Canada: The Great Canadian Beer Run: New Brunswick Court Strikes Down Restrictions On Free Trade As Unconstitutional

Surely there can be no dispute more Canadian than Gérald Comeau's constitutional challenge to laws preventing him from bringing a few cases of Quebec beer into New Brunswick. Mr. Comeau's challenge not only succeeded; it threatened to upset 95 years of precedent in Canadian constitutional law. In a case widely followed in national media, the Provincial Court of New Brunswick (Court) dismissed charges against Mr. Comeau arising from what will likely be his historic beer run. The Court in R. v. Comeau (Comeau) ruled that section 121 of the Constitution Act, 1867, must be interpreted as the "Fathers of Confederation" intended, that is, as guaranteeing freedom of trade between the provinces of Canada.

On May 27, 2016, the attorney general of New Brunswick announced that it is seeking leave to appeal of the Comeau decision to the New Brunswick Court of Appeal. If the conclusion in Comeau is affirmed on appeal, it has the potential to dramatically change the legal foundation of many provincial and federal regulatory regimes affecting interprovincial trade.

FACTS

In 2012, Comeau crossed the border between Quebec and New Brunswick to purchase alcohol. On his return to New Brunswick, Mr. Comeau was stopped by the RCMP. The Mounties found 15 cases of beer and three bottles of liquor in Mr. Comeau's vehicle. He was charged and fined C$292.50 for contravening sections of the New Brunswick Liquor Control Act. The relevant provisions of the Liquor Control Act do not prohibit the importation of liquor from outside the province. Rather, the sections prohibit anyone in New Brunswick from possessing more than 12 pints of beer that were not purchased from a liquor store in the province.

Mr. Comeau argued the charge was of no force or effect because the sections of the Liquor Control Act were contrary to section 121 of the Constitution Act, 1867. Section 121 states: "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." The problem facing Mr. Comeau was a long history of case law that had interpreted the section narrowly. The source of this case law was a 1921 case from the Supreme Court of Canada called Gold Seal Ltd. v. Alberta (Attorney General) (Gold Seal). That case held that section 121 does nothing more than protect the movement of Canadian goods against interprovincial "custom duties" or "charges." This interpretation has been applied by all provinces and territories in Canada for over 95 years.

NEW BRUNSWICK PROVINCIAL COURT DECISION

Mr. Comeau argued that Gold Seal was wrongly decided because it did not consider the significant historical evidence of intention of the drafters of the Constitution Act, 1867. Mr. Comeau tendered expert evidence of historical context of the formative years of Confederation, the intention of the "Fathers of Confederation", and the drafting of the Constitution Act, 1867, then known as the British North America Act. The Court found that the historical evidence was that the Fathers of Confederation wished to implement free trade between the newly formed provinces of Canada. Economic development was a foundational reason for Confederation. Canada had recently lost freedom of trade with the United States in the years prior to the Civil War, and the founders were keen to replace it within Canada. The Court found that based on this historical evidence, the fact that section 121 does not include the words "duties", or words to that effect, meant that the section was originally intended to be taken literally: no restrictions on free trade within the provinces.

The Court found that the historical context was key to looking past the Gold Seal decision; the Court in Gold Seal did not consider historical evidence of the original intention of section 121. Had it done so, it would have decided the matter before it differently. On this basis, the Court found that the narrow and strict interpretation placed upon section 121 in the Gold Seal case was unwarranted and unfounded, and that the original interpretation of unfettered interprovincial free trade contemplated by the Fathers of Confederation should prevail. On this interpretation, the Court held that the relevant sections of the Liquor Control Act were unconstitutional and dismissed the charge.

IMPLICATIONS

The Court in Comeau was very alive to the significant implications of the decision, stating its view that, the "very nature of the Canadian federation is at stake." In essence, the Court was asked to overturn 95 years of judicial precedent, which had coalesced into state action. The Court acknowledged that in those 95 years, governments put in place a number of restrictive measures across Canada, including "marketing boards such as for wheat, eggs, milk and poultry, provincial liquor monopolies in all provinces, and a host of existing schemes that interfere with interprovincial trade." The Court also noted that there are "innumerable policies put in place by the provinces that could be understood to limit free trade between the provinces," including:

  • Different tax rates and other tax policies, some of them fashioned to attract businesses from other jurisdictions
  • Different professional accreditation and licensing standards
  • Different product standards, labelling requirements, and grading schemes
  • Agricultural commodity supply management schemes that define quantities produced and prices paid for products
  • Various policies to encourage the development of provincial economic sectors, including natural resources
  • Provincial liquor policies encouraging the consumption of products produced from within the province
  • Government procurement policies favouring domestic suppliers of goods and services even though out-of-province bids may be superior on quality or price

In addition, the Gold Seal interpretation has also "enabled the creation of federal schemes that have imposed interprovincial trade barriers in the form of mandatory sale requirements, prohibitions of interprovincial shipments, and imposition of provincial quotas."

Despite the complexity and breadth of the regulatory system created by the provinces and the federal government to control the inter-provincial economy, the Court in Comeau may have initiated the process of undermining the legal foundations of that regulatory system. Comeau does not represent settled law, however. It is only the decision of a provincial court, albeit one that is carefully and thoroughly reasoned. The appeal to the New Brunswick Court of Appeal will put its blunt originalist interpretation of the Constitution Act, 1867, to the test. In any event, this issue may be of sufficient national importance that it could eventually wind up in a review by the Supreme Court of Canada, where Gold Seal, the reasoning in Comeau, and the interprovincial regulatory state will be at issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
23 Nov 2018, Other, Toronto, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

28 Nov 2018, Speaking Engagement, Toronto, Canada

Arbitration has a number of advantages and some disadvantages for the resolution of domestic and international commercial disputes.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions