Canada’s Supreme Court dismisses cross-border ‘free the beer’ case

A Canadian man has lost his battle against the cross-border alcohol limits, which had been dubbed ‘free the beer’, after the Supreme Court of Canada upheld the existing law, stating that provinces have the right to make laws in their own jurisdictions.

Gerard Comeau, from the Canadian province of New Brunswick, challenged the limits that control the amount of alcohol you can carry across provincial borders.

In a unanimous ruling on 19 April, all nine Supreme Court judges found that the existing laws were constitutional. They stated that provinces have the right to make their own laws “to achieve other goals within their powers, even though the laws may have the incidental effect of impeding the passage of goods over interprovincial borders”.

The court ruling continued: “To require full economic integration would significantly undermine the shape of Canadian federalism, which is built upon regional diversity within a single nation”.

Comeau was stopped by police in 2012, when travelling into New Brunswick from Quebec, in possession of 354 bottles and cans of beer along with three bottles of spirits. Comeau stated that he travelled to Quebec as he could get a better price for the beer, but was later fined C$240 plus fees for not observing the cross-border limits.

He subsequently fought the fine, arguing that section 121 of the 1867 Constitution Act states that Canadian goods should “be admitted free into each of the other provinces”.

The Crown, on the other hand, argued that section 121 was only intended to prevent provinces from charging tariffs or “tariff-like measures”.

It stated: “With respect to the text of s. 121 , the phrase “admitted free” is ambiguous, and falls to be interpreted on the basis of the historical, legislative and constitutional contexts. To achieve economic union, the framers of the Constitution agreed that individual provinces needed to relinquish their tariff powers. The historical context supports the view that, at a minimum, s. 121 prohibits the imposition of charges on goods crossing provincial boundaries — tariffs and tariff‑like measures. But the historical evidence nowhere suggests that provinces would lose their power to legislate under s. 92 of the Constitution Act, 1867 for the benefit of their constituents even if that might have impacts on interprovincial trade”.

The initial trial judge sided with Comeau, while the New Brunswick Court of Appeal dismissed the Crown’s requested for permission to appeal. This prompted the Crown’s decision to appeal to the Supreme Court.

The Supreme Court stated that the main purpose of the New Brunswick laws was not to restrict the movement of alcohol but rather to manage the production, movement, sale and use of alcohol within the province.

The ruling stated: “The objective of the New Brunswick scheme is not to restrict trade across a provincial boundary, but to enable public supervision of the production, movement, sale, and use of alcohol within New Brunswick. It is common ground that provinces are able to enact schemes to manage the supply of and demand for liquor within their borders: Air Canada v. Ontario (Liquor Control Board), [1997] 2 S.C.R. 581, at para. 55, citing R. v. Gautreau (1978), 21 N.B.R. (2d) 701 (S.C. (App. Div.)). Governments manage liquor prices, storage and distribution with a view to diverse internal policy objectives. Although the Crown conceded that New Brunswick generates revenue from its legislative scheme, this is not the primary purpose of the scheme, but an offshoot of it. Finally, s. 134(b) is not divorced from the objective of the larger scheme. It plainly serves New Brunswick’s choice to control the supply and use of liquor within the province”.

It argued that if section 121 was understood to guarantee free inter-provincial trade, it would have far-reaching effects on agricultural supply management, public health prohibitions, environmental controls and similar schemes”.

“Agricultural supply management schemes, public health-driven prohibitions, environmental controls, and innumerable comparable regulatory measures that incidentally impede the passage of goods crossing provincial borders may be invalid,” it stated.

Speaking to media while on his visit to London, Canadian Prime Minister Justin Trudeau said: “We will of course abide by and respect the Supreme Court’s decision but we will take the time to properly study the decision and work on the ramifications of it.

“We know there will continue to be issues that will require further discussion with the provinces, but this is something we’ve made significant progress on and we will continue to.”

“[The court is] maintaining the status quo and are not prepared to go forward a little bit. I’m disappointed in them”.

Dan Paszkowski, president of the Canadian Vintners Association, also expressed his disappointment after the verdict: “We respect the Court’s ruling but are disappointed at this missed opportunity to remove interprovincial trade restrictions. Removing restrictions would have opened the door to allowing consumers to order wine for direct delivery to their home from any Canadian winery located in any province. We call that Direct-to-Consumer, it is something nine out of 10 Canadians believe should be permitted, and we now eagerly await the provinces making this choice available to their citizens.”

“We will continue our work with the federal / provincial / territorial governments’ Alcoholic Beverages Working Group to allow interprovincial wine delivery from wineries to consumers. It’s important to recognise that interprovincial trade barriers affect a range of industries, including wine”.