Cross-border booze case gives Supreme Court chance to correct mistake, lawyers argue

Lawyers for a New Brunswick man who was fined for bringing home a trunkful of cheap booze from Quebec want the Supreme Court of Canada to correct what they say is a long-standing misinterpretation of the Constitution Act of 1867.

Gerard Comeau's offence was that he exceeded provincial importation limits on alcohol.

But his lawyers say Section 121 of the Constitution Act requires that the movement of all items of "growth, produce or manufacture" among provinces be unrestrained by tariff and non-tariff trade barriers alike.

"If a federal or provincial measure interferes with one's ability to transfer goods to another province and discriminates against extra-provincial entities, then it is a trade barrier and therefore impermissible," the lawyers write in arguments filed with the Supreme Court of Canada on Friday.

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Comeau, a retired NB Power lineman, was charged in 2012 and fined $292.50 after RCMP stopped him driving home from Quebec with 14 cases of beer and three bottles of liquor in his vehicle.​

New Brunswick's Liquor Control Act sets a personal importation limit of 12 pints of beer or one bottle of liquor or wine.

​But Campbellton provincial court Judge Ronald LeBlanc ruled in April 2016 that the liquor restriction was unconstitutional because Section 121 of the Constitution states products from any province "shall … be admitted free into each of the other provinces."

New Brunswick prosecutors are appealing LeBlanc's decision to the Supreme Court of Canada, with a hearing slated for Dec. 6 and 7.

They contend that upholding Comeau's acquittal would "propose an end to Canadian federalism as it was originally conceived, has politically evolved and is judicially confirmed" by the Supreme Court itself, which has previously held Section 121 prohibits only "customs duties," or interprovincial tariffs.

'By upholding the Comeau interpretation, this Court can remedy a distortion in constitutional law that has worked against this country's economic integration for generations.'- Lawyers for Gerard Comeau

Comeau's lawyers counter that the precedent-setting case — Gold Seal Limited v. the Attorney General of the Province of Alberta in 1921 — has created a "system failure" within Canadian federalism by allowing for non-tariff trade barriers, which make importing and exporting products difficult or costly.

The Gold Seal interpretation "has served as an unwarranted invitation to use non-tariff trade barriers as an instrument of protectionism and has thereby undermined the integration of our national economy," Ian Blue, Arnold Schwisberg and Mikael Bernard state in the defence document.

They argue the Fathers of Confederation changed the wording "admitted free from duty" that was used in older statutes to simply "admitted free" to broaden the meaning and protect interprovincial trade from both tariff and non-tariff barriers.

"By upholding the Comeau interpretation, this Court can remedy [the Gold Seal] distortion in constitutional law that has worked against this country's economic integration for generations," they state.

It could mean the end of provincial monopolies on liquor sales and break down other interprovincial barriers that some studies suggest cost the country between $50 billion and $130 billion in lost GDP every year.

Crown's view 'somewhat apocalyptic'

Comeau's lawyers describe the Crown's vision of the destruction of co-operative federalism, democracy and constitutionalism as we know them as "somewhat apocalyptic."

"Canadian business and the Canadian economy are sufficiently dynamic, innovative and flexible to prosper and grow under such a rule," they argue.

The lawyers also take issue with the Crown's suggestion the Comeau interpretation would put Canada's supply management system in jeopardy.

They acknowledge it might require changes to existing restrictions to allow the sale of butter, cheese, yogurt, chicken, eggs and turkey from one province to another.

"It will not, however, affect import controls needed to allow the supply system management to function properly nor will it result in any new international trade agreement," they state.

'Enough is enough'

Howard Anglin, executive director of the Canadian Constitution Foundation, which has been supporting Comeau's legal fight from the beginning, said the case boils down to deciding whether Canada is "one economic unit as a country," like the United States and "most other federations."

"Or are we going to continue to allow these provincial barriers to trade, which have grown up and cluttered the legal and economic landscape for the last 150 years, to persist?"

"The intent of the Fathers of Confederation, embodied in the clear language of the Constitution that they drafted, requires that provinces allow goods to be freely traded and moved across provincial borders," said Anglin.

"For almost a century, due to, in this case anachronistic prohibition-era laws, that hasn't been the case," he said.

"And it took one man, Gerard Comeau standing up and saying, 'That doesn't make sense. Enough is enough,' and to take on the provinces."

12 interveners

The wide range of businesses, organizations and associations from across the country acting as interveners in the appeal underlines how broad the implications of the decision could be.

The Supreme Court has granted intervener status to all 12 applicants, some of which indicate they're acting on behalf of dozens of others.

Each will be permitted to file written arguments not exceeding 10 pages before Nov. 21 and present oral arguments not exceeding five minutes at the hearing in Ottawa, the court ruled this week.

The majority of the interveners are industry-related, ranging from small wineries to beer giants. They are seeking freer interprovincial trade.

Other applicants, including a marijuana advocacy group, business and consumer organizations, a courier service, a think tank and agriculture supply management associations, contend the case is about much more than provincial monopolies on alcohol and could have far-reaching constitutional and economic implications.

None of the interveners will be entitled to "raise new issues or to adduce further evidence or otherwise to supplement the record of the parties," the Supreme Court ruled.

The attorneys general of Canada, Ontario, Quebec, Nova Scotia, British Columbia, Prince Edward Island, Saskatchewan, Alberta, Newfoundland and Labrador, Northwest Territories and the Nunavut minister of Justice have also been granted permission to present oral arguments not exceeding 10 minutes at the hearing.

They previously filed notices of intervention and are automatically granted the right to make submissions on the constitutional issue.

The successful intervener applicants include:

• Liquidity Wines Ltd., Painted Rock Estate Winery Ltd., 50th Parallel Estate Limited Partnership, Okanagan Crush Pad Winery Ltd., and Noble Ridge Vineyard and Winery Limited Partnership.
• Artisan Ales Consulting Inc.
• Canadian Vintners Association.
• Association of Canadian Distillers, operating as Spirits Canada.
• Canada's National Brewers, advocates for Canada's largest and oldest brewers, Molson and Labatt.
• Alberta Small Brewers Association.
• Cannabis Culture.
• Consumers Council of Canada.
• Canadian Chamber of Commerce and Canadian Federation of Independent Business.
• The Dairy Farmers of Canada, Egg Farmers of Canada, Chicken Farmers of Canada, Turkey Farmers of Canada, and the Canadian Hatching Egg Producers.
• Federal Express Canada.
• Montreal Economic Institute.