Free the Beer, Free the Trade

Understanding Interprovincial Trade Barriers in Canada

CBC Radio recently featured a report on the Supreme Court of Canada case known as R. v. Comeau, also referred to as the “Free the Beer” case. The case revolves around Gerard Comeau, who unwittingly violated interprovincial trade barriers when he brought back more beer than allowed under provincial liquor laws.

While interprovincial trade barriers may seem minor compared to tariffs, they play a significant role as countries aim to diversify trade relationships. In Canada, there are no customs checkpoints between provinces, and tariffs between provinces are prohibited by the Canadian constitution.

The IMF categorizes barriers to internal trade in Canada into four categories: natural, prohibitive, technical, and regulatory and administrative barriers. These barriers impact various sectors such as labor mobility, business regulation, transportation, and markets for goods like alcohol, drugs, and agricultural products, as well as government procurement.

The Supreme Court’s ruling in the Comeau case highlighted that while provinces have the power to regulate and control alcohol within their borders, they cannot impose tariffs or bans on goods from other provinces to promote local purchasing. This decision reaffirmed the constitutional rights of provinces while acknowledging the incidental impact on interprovincial trade.

Provinces retain the authority to set their own safety and technical standards, which can hinder the seamless movement of goods and services between jurisdictions. The challenge lies in balancing the desire for free trade with decentralized power, as seen in the ongoing efforts to eliminate interprovincial trade barriers in Canada.

Despite the economic benefits of freer trade, provinces face complexities in dismantling barriers due to factors like linguistic concerns, supply management systems, and voter preferences. Negotiating between liberal values of free trade and decentralized power is crucial in advancing trade liberalization while addressing the real trade-offs involved.

Overall, the case of Gerard Comeau sheds light on the intricate dynamics of interprovincial trade barriers in Canada and the need for a nuanced approach to promoting freer trade within the country.