Resolving Canada's conflicted relationship with margarine

Canada's two margarine policy comes to an end as Quebec decides to repeal a law forcing margarine producers to colour their product white so consumers won't confuse it with butter.

Quebec is distinct no more — when it comes to margarine. The province's cabinet agreed in late June 2008 that the time was right to change a 21-year-old law that forced margarine producers to colour their product white if they wanted to sell their wares in Quebec.

The move came a little more than three years after the Supreme Court of Canada ruled that the Quebec regulations were reasonable.

Quebec was the last jurisdiction in North America to force margarine producers to ensure that their product could not be confused with butter — at least when it came to colour.

Even Ontario repealed its Oleomargarine Act back in 1995. Until then, it was technically illegal for companies to make or sell margarine that was coloured yellow, making it look suspiciously like butter. With that law on the books, no one had ever been charged with trafficking in butter-coloured margarine.

In Quebec, it was a different story. The dairy lobby made sure the law was enforced and even small batches of margarine in tiny grocery stores would be seized.

The battle over butter-coloured margarine was a long one. Until 1948, it was illegal to sell margarine of any colour in Canada. That year, the Supreme Court lifted a ban that had been in place since 1886, the same year the U.S. imposed a heavy tax on the non-dairy spread.

As part of the First World War effort, Canada temporarily lifted its ban on margarine from 1917 to 1923 because of dairy shortages during the war.

When the Supreme Court removed the ban permanently, Newfoundland, still a British colony, was churning out bootleg margarine for the Canadian market at about half the price of butter.

The Newfoundland Butter Company was established in 1925 and, despite the name, produced margarine exclusively. Food giant Unilever bought the company in 1937. Unilever had been producing margarine in Europe since 1878, when it was originally made from whale oil.

When Newfoundland joined Canada in 1949, the Newfoundland Butter Company earned a special mention in the Terms of Union. It would become Canada's first margarine manufacturer, and the name changed to the Newfoundland Margarine Company shortly afterwards. (Unilever closed the plant in March 2004 and moved the operation to Ontario.)

Margarine debate handed to provinces

On Oct. 16, 1950, the courts ruled that margarine laws were a provincial jurisdiction — and not the domain of the federal government.

Provincial governments quickly moved to protect consumers who might become confused between margarine and butter. They regulated its colour. But the regulations varied from province to province.

In some provinces, margarine had to be bright yellow. In others, it was sold colourless. Some margarines were sold in a plastic sack that came with a tab. Pressing the tab released a yellow dye into the margarine. Squishing the sack for 20 minutes or so would mix the dye into the margarine.

Dairy farmers were incensed when the Supreme Court lifted the margarine ban, arguing it would cause butter sales to plummet. That would lead farmers to cut back production, possibly causing a milk shortage.

Quebec's strong dairy lobby was able to persuade the government to protect the population from margarine until 1961. But margarine did manage to make its way to morning toast in the province. The dairy lobby, though, was determined to make sure that Quebecers would not be confused and buy margarine if they were really after butter.

The dairy lobby persuaded Premier Robert Bourassa to ban coloured margarine in 1987. At the time, most other provinces had either dropped their prohibition of butter-coloured margarine or had stopped enforcing laws against it.

Margarine companies fight back

Big Margarine went after Quebec's ban on coloured margarine. Unilever challenged the law on the basis that it violated the North American Free Trade Agreement and World Trade Organization rules. Unilever claimed that being forced to make two types of margarine — colourless for Quebec and coloured for the rest of Canada — meant a million-dollar hit for the company's bottom line.

In 1997, Unilever declared war on the ban. In November, the company imported 480 containers of yellow margarine it had manufactured in the U.S. and delivered them to a retail distributor in Quebec.

On Nov. 24, 1997, the government responded. It sent in inspectors from the Ministère de l'Agriculture, des Pêcheries et de l'Alimentation. They seized 384 containers of the offending product. Outraged, Unilever went to Superior Court to have the seizures quashed. It also asked the court to declare the law banning coloured margarine "null, unconstitutional, invalid, inoperable, unreasonable and contrary to Canadian federalism."

The court mulled over the case and ruled in 1999 that the law was valid, although the judge did concede that the ban violates interprovincial trade rules.

The Quebec Court of Appeal upheld the ruling in 2003. A year later the Supreme Court of Canada agreed to hear the butter battle.

On March 17, 2005 Unilever lawyer Gerald Tremblay argued that Quebec's ban on coloured margarine was unreasonable, contrary to the rules of federalism, violates charter guarantees of freedom of expression, and is contrary to North American and world trade rules.

The justices let Tremblay go on for an hour. They refused to hear arguments from lawyers for the government of Quebec, and Quebec Dairy Producers.

Quebec's law stands, they ruled, until the province decides to change it.

The province's dairy lobby says the law's not needed anymore and it has no plans to fight the government's decision to allow Quebecers access to yellow margarine. Quebecers, a dairy industry spokesman suggested, won't switch to margarine just because of colour.