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Interprovincial trade in alcohol: The Supreme Court could eliminate barriers

Montreal, May 4, 2017 – The highest court in the land has just agreed to hear the case of Gérard Comeau, a New Brunswick resident accused of having illegally “imported” alcohol from Quebec in 2012. It is a decision that could eventually lead to the elimination of trade barriers between the provinces.

Recall that in April of last year, a provincial court declared that the New Brunswick law was unconstitutional because it prevented unfettered trade from one province to another, thereby violating Section 121 of the Canadian Constitution.

“It’s excellent news that the Supreme Court has agreed to rule on interprovincial trade in alcohol,” says Mathieu Bédard, Economist at the MEI. “It is high time to respect the Constitution, which states clearly that no province has the right to prevent the purchase, transport, or shipping of goods from another province.”

If the Supreme Court interprets the Constitution as New Brunswick’s provincial court did, this will lead to greater liberalization of trade, which would be good both for consumers and for Canadian businesses.

Quebec will certainly be following this case very closely, since a decision in favour of eliminating trade barriers between the provinces would present a clear challenge to the SAQ’s monopoly.

“The Quebec government is already under a lot of pressure to open up the market in order to allow consumers to have access to more products at better prices. It’s not a coincidence that the SAQ has reduced its prices three times in recent months,” adds Mr. Bédard.

Furthermore, a recent Leger poll carried out for the MEI revealed that 84% of Quebecers agree that they should be able to buy wine in Canada, or elsewhere, without having to go through the SAQ.

“The results of this poll are unequivocal, and should give political decision-makers something to chew on. There is a large consensus on the liberalization option, and it is by far the most realistic scenario. Let’s hope the Supreme Court puts an end to the debate by guaranteeing millions of consumers and businesses the benefits of free trade,” concludes Michel Kelly-Gagnon, President and CEO of the MEI.

Indeed, a recent study published in the Canadian Journal of Economics estimates the potential productivity gains of barrier-free interprovincial trade at $100 billion, or the equivalent of $2,700 per Canadian.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

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Interview requests: Pascale Déry, Senior Advisor, Communications, Department of Current Affairs, MEI / Tel.: 514-273-0969 ext. 2233 / Cell.: 514-502-6757 / Email: pdery@iedm.org

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