Provincial trade barriers hard to dislodge

EDITORIAL: WHAT OTHERS THINK

The Supreme Court of Canada has been roundly criticized since unanimously ruling last week that a New Brunswick man didn’t have the right to buy cheap booze in bulk in Quebec, then bring it back across the provincial border.

Critics charged the Supreme Court’s decision has entrenched backward provincial protectionism and its high cost to the Canadian economy.

Reducing provincial trade barriers is an important, even a vital goal.

But the high court can’t be blamed for correctly pointing out that nearly a century’s worth of legal precedence concerning provinces’ ability to restrict trade cannot be overturned based on a single historian’s contrary opinion about the meaning of a key clause in the Constitution.

Simply put, Gerard Comeau’s cases of beer had no case.

Section 121 of the Constitution, which states that Canadian goods “shall be admitted free” into every province, has never been seen as a guarantee of absolute interprovincial free trade, the court said.

Instead, the court said, the section has long been understood to mean that while provinces cannot pass legislation specifically meant to restrict interprovincial trade, they can certainly enact laws for other purposes that may inadvertently also suppress the flow of goods and services across internal borders.

In this case, the Supreme Court said, New Brunswick’s liquor laws, aimed at managing supplies within its borders, may have the consequence of limiting interprovincial movement of some goods, but that’s not its main purpose, so it’s not unconstitutional.

The bottom line? Canada’s complicated constitutional compromise of 1867, which set up our own, unique form of federalism — warts and all — can’t be simply undone in a court case.

To eliminate interprovincial trade barriers, there are two avenues. One, someone could mount a far stronger legal challenge, either piecemeal by opposing directly protectionist laws or by providing incontestable evidence that the long-accepted interpretation of section 121 is incorrect.

Two, provincial and territorial governments could themselves decide it’s in their collective selfinterest to reduce internal trade impediments and so strengthen the national economy as a whole.

And, in fact, 12 months ago, Canada’s provinces and territories, along with Ottawa — after years of talks — signed onto the Canadian Free Trade Agreement, a new deal meant to gradually reduce, if not eliminate, those internal barriers to trade.

The high court’s ruling suggests the latter route is the more promising one.

Most Canadians — and Canadian politicians, for that matter — say they hate the provincial trade barriers that cost this country’s economy billions every year.

Despite politicians’ rhetoric, however, those obstacles stubbornly stay in place. That’s because its hard to dislodge the entrenched interests that benefit from such barriers.

But the Supreme Court’s ruling means there’s no shortcut to free interprovincial trade.

An editorial from the Halifax Chronicle Herald (distributed by The Canadian Press)