Werner's Blog — Opinion, Analysis, Commentary
Landmark legal ruling on internal trade in Canada

Internal trade in Canada remains stifled by antiquated trade barriers that may seem ludricous in the 21st century. I blogged about this topic on August 6, 2014 and noted that the Canadian Constitution is quite clear on the topic. Section 121 says that:

“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.”

Today, the Honourable Judge Ronald LeBlanc issued a landmark ruling in Her Majesty the Queen v. Gérard Comeau on internal trade in Canada. The judge wrote that the issue before the court was

“[...] whether section 134(b) of the Liquor Control Act of New Brunswick violates section 121 of the Constitution Act, 1867, and is therefore of no force or effect as against the defendant. This issue requires the Court to address the meaning to be attributed to the words "admitted free" found in section 121 of the Constitution Act, 1867. The simplicity of the issue is rivalled only by the complexity of the factors that the Court must consider in arriving at its conclusion. The very nature of the Canadian federation is at stake.

Judge LeBlanc noted the efforts to remove internal trade barriers of the Agreement on Internal Trade and the related implementaton act. He also looked extensively on the framing of section 121 in our Constitution Act, especially as it moved from first to second draft. The Fathers of Confederation anticipated "greater trade as between the provinces" as well as "unfettered economic exchange and a more comprehensive economic union. Ultimately, Judge LeBlanc concludes that "Section 134(b) of the Liquor Control Act of New Brunswick constitutes a trade barrier which violates section 121 of the Constitution Act, 1867 and is therefore of no force or effect as against Gérard Comeau." The defendant will be delighted that he fighting his $292 ticket for buying beer in Quebec is null and void.

I hope the Crown will decide not to appeal this decision. Perhaps April 2016 marks the beginning of the end of internal trade barriers and misguided inter-provincial protectionism. Judge LeBlanc's 86-page ruling is well worth reading. His exegesis of the Constitution Act will delight legal scholars and economists alike.

The provinces should work together with the new Liberal government in Ottawa to develop a new 'Economic Charter of Rights' for fulfilling the promise of free economic exchange within our borders. Strike down what is left of obsolete inter-provincial trade barriers. Judge LeBlanc has had some damnatory words for the politicians and jurists who failed to implement the spirit of the constitution. He writes:

“I find that section 121 of the Constitution Act, 1867 has not fallen into desuetude. Its disuse or neglect has arisen as a result of an unfounded judicial interpretation which effects have continued for nearly a century.”

The impliations of the ruling could be far-reaching. Not only are liquor sales affected by internal trade barriers, but also many areas of agricultural production. The dairy industry may take note. And perhaps a brewery or vinery should send a few cases of beer or vine to Mr Comeau, who valiantly fought a battle for free trade within our borders.

Further Readings:
Posted on Friday, April 29, 2016 at 16:00 — #Trade
© 2024  Prof. Werner Antweiler, University of British Columbia.
[Sauder School of Business] [The University of British Columbia]