Comeau & Steam Whistle: Update + Implications

This is an “early fall” update on the legal issues arising from the Supreme Court of Canada decision in R. v. Comeau which was handed down in April of this year.

The full decision is located here: R. v. Comeau (2018 SCC 15). As is widely known, the case dealt with an individual (Gerard Comeau) who drove to Quebec from New Brunswick, purchased some beer and spirits, and then brought them back to New Brunswick. After being stopped by the RCMP, he was charged with a provincial offence since the amount of liquor that he ‘imported’ from Quebec exceeded the amounts permissible under the applicable provincial law. Mr. Comeau’s lawyers argued that the provincial laws were unconstitutional because they violated a section of the Constitution that relates to free trade between the provinces. The Court rejected this argument and upheld the ability of a provincial government to place legal restrictions on the inter-provincial trade in alcohol (which could also include DTC shipments) so long as the primary purpose of the law is not to restrict trade. Nevertheless, the Court also stated that such restrictions may not be permissible if they discriminate as between “in-province” producers and “out of province” producers.

This latter issue could end up being important in respect of provincial policies or laws that treat wineries (or other liquor manufacturers) from one province differently than those from other provinces. A summer decision (Steam Whistle Brewing Inc v Alberta Gaming and Liquor Commission, 2018 ABQB 476) in Alberta applied the reasoning in Comeau and found that preferential markups and grant programs for beer in Alberta were unconstitutional since they provided beneficial treatment to local in-province producers over those from out-of-province producers (i.e. an impermissible ‘trade restriction’). This decision, if upheld, means that the Alberta government cannot impose a different markup regime on producers from another province if it provides better treatment for its local producers. The Alberta government has indicated that it will appeal this decision. 

If the trial level decision is found to be correct then the end effect could be that a provincial government would have to “level up or level down” in regards to markup treatment. In other words, if a government provides lower markups, exemptions or grants to local producers, then it would have to either extend those benefits to all Canadian producers (regardless of provincial origin) or eliminate them entirely. Such a result would have the potential to affect markup policies in a number of provinces.

BC Liquor Policy Report Released

The BC Government has now released the report of the Business Technical Advisory Panel: LCLB Liquor Panel. The Branch's page includes a PDF copy of the report as well as information releases and the written submissions that were made to the Panel from various industry stakeholders. The report discusses various issues related to the BC liquor industry and makes 24 recommendations. The Panel was chaired by myself and included representatives from the BC Craft Brewers Guild, Canada's National Brewers, Craft Distillers Guild, Alliance of Beverage Licensees, BC Restaurant and Foodservices Association, Restaurants Canada, BC Wine Institute and the Rural Agency Store Advisory Society.

Comeau Decision Released by SCC

The Supreme Court of Canada released its judgment in R. v. Comeau (the interprovincial alcohol transport case) today. The court reversed the trial level decision from New Brunswick which had found that a provincial law restricting the possession of alcohol from outside the province was unconstitutional. The Supreme Court disagreed with the trial judge's approach, finding that the provincial restriction was valid. The full Comeau decision is here

Ruling on Interprovincial Alcohol Case (Comeau) to be Made Thursday

The Supreme Court of Canada has announced that its judgment in the interprovincial alcohol transport case (Comeau) will be delivered this Thursday, April 19th at 945 am Eastern time (645 Pacific). Details here. This ruling deals with the issue of whether or not a province has the legislative power to prevent or restrict alcohol purchases from another province. 

Comeau Case - Appeal to be Heard by SCC

The Supreme Court of Canada will hear an appeal of the decision in R. v. Comeau (the inter-provincial alcohol transport case) on December 6th and 7th. The hearings are scheduled for 930 am (Eastern - 630 am Pacific) on each day. The SCC website contains all of the factums (arguments) that have been filed for the appeal. In addition, the site will host a live webcast of the hearings on each day.