Alberta Erecting Trade Barriers to Protect its Craft Brewers 


May be unconstitutional

By Derek James, Staff lawyer, Canadian Constitution Foundation

CALGARY, AB/ Troy Media/ – “Some animals are more equal than others,” said one of the pigs in George Orwell’s cautionary tale Animal Farm. Once the animals wrested control of the farm from the humans, the pigs in charge were soon drunk on power and became even more oppressive than previous management. The horrible irony was that the pigs profited from their favoured positions while the other animals were worse off than ever.

This same narrative seems to be playing out in Alberta’s brewing industry. On Oct. 29, it was reported that big changes are coming that will affect craft brewing in the province. Brewers from Alberta, Saskatchewan and B.C. will receive favoured treatment – beer originating from outside these provinces will be taxed 20 to 30 per cent more than beer originating from within the three provinces.

This runs counter to the interests of Alberta’s businesses and consumers. Businesses providing craft beers from elsewhere will have to pass on their increased costs to customers through higher prices. This could end the market for these products entirely. Cheaper prices draw consumers. In the end, the Alberta market for suds from other areas will dry up, and consumers will have fewer choices on shelves.

If you have a craving for Unibroue’s La Fin du Monde from Quebec, you will pay more. Beaus’ Gilgamesh Old Ale from Ontario will be more expensive. The same for a Mill Street’s Vanilla Porter from Ontario. The list could go on and on.
Alberta’s businesses want to sell you the beer you want, but are you willing to pay 20 to 30 per cent more for your favourite brew when you could settle for local? Effectively, the Alberta government is telling you “don’t drink the beer you like, drink this instead.” That’s paternalistic and against the interests of most Albertans.

So who stands to benefit from this protectionist tax? In Orwell’s world, it’s not the rest of us animals, of course, because we’ll pay – literally. It’s the pigs.

Recently, Paige MacPherson from the Canadian Taxpayers Federation broke the story that a group of Alberta craft brewers have been pushing the provincial government for years to increase taxes on their competitors. This group includes Alley Kat, Drummond and Wild Rose breweries, to name a few. The former Progressive Conservative government did not cave in to the brewers’ requests. Did the PCs know something that the New Democratic regime doesn’t?

The Constitution Act, 1867 prohibits our governments from inhibiting free trade between provinces. Sir John A. Macdonald and George Brown expected Confederation to “throw down the barriers of trade” and create a unified market in Canada. To accomplish this economic union, section 121 of the Constitution stipulates that products such as beer from “any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

The issue of inter-provincial free trade is near and dear to my heart. The Canadian Constitution Foundation took the New Brunswick government to court in the summer of 2015 to defend Gerard Comeau against that province’s unconstitutional beer laws. Like many New Brunswickers, Gerard routinely crossed into Quebec to take advantage of Quebec’s lower liquor prices. One day in 2013, after making his purchases, Gerard was caught in a police sting. The RCMP apprehended him, confiscated his beer and issued a fine for $292.50 because he had exceeded New Brunswick’s “personal exemption” import limit of 12 pints.

This New Brunswick law is an affront to the Constitution and the aspirations of the Fathers of Confederation because it functions as a barrier to free trade between provinces.
So does Alberta’s new protectionist tax scheme.
Alberta is not only acting contrary to the interests of consumers, it may be erecting an unconstitutional barrier to free trade.

The Constitution entitles us to enjoy beer without borders.

Derek James From is a staff lawyer with the Canadian Constitution Foundation in Calgary.

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