Despite ‘compromise’ to loosen booze transport rules, here’s why provinces still won’t #FreeTheBeer

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An agreement has been reached in principle by Canada’s premiers to give consumers an increase in the amount of booze that can be brought across borders, but it’s far from a done deal. Morganne Campbell reports on what happened at the meeting and what other topics were discussed. – Jul 20, 2018

A deal announced by provincial premiers on Friday means Canadians will be able to bring more booze between provinces for their own use.

But economists say the move was a “compromise” by provinces alarmed by the broad support garnered by a legal challenge to drop entirely interprovincial booze limits which went all the way to the Supreme Court earlier this year — and not a sign they have any further intention of following through on demands to #FreeTheBeer.

READ MORE: Premiers strike deal to double amount of beer, alcohol allowed across borders

“The reason that the provinces are doing this at all is because they were very embarrassed by all the publicity that surrounded the Comeau case,” said Brian Crowley, managing director of the Macdonald-Laurier Institute.

“Even though the provinces won that case, I think they were quite taken aback by the public disapproval.”

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Retired New Brunswicker Gerard Comeau was arrested and fined in 2012 after he drove across the border to Quebec, bought 14 cases of beer and three bottles of spirits, and tried to bring them back.

He fought the fine and won in provincial court, but in April, the Supreme Court ruled the province was within its rights to fine him.

That ruling said that while provinces can’t directly put barriers in place to limit the free flow of goods, putting in place other kinds of regulations to do with things like health that might restrict free trade as a consequence are allowed.

Meanwhile, trade tensions have continued to worsen with the United States under the Trump administration.

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Prime Minister Justin Trudeau said earlier this week that in light of that, there needs to be a focus on eliminating internal barriers to free trade within Canada.

Days later, he named New Brunswick MP Dominic LeBlanc as Minister of Intergovernmental Affairs.

READ MORE: Trudeau cabinet shuffle rejigs focus on international trade, borders, provincial relations

Daniel Schwanen, vice president of research at the C.D. Howe Institute, said those are all factors that likely contributed to the premiers deciding to come to a compromise and loosen up some — but not all — limits on how much booze Canadians can bring across provincial borders.

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Alexandre Moreau, public policy analyst at the Montreal Economic Institute, offered similar comments in a press release.

“This is definitely good news,” he said. “But it’s only one of the barriers to free trade that exist within Canada — and it’s only a relaxing of that barrier.”

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The reason that limits still remain in place is two-fold.

First, the provinces want the tax revenue they get from rules that force residents to buy most of their booze within their home province.

“They understand that the only case in which somebody is going to have to cross the border to buy beer and wine and bring it back is if in the neighbouring province, the price is lower than their own province,” said Crowley. “And the primary reason why the price would be lower is the tax is lower.”

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Second, provinces see the restrictions as a way of dealing with social and local concerns such as enforcing legal drinking ages and monopolies on sales.

Making sure the markets offer consumers choice and are sufficiently competitive is also a consideration, noted Schwanen.

“It’s the trade off between the two that’s the topic,” he said.

The agreement reached by the provinces does not say by how much exactly the personal limits for booze transportation will change.

Some provinces may remove them entirely, some will double the limits, and some still have to decide.

One thing that is clear is that the pressure on provinces to step up to the plate is not going away any time soon, particularly given Trudeau and the premiers are set to meet later this fall to discuss both international and internal trade.

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