British Columbia

Booze-makers hope top court frees more than beer

B.C.’s alcohol makers are keen to see Canada’s top court open up interprovincial trade by ruling on the side of the #freethebeer fighter.

B.C. alcohol already trickles over border tax-free, say distillers and vintners

Legal experts say Gerard Comeau's case thwarts the ability of provincial governments to adopt legislation for alcohol, tobacco and marijuana, including controlling the retail distribution systems for such products. (CBC)

Many B.C. alcohol makers hope to see Canada's top court open up interprovincial trade by ruling on the side of a New Brunswick man whose fight to bring home cheap booze from Quebec could change the country's internal trade system.

Gerard Comeau fought a $292.50 fine he received after trying to drive from Quebec to New Brunswick with a trunk full of beer and liquor in 2012.

The province of New Brunswick argues that overturning the fine Comeau received for bringing alcohol across a provincial boundary would mean "an end to Canadian federalism as it was originally conceived."

If the court sides with Comeau, the case could threaten trade barriers long in place for a myriad of industries from agriculture to e-commerce.

The retiree was caught in an RCMP sting with more than a dozen cases of beer and three bottles of liquor.

That haul put him over the limit of 12 pints (about 18 cans or bottles).

Case threatens stats quo

The case being heard in Ottawa this week could alter a century-old system of provincial controls over tobacco and liquor — if Comeau wins.

For example, depending on the province, a person transporting alcohol across a provincial border — if deemed more than the personal limits allow — is charged provincial tax and a markup.

Comeau's legal team argues that's unconstitutional because it ignores the spirit of free trade outlined in Canada's Constitution Act of 1867. Their challenge focuses on a case from 1921 that underpins the complex system of tariffs and markups that's grown up since.

Gerard Comeau stayed at home in Tracadie, N.B. rather than attend the Supreme Court hearing in Ottawa. (Serge Bouchard/Radio-Canada)

In 2016, a New Brunswick judge agreed Comeau's fine was unconstitutional.

The province appealed.

That's when the beer lover garnered national attention, with the Conservative party pushing a #FreeTheBeer campaign, urging people to pressure their MPs to loosen trade barriers.

But justices on the nine-member panel fear a ruling in Comeau's favour could cause confusion because of the complex system that relies on the legal precedents his lawyers are challenging.

Booze lobby

Meanwhile, alcohol manufacturers are cheering Comeau. Some even joined his fight.

B.C.'s alcohol producers say a Comeau win could expand markets.

David Brimacombe owns Wayward Distillation House in the Comox Valley, and sells online to Canadian customers.

He says lots of suppliers are already skirting Ontario's provincial mark-ups this way.

Brimacombe said authorities turn a blind eye to alcohol in the mail.

"It is 400 times more profitable for me to ship directly," he said.

The gin is in the mail

"If I got made an example of, as someone who ships Christmas booze, it wouldn't be the worst thing," he said.

That's because online sales are small. But if Comeau's case prevails, he and other suppliers might get access to out-of-province liquor store shelves — without the prohibitive mark ups.

Right now a bottle of Wayward gin sells in B.C. for $55.

That same bottle for sale in Alberta — because of markups — costs $79.

In Ontario, he says mark-ups are even higher.

On a bottle of gin, the duties, which factor in alcohol percentage, type, cost and quantity, total $46.16, which almost doubles the price.

B.C. has allowed personal importation of wine and liquor markup-free since 2012. 

Watch and wait

So many sectors are hoping Comeau wins because they say their profits could increase if they gain access to more markets without having to pay taxes and markups.

"Certainly a decision that favours Comeau will have implications on many sectors," said Ken Beattie, executive director of the B.C. Craft Brewers Guild.

Wine makers are so keen they joined Comeau's case. There are 11 intervenors along with beer giants and even a marijuana advocacy group.

Chief Supreme Court Justice Beverley McLachlin questioned why the court should make the change Gerard Comeau's lawyers are seeking and what gives the court the power to do so. (CBC)

Many B.C.'s wine makers want more interprovincial trade, and already ship high-end wine across borders.

"This is nothing new. The floodgates aren't going to open," said Miles Prodan, president of the British Columbia Wine Institute. Prodan wants to break down the borders when it comes to booze sales.

"We're not afraid of the competition," he said.

'Grow the pie'

Sandra Oldfield, founder of Tinhorn Creek Winery in Oliver B.C, sees an opportunity to expand the Canadian market.

"We are looking to grow the pie," said Oldfield who believes cross-border sales would increase wine  "culture." 

Brimacombe also believes letting people get a taste of alcohol from other provinces would help bond Canadians.

"Think of Molson Canadian's 'I am Canadian' campaign," he said.

 "The consumer — the people — loved it."

If Gerard Comeau wins his anti-tariff case at the Supreme Court level, it could affect the flow of goods between provinces, including wine, beer and more. (Yvette Brend/CBC)