New Brunswick cross-border alcohol ruling to go to Supreme Court

The Supreme Court of Canada has agreed to hear a Crown appeal of a New Brunswick ruling that overturned a ban on bringing alcohol across provincial boundaries. Lars Hagberg / The Canadian Press

The Supreme Court of Canada will take a look at what the fathers of Confederation really meant by a constitutional clause about free trade among provinces in a case that started over some cases of beer and three bottles of liquor.

The court agreed Thursday to hear a Crown appeal of a New Brunswick ruling overturning a ban on bringing alcohol across provincial boundaries.

As usual, there were no written reasons provided, though the court took the uncommon step of awarding costs to the defendant for the submissions.

The case now stands a chance of altering over a century’s worth of provincial supply-management systems, Crown monopolies on alcohol and other non-tariff barriers erected within the federation, says defence lawyer Arnold Schwisberg.

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

“I’ve said to the politicians, please don’t let us down, be prepared to have some kind of transitional plan in place should limitations on the cross border movement of alcohol and supply-management systems change in the new era,” said Schwisberg in an interview.

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The case sprang to prominence last year when a provincial court judge threw out all charges against retiree Gerard Comeau after he was ticketed for importing 14 cases of beer and three bottles of liquor from a Quebec border town.

In an 88-page decision, Judge Ronald LeBlanc said the original framers of the Constitution never intended that laws should blatantly block the free flow of goods within their new country.

The New Brunswick Liquor Control Act prohibits anyone in the province from having more than 12 pints of beer not purchased through a liquor store in the province, a prohibition the judge called unconstitutional.

The New Brunswick Court of Appeal declined to hear the Crown’s appeal.

WATCH: Should beer be allowed to flow freely between provinces without any restrictions?

Click to play video: 'How a court case may open the way to cheaper beer in the province next door'
How a court case may open the way to cheaper beer in the province next door

Comeau, who was fined $292.50 in 2012, has the support of the Canadian Constitution Foundation as his fight moves to the country’s highest court.

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Schwisberg said he’s very confident the historical evidence expert witnesses gave at trial has the potential to overcome prior decisions by the top court.

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Constitutional provision

During the New Brunswick trial, historians presented fresh arguments suggesting the framers of the Constitution created s. 121 of the British North America Act with the express intention of avoiding all forms of non-tariff barriers.

The section reads, “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.”

Court heard from historian Andrew Smith that the provision was constructed to deliberately avoid referring to duties or tariffs because it was meant to prohibit all forms of trade barrier, and keep the Canadian market open at a time trade barriers were being erected by the Americans.

The historian testified the original phrase in s. 121 said the goods should be “admitted free of duty,” but the British experts who reviewed the BNA Act recommended – and the Canadians accepted – that this would be too limiting a wording.

“They wanted to make sure that goods flowing within Canada are also free of any non-tariff barriers,” said Schwisberg, adding that the fathers of Confederation wanted to avoid the American practice of erecting a vast array of non-tariff barriers.

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In a news release issued Thursday, the New Brunswick Crown said it will submit its pleas “on the important issue of Article 121 of the Constitution and its impact on provincial authority to regulate alcoholic beverages within New Brunswick borders.”

“There will be no further comments until this matter is concluded,” said the release.

‘This is a decision of polarizing national interest’

The New Brunswick government has previously warned the Comeau case has upended decades of legal thinking and strikes at the heart of Canadian federalism.

The original ruling, and a refusal by the province’s Appeal Court to review the decision, could hamper government control over interprovincial trade and create nationwide confusion around the extent of provincial authority, New Brunswick says.

“The combined effect of these two decisions calls into question several judgments of this court beginning in 1921 as well as 150 years of constitutional compromise,” the government says in its memorandum of argument to the Supreme Court of Canada. “This is a decision of polarizing national interest.”

An analysis last year by Malcolm Lavoie of the University of Alberta’s law faculty hinted at just how far-reaching LeBlanc’s decision could be.

“The approach … adopted by the trial judge threatens to shift the structure of Canadian federalism, as well as the structure of economic regulation in Canada,” Lavoie wrote. “There is simply no question that a robust interpretation of the Constitution’s free-trade provision would restrict the power of democratic majorities, especially at the provincial level, to set economic policies.”

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Schwisberg said he expected the Supreme Court judges will be hearing his evidence that is critical of a key 1921 decision that came out of Alberta.

At the time, in the so-called Gold Seal decision, the court interpreted the BNA Act as being predominantly aimed at prohibiting interprovincial customs duties.

The defence lawyers attack this case as flawed, and have some evidence from biographical material that two of the Supreme Court of Canada judges discussed the matter with the then-federal minister of Justice prior to the case commencing.

Schwisberg said he expected the Supreme Court is likely to begin hearing the case some time in the first half of next year.

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