The legal ruling that stops interprovincial trade in Canada

Section 121 of the Constitution Act of Canada 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.”

Enacted in 1867 as part of the British North America Act, it received little attention from the courts until an Alberta case, Gold Seal, went to the Supreme Court of Canada in 1921 where the court made passing reference to the section, holding Prohibition legislation was not barred by the section.

The court considered Prohibition to be in the same category as emergency or even war measures, drawing the analogy to stopping the interprovincial flow of goods contaminated by some virulent disease.

That brings us to Gerard Comeau in 2017.

He was acknowledged by the court to be a “good man,” who enjoyed the occasional beer. On a trip to Quebec, he stocked up on several cases of cheaper Quebec beer to take home to New Brunswick. He was stopped at the provincial border and fined for breaching New Brunswick’s Liquor Control Act, which prohibited bringing more than a minimal prescribed quantity of liquor from another province into the New Brunswick.

In other words, the legislation prohibited “an article of growth, produce or manufacture of any one of the provinces” from being “admitted free into each of the other provinces.”

Comeau was fined $300 and the case went before provincial court Judge LeBlanc. In a considered decision, he LeBlanc reviewed the historical context of the constitutional legislation and decided the charge against Comeau was contrary to Section 121 and was, therefore, unconstitutional.

The government appealed and the New Brunswick Court of Appeal declined to hear the appeal, thereby backing LeBlanc. The government then appealed to the Supreme Court of Canada.

The case attracted a great deal of attention and 33 intervenors were allowed to join the case, including every provincial and territorial government—all opposed—and the various milk and egg marketing boards, which were also all opposed. On the other side, a number of wineries, distillers and brewers and Federal Express backed Comeau.

The Supreme Court of Canada overturned LeBlanc’s decision and ruled the charge was not unconstitutional. In other words, provincial legislation restricting the flow of goods from another province did not offend Section 121’s requirement that such goods must be admitted free. What sort of legal (shenanagans) is that you may ask? Good question.

First the court chastised LeBlanc, a lowly provincial court judge, for not following its decision in the Gold Seal case. Lower court judges are bound by higher court decisions, even those making mere passing reference to an issue, even those that are clearly wrong.

Having re-established its hierarchical importance, the court then turned to New Brunswick’s Liquor Control Act. There was no avoiding the fact that the New Brunswick act clearly contravened the guarantee for free passage of goods enshrined in the Constitution.

So it must be struck down. Right? Wrong.

On its own ipse dixit (an assertion or statement made by an individual based solely on their own authority, without any supporting evidence or proof) the court decided to apply a two-part test—not only that the legislation restricted the free passage of goods, but that such restriction must be the primary purpose of the legislation. No such two-part test aligns with the principles of statutory interpretation.

The court, forced to find the New Brunswick act restricted free flow, applied part two of its “test” to find that the purpose of the Liquor Control Act was to regulate the handling and use of alcohol in the province and that the interprovincial restriction was merely incidental to that purpose. Thus the New Brunswick legislation was just fine, notwithstanding its clear contravention of the wording in the Constitution Act.

According to the court, a provincial regulatory act now overrides the Canadian Constitution. Strange.

It was open to the court to simply strike the portion of the act that contravened the Constitution Act, the portion restricting the interprovincial flow of goods. But no, instead it dreamed up its two-part test to support the restriction.

So, can I now rob a bank if my primary purpose is to save my family home from foreclosure?

The court’s decision cost Comeau a $300 fine but according to an International Monetary Fund study, interprovincial trade barriers add up to the equivalent of a 21% tariff. That’s a 21% price increase we each have to pay on the cost of goods purchased in Canada.

The Canadian Federation of Independent Business recently reported that removing the barriers would increase our economy by $200 billion annually.

Every Canadian has a personal stake in getting this decision overturned.

Laurie Armstrong is a retired lawyer who practiced in Victoria.