Friday, April 20, 2018

Looks like we are stuck with inter-provincial trade restrictions

New Brunswicker Gérard Comeau is something of a folk hero for many Canadians. Mr. Comeau was fined $292 some six years ago for crossing the border from Quebec with 14 cases of beer and 3 bottles of spirits. Like many of us, he thought the rules on the inter-provincial movement of alcohol were ridiculous and probably even unconstitutional. Unlike most of us, though, Mr. Comeau was willing to stick up for what he saw as his rights by taking his case to the New Brunswick Provincial Court, where he won. When the case hit the Supreme Court of Canada this week, though, that decision was overruled, and many of us still don't really understand why.
S.121 of the Canadian Constitution clearly states that goods moving from one province to another must be "admitted free", i.e. the country is effectively just one big free trade zone. That seems pretty clear and unequivocal, but the Supreme Court - probably worried about the political, economic and legal fallout from admitting that - ruled that the phrase is "ambiguous" (how, exactly?), and that it must be interpreted in light of the "principle of federalism", which allows for the reflection of regional diversity and local concerns. That would mean that the country is not a free trade zone at all, and is therefore subject to all the ridiculous restrictions on the movement of crops, livestock, cigarettes, alcohol, etc, etc, that we are currently saddled with. The way the Court gets around what is clearly the letter of the law is by saying that, although a province cannot set out to impose trade barriers, it can regulate the movement of goods for a different purpose, which may just look like a trade barrier. Calling it by its real name, this is in fact protectionism, something we are supposed to be against in this country, inter-provincial protectionism by means of what is known in trade policy circles as "disguised barriers to trade".
Some are describing the decision as a "classic Canadian compromise", and are lauding it for its function in stymying inter-provincial cigarette and medications smuggling, and preventing the transportation of other hazardous materials across provincial borders. Others see it as a victory for government monopolies at the expense of the man and woman in the street. Me, I'm more of that mind, and see it as a woolly and mealy-mouthed decision, designed to merely protect the status quo and not the interests of the Canadian citizens. I'm sure that Gérard Comeau is not pleased either.

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