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Comeau case: The Supreme Court should guarantee free trade between the provinces

Montreal, December 5, 2017 – The Supreme Court of Canada will hear, starting tomorrow, a historic case that could help bring down the numerous trade barriers that persist between the provinces, shows a Viewpoint published today by the MEI.

“This case is of national interest, and it is attracting a lot of attention because it could radically reform the Canadian economy,” argues Michel Kelly-Gagnon, President and CEO of the MEI and the author of the publication. “If the Court rules in favour of the free, unrestricted movement of goods between the provinces, this will not only call into question the provincial alcohol monopolies, but many other trade barriers could also disappear.”

Indeed, the highest court in the land will have to decide if Canadians have the right to transport legally purchased goods, including alcohol, from one province to another, as the New Brunswick Provincial Court ruled last year. The judge concluded then that interpreting section 121 of the Constitution Act, 1867 as permitting the free movement of goods among the provinces without barriers, as he did, “will have a resounding impact” whose consequences “could be significant.”

Recall that Gerard Comeau, a New Brunswick resident, was stopped five years ago for having “imported” too much alcohol from Quebec. Fined by the police, he contested the charge and won his case. The government of New Brunswick appealed, and the matter is now before the Supreme Court.

While the provincial governments are fighting to maintain their monopolies, Canadians are unequivocal: 89% of them think that they should be allowed to bring any legally purchased product from one province to another, according to an Ipsos poll commissioned by the MEI, the Canadian Constitution Foundation (CCF), and the Atlantic Institute for Market Studies (AIMS), which have combined forces to defend free trade within Canada.

“Canadians understand the advantages of free trade and want to fully enjoy those benefits within their own country, even if the provinces have erected all sorts of obstacles for consumers, workers, and businesses over the years,” points out Patrick Déry, Public Policy Analyst at the MEI.

The status quo costs Canadians tens of billions of dollars a year. Economists have estimated that the liberalization of interprovincial trade could add $50 billion to $130 billion to the country’s GDP, or over $2,700 per Canadian.

“Let’s hope that the Court will see the wisdom of the trial judge’s decision, which struck down this obsolete law that dates back to the era of Prohibition, and that is contrary to the idea that led to Confederation, namely that of creating one country with one common market. The Comeau case is a golden opportunity to get rid of these harmful rules that have dogged us for too long,” concludes Michel Kelly-Gagnon.

The Viewpoint entitled “The Comeau Case: The End of Provincial Trade Barriers?” is signed by Michel Kelly-Gagnon, President and CEO of the MEI, with the collaboration of Patrick Déry, Editor and Public Policy Analyst at the MEI. This publication is available on our website.

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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, Vice President, Communications and Development, MEI / Tel.: 514-273-0969 ext. 2233 / Cell.: 514-502-6757 / Email: pdery@iedm.org

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