passed in 1928, seem not to have been updated in many years – the law calls for a $200 fine on the first offence, with a 90-day jail sentence if the fine isn’t paid.

“I’m not aware that anybody has been charged under that law for a very long time,” Hocken says.

“I looked, and I couldn’t find anything for decades and decades.”

On the other hand, a licenced establishment could violate the terms of its liquor licence by buying cheap out-of-province beer.

(In 2012, a restaurant in Perth-Andover, N.B. was fined $1,000 for selling beer bought in Quebec.)

The legalization of marijuana, expected in 2017, will complicate the issues further. Cash-strapped provinces are eager for the tax revenue that legal marijuana sales will bring in, and several have said they want to use their existing provincial liquor store systems for distribution.

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But if they don’t set taxes at the same rates, it’s easy to imagine a future in which Quebeckers drive to New Brunswick for cheaper pot and New Brunswickers drive to Quebec for cheaper beer, as governments now and then make an example of someone who’s at the wrong place at the wrong time.

(At the moment, ironically, there are no limits on shipping medical marijuana between provinces.)

READ MORE: Premiers fear ‘patchwork’ marijuana legalization

What’s the future of Canada’s beer system, with its mostly tolerated interprovincial smuggling, patchwork of private- and public-sector monopolies and unenforceable laws? Was the key to a more rational system sleeping in our 19th-century constitution all along?

The Comeau case may be the way to find out, Hicken predicts.

“It’s being appealed directly to the New Brunswick Court of Appeal, and it will be interesting to see what happens there.”

“It will probably be appealed to the Supreme Court of Canada, and that’s where the decision will really be made.”