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.