Canadian Supreme Court Upholds Restrictions on Interprovincial Transportation of Alcohol

The Supreme Court of Canada issued a ruling in a highly anticipated case affecting the movement of alcohol across provincial borders, which was forecast by some as a potential Granholm moment for the nation. Such hopes were dashed, though, by the Court’s ruling.

In an unanimous vote, the Court ruled that provinces were not constitutionally prohibited from imposing restrictions on importing certain goods from other provinces, as long as the intent of those restrictions was not to impede trade. The case, Her Majesty the Queen v. Gerard Comeau, arose after the defendant, a resident of New Brunswick, was stopped at the border with Quebec with an amount of alcohol in excess of New Brunswick’s personal importation limit. He was fined C$ 292.50, but decided to contest the charge in court arguing that the importation limit was in violation of Canada’s constitution.

Specifically, Comeau argued that section 121 of the Constitution Act, which reads that goods from one province “shall . . . be admitted free into each of the other Provinces,” meant that New Brunswick’s importation limit was improper. However, a decision from the Supreme Court in 1921 had said that section 121 only prevented tariff barriers to trade, but not other barriers like volume limits.

Ultimately, the Supreme Court upheld that previous ruling, determining that section 121 did not give free reign to interprovincial trade; provinces can impose certain barriers, as long as their main purpose is not to restrict trade.

The Court found that New Brunswick’s importation limit was permissible, as its main purpose was to prevent “excessive quantities of liquor from supplies not managed by the province” from entering its borders. The province did not impose an absolute barrier to importing alcohol, merely a lesser restriction designed to limit alcohol imports not controlled by the New Brunswick Liquor Corporation, a body establishing and operating under the auspices of the provincial government.

Most Canadian provinces also operate in a control system, where the governing body directs the distribution and/or retailing of alcoholic beverages (only Alberta has fully privatized). They also mostly all have importation limits like New Brunswick.

In effect, the Supreme Court’s decision means nothing has changed for alcohol suppliers or consumers in their ability to bring alcohol across provincial borders. Canada missed an opportunity like Granholm, and so nothing really will change.

This does not mean that the dream of a Canadian DtC market is dead, merely that relief won’t come judicially anytime soon. Instead, it now turns to the provinces themselves to open their borders legislatively and give their residents access to the greater world of beverage alcohol.

 

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