Last Call: Supreme Court Limits Interprovincial Trade in Alcohol

On April 19, 2018, the Supreme Court of Canada delivered its decision in R. v. Comeau, 2018 SCC 15, and upheld a New Brunswick law that limits the amount of alcohol a consumer is allowed to import into the province. The decision impacts the ability of craft producers of alcoholic beverages to sell their product outside of their home province and also affects a consumer’s ability to import alcoholic beverages from across Canada. The decision will likely have a similar effect on the free movement of cannabis across Canada once its recreational use is legalized later this year.

The case before the Supreme Court concerned the prosecution of Mr. Gerard Comeau.  Mr. Comeau is a resident of the Tracadie-Sheila region on the Acadian Peninsula in northeastern New Brunswick. He lives, as the Supreme Court stated, “tantalizingly” close to cheaper alcohol prices in Quebec. The price of alcohol varies greatly from province to province and Mr. Comeau was seeking to take advantage of the cheaper alcohol nearby, but unfortunately for him, he was being followed by the RCMP.

As part of a sting operation, the RCMP was monitoring New Brunswick visitors who commonly frequented liquor stores on the Quebec side. Officers in Quebec would record visitors’ information and pass it on to their New Brunswick colleagues, who were waiting across the border. Mr. Comeau was tracked, pulled over by the RCMP, issued a fine in the amount of $292.50, and his purchase of fourteen cases of beer, two bottles of whiskey, and one bottle of liqueur was confiscated.

Mr. Comeau challenged the legality of his fine. He was charged under section 134(b) of New Brunswick’s Liquor Control Act, which essentially limits the amount of alcohol a resident of New Brunswick is allowed to import into the province. Mr. Comeau argued that this was unconstitutional because it contravened Section 121 of the Constitution Act, 1867, which, as Mr. Comeau suggested, prohibits trade barriers between provinces.

Section 121 of the Constitution Act, 1867, provides:

“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 trial judge agreed with Mr. Comeau, found s. 134(b) to be unconstitutional and of no force and effect against him, and therefore dismissed the charge.

The trial judge interpreted section 121 of the Constitution Act using historical evidence about the intentions of the drafters of s. 121 and an expert’s opinion on how that evidence should guide the interpretation of section 121. The problem with this approach was that the trial judge ignored binding judicial precedent. This was a fundamental aspect of the Supreme Court ruling, and, in fact, the Supreme Court stated that the Crown’s appeal of Comeau’s acquittal could have been allowed on this point alone.

At the end of the day, this case was not really about beer. By the time the Supreme Court allowed the Crown appeal and upheld the constitutionality of New Brunswick’s alcohol regulatory regime, it was being considered in the context of the bigger picture: the constitutional right of the provinces to restrict the importation of goods across provinces. The Supreme Court unanimously upheld this right, so long as the primary aim of the restriction is not to impede trade.

In this case, the Court concluded that the objective of the New Brunswick scheme is not to restrict trade across a provincial boundary, but to serve the interests of public health and safety with respect to the supervision of the production, movement, sale, and use of alcohol within New Brunswick.

What about cannabis?

Had the case been decided differently, it could have had major implications affecting several industries, including the recreational use of cannabis. Cannabis law will be rapidly evolving as the provinces and territories figure out regulation and distribution schemes. For now, in light of the Comeau decision, efforts to control the movement of cannabis across provincial borders will be bolstered by the Supreme Court’s decision.