Canadian Manufacturing

Supreme Court beer ruling could apply to Alberta-B.C. pipeline war, experts say

by Dan Healing, The Canadian Press   

Canadian Manufacturing
Regulation Food & Beverage Oil & Gas Public Sector

A newly minted decision from Canada's highest court could signal that Alberta's move to punish B.C. for its opposition to the Trans Mountain project, by restricting oil shipments to the province, is unconstitutional

CALGARY—A Supreme Court of Canada ruling on bringing beer from Quebec into New Brunswick has implications for the trade war between Alberta and B.C. over the Trans Mountain pipeline expansion, experts said Thursday.

The court seemed to be addressing the issue in its decision when it noted that while some trade barriers can be allowed in some circumstances, those designed to punish another province or to protect a local industry would not be permissible, they said.

The decision protects provincial liquor monopolies by finding that New Brunswick had the right to fine Gerard Comeau for buying alcohol in Quebec and transporting it over the border, said Howard Anglin, executive director of the Canadian Constitution Foundation.

Related: Supreme Court upholds law in cross border beer case, averting trade shakeup


But the part of its decision that talks about punitive trade barriers could likely be interpreted to apply to Alberta’s recent threat to restrict oil and fuel shipments to B.C. and its previous short-lived restriction on buying B.C. wine, he said, both designed to pressure B.C. into dropping its opposition to the pipeline.

“It certainly would limit the short-lived wine ban that Alberta instituted,” said Anglin. “It could potentially limit its ability to restrict the flow of oil. It’s certainly possible.”

Language in the decision suggests the court was thinking about the Trans Mountain dispute, said Shea Coulson, a lawyer who represented five B.C. wineries as interveners in the Comeau case.

“I think the judgement goes directly to those sorts of issues,” he said in an interview. “And they’re probably unconstitutional. That’s my view.”

But Trevor Tombe, an associate professor of economics at the University of Calgary, disagreed.

“The language in the ruling is quite broad and if there’s some other public policy objective that a provincial government has in mind and restricting trade is really just an incidental outcome, then it’s OK,” he said.

He pointed out Alberta didn’t put a tariff on or prohibit imports of B.C. wine, it simply told the provincial monopoly buyer to stop buying. In the case of limiting exports of refined fuel to B.C., he said, the government could argue it is simply pursuing a policy of enhancing value by relieving a glut of unprocessed oil from the oilsands for the good of its citizens.

He said the ruling is quite clear, however, in prohibiting a direct tariff on Alberta imports of B.C. products, as has been suggested by some observers of the dispute.

Coulson said the Supreme Court’s interpretation has implications for many trade laws, including those that permit direct shipping of wine to consumers in Ontario but not in B.C.

Anglin agreed, noting the decision implies that it will be acceptable to ban importation of recreational marijuana from other provinces when it becomes legal later this year.

“If the province can justify restricting the importation of marijuana from another province on a provincial ground like health or safety, it seems like they will be able to,” he said.

Representatives from the beer, wine and restaurant industries said Thursday they were disappointed but not surprised by the ruling.

They said their hopes now rest on a report expected this summer from the alcoholic beverages working group struck under the Canadian Free Trade Agreement signed last year by federal, provincial and territorial governments.

“We’re disappointed in the decision because it means our customers will not have access to some of the unique products that they now crave,” said Luc Erjavec, Atlantic vice-president for Restaurants Canada.

“Every province across this country brews incredible craft beers, might have incredible wines, craft distilleries and there’s no way a liquor monopoly in a province can carry all of the brands.”

—With a file from Beth Leighton in Vancouver.


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