Lexpert Magazine

88 LEXPERT MAGAZINE | NOVEMBER/DECEMBER 2016 ment is responsible under the Constitution for internal and international trade, I don't see how you can have something effective without the feds at the table." History in the unmaking When the founders of Confederation gath- ered to forge this country, a prime objective was to create a nation where goods, services and labour would flow as easily as water from shore to shore. at notion was eventually written into s. 121 of the Constitution Act, 1867: "All Articles of the Growth, Produce, or Manu- facture of any one of the Provinces shall, from and aer the Union, be admitted free into each of the other Provinces." e founders also made it clear in s. 91(2) of the British North America Act, 1867 that Can- ada's federal government is responsible for the "Regulation of Trade and Commerce." e federal leaders, however, who came to power aer Confederation have failed to live up to the domestic free-trade dream, argues Brian Crowley, Managing Director of the Macdonald-Laurier Institute (MLI), an Ottawa-based public-policy think tank. Crowley says past federal governments have all neglected their constitutional pre- rogative to grab the reins of trade and com- merce away from the provinces. "I am gobsmacked that successive fed governments have just waved this away." at, despite the fact that "the Constitu- tion is signalling in every way it possibly can that the intention was to create a na- tional, unified economic base, and that Ot- tawa is the guardian of that base." As such, he adds, the feds have failed to defend the rights of Canadians "to carry on their business and exercise their profession and sell their goods and services in every part of the country." Corporate trade timidity For those companies — and the lawyers working on their behalf — who believe trade barriers infringe their businesses and even their constitutional rights, fighting back is tough. "e dispute-settlement sys- tem with the Agreement on Internal Trade is toothless," says LaFortune. Companies impacted by another prov- ince's trade barriers, whether visible tariffs or more subtle policy obstructions, have no standing under the AIT to complain. Only signatories — the provinces and territories — can do that. "at makes it far more difficult for anyone to make use of [the Agreement on Interprovincial Trade]," continues LaFor- tune. "Because the first thing you have to do as a company, if you are being injured by a measure in another province, is go to your own province and convince them there's enough of an issue to take it to the dispute- settlement process under the AIT. en, if you are successful, the most you can get is a report that says Province B was bad and we think they should change. at's it!" Hardly worth it for an aggrieved com- pany to kick its internal or external counsel into high gear for that kind of cost/reward scenario. And other hazards lurk for com- panies wanting to challenge interprovin- cial trade barriers. Shawn Moen, a former criminal and commercial lawyer who also holds a mas- ter's degree in international trade, is a sec- retary of the Saskatchewan Cra Brewers Association (SCBA). He's also CEO and co-owner of 9 Mile Legacy Brewing Co. in Saskatoon. Liquor boards across the coun- try determine what alcoholic products get listed in their specific province. Get delist- ed says Moen — perhaps for expressing bit- terness about a province's rules that impede external competition — and a brewer, espe- cially a small one, could go out of business. at delisting threat, says Moen, "can oper- ate as protectionist measure too, depending on how they are administered." Constitutional challenge Should the CFTA prove as feeble as skep- tics predict, it may come back to the Co- meau case to get the Supreme Court to address the contemporary constitutional issues foaming up from interprovincial trade policies and rules. Comeau was caught by New Brunswick RCMP in a sting operation designed to nab New Brunswickers buying beer in Québec, where it's substantially cheaper, who were bringing it back to New Brunswick in ex- cess of its Liquor Control Act. He faced a $292.50 fine. In finding in favour of Comeau, Judge Ronald LeBlanc found a number of Su- preme Court precedents regarding trade laws — including the seminal 1921 case Gold Seal Ltd. v. Alberta — were wrongly decided. Gold Seal essentially held that s. 121 only applied where a tariff, customs duty or like charge was imposed at a pro- vincial boundary on incoming goods. New Brunswick's liquor limit was not such a customs duty — it only banned individu- als from bringing alcohol into the province save for a minor specified amount. Judge LeBlanc accepted defence evi- dence that he should ignore stare decisis and the Supreme Court's findings in the Gold Seal case. He wrote, "I believe that the nar- row and strict interpretation placed upon section 121 in the Gold Seal case was un- warranted and unfounded." He ruled, in addition, that New Bruns- wick's restrictions under s. 134 for bringing alcohol into the province for personal use violated constitutional free-trade provi- sions under s. 121 and therefore are of no | IN-HOUSE ADVISOR: INTERPROVINCIAL TRADE | MICHAEL ATKINSON > CANADIAN CONSTRUCTION ASSOCIATION The provinces have no constitutional right to demand a seat at the table with respect to interprovincial trade. That is the solid jurisdiction of the federal government under the Constitution. … The CCA has a long-standing policy that we are opposed to preferential treatment, because in the long run we believe it is detrimental to local businesses.

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