Internal trade barriers in Canada tell a story of our country’s struggle to pursue an enduring singleness

On a seasonably warm October Saturday in 2012, Gerard Comeau drove his car across the New Brunswick border into Quebec. His mission: take advantage of the relatively cheaper beer and wine prices on the other side of the bridge that separates Point-à-la-Croix from Campbelltown. The 62-year-old was a retiree living in Tracadie-Sheila, a predominantly francophone rural New Brunswick town on the Atlantic coast with a population of approximately 5,000. He drove the two hours northeast from his home to purchase beverages that were, in some cases, half the sticker price found at his local liquor stores. Mr. Comeau made this trip two or three times a year, stocking up on enough beer, wine, and liquor to last him a couple of months. New Brunswick winters are cold; the summers relatively short. Unfortunately for Mr. Comeau, this particular trip ended differently than his others: with a shakedown. Upon re-entry from Quebec, RCMP officers tailed his car as though he were a major crimes suspect before apprehending him and charging him under New Brunswick’s Liquor Control Act. Seventeen other New Brunswickers suffered the same fate that day. Later, when what happened to Mr. Comeau became more widely known, The Globe and Mail called it “likely the lamest police sting operation in Canadian history.” Indeed, the hapless New Brunswicker was guilty of a distinctly Canadian offence: the possession of interprovincial alcohol quantities in excess of the legal provincial limit. On this fateful fall Saturday, the RCMP seized Mr. Comeau’s entire haul of 354 bottles of beer and three bottles of liquor and issued him a fine for $292.50. Mr. Comeau went home with a dent in his wallet and not a single beverage to help him wind down from his run-in with the law. He was outraged. Within a matter of weeks, he’d found himself a willing lawyer and launched a case before the New Brunswick Provincial Court, calling into question the constitutionality of New Brunswick’s law. His case would end up before the Supreme Court of Canada. By launching his legal claim, Mr. Comeau earned his place in Canada’s internal trade story. It’s one that begins when the nation’s provinces were but fledgling colonies and will continue for as long as the country remains a confederation. The tale of internal trade features acrimonious interprovincial trade wars, captivating courtroom dramas, and a cast of passionate characters, all of which play a role in shaping the nature of Canadian domestic interchange. In tracing the episodes across the span of the country’s history it becomes clear that Mr. Comeau’s appeal before the Supreme Court resulted in a mark of progress and achievement for the Canadian project of domestic trade liberalization. Ryan Manucha. Handout photograph But if you’re a Toronto beer drinker who loves Labatt’s or a Kelowna fruit enthusiast who suffers no shortage of fresh summer berries, or a Charlottetown student surviving on potatoes, why do interprovincial trade dust-ups matter to you? The simple answer: the world is changing. The COVID-19 pandemic and climate emergency have ruptured food supply chains, encouraging a renewed interest in locally sourced goods. These forces are compounded with never-ending cycles of international tariff wars and the desperate ironies of waiting for international supplies of personal protective equipment while Canadian factories capable of producing them lay idle. It all points toward the need for greater economic interdependence amongst Canadians, ensuring food security and the availability of life’s essentials regardless of what happens outside of our borders. The question is, how do we get there? Canada is no stranger to historically robust internal free trade. Indeed, even before the European conquest, which superimposed imperial fictions over Indigenous lands, peoples living in the region encompassing Mr. Comeau’s present-day Tracadie-Sheila practised the tenets of liberalized trade. The Mi’kmaw people inhabited Mi’kma’ki, presently the regions falling within Nova Scotia, Prince Edward Island, northern New Brunswick, and the Gaspé Peninsula. Mi’kma’ki was divided into seven political districts, each of which was administered independently by district chiefs and councils. Kespekewaq, one of these seven, contains the several scenes of Mr. Comeau’s crime in both New Brunswick and Quebec. The Mi’kmaw people freely crossed internal political boundaries pursuing seal and otters in the winter months, and fishing smelt and herring in warmer times. The spatial political schema of the Mi’kmaw facilitated what modern trade-policy scholars describe as “free trade.” Defined concisely: where governments “treat strangers as guests rather than trespassers, at least affording them the treatment afforded to members of their own household.” We expect Canada Border Services Agency to limit the number of Bordeaux bottles that can be swaddled in a suitcase after a trip to France, as restrictions are a common feature of the international trading system. Countries routinely engage in trade wars and erect barriers to protect their local industries from foreign competition. However, all Canadians from Vancouverites to Haligonians have marched behind the same flag during the Olympics and donned the same uniform when fighting in armed conflict. They came to one another’s aid in the dire early periods of the COVID-19 pandemic. Why hasn’t national unity driven us toward a collaborative economic system, in which goods and services can flow freely and unimpeded across provincial borders? By one estimate, domestic trade barriers amount to a seven per cent tariff on goods crossing internal borders. Heady provincialism restrains our economy, as well as our sense of citizenship. However, as the tale of internal trade reveals, there are competing interests at play, stemming from Canada’s quintessential heterogeneity, which might make trade obstacles such as New Brunswick’s restrictive liquor laws palatable. Canada’s story is one of diversity across many dimensions: Indigenous peoples who occupied this territory for thousands of years before the arrival of the white settlers; the descendants of enslaved people who arrived with white colonists; as well as immigrants and refugees from all over the world seeking protection and prosperity. Like our inhabitants, our geography is varied, with the temperate climate of the west coast, the harsh and unforgiving chill of the perma-frosted north, the fertile plains of the prairies, and the rugged edges of the Canadian Shield. And our natural forces helped to shape the nation’s economic diversity. For instance, the wooded British Columbian interior gave rise to a globally dominant forestry industry, while resource-rich Alberta has depended on its oil and gas sector for success, and the collapse of the cod stock in Atlantic Canada illustrated that region’s reliance on its fisheries. Canada’s internal trade story is marked by that same theme of diversity. Keeping the country united requires the accommodation of such incredible differences, producing results such as the Supreme Court’s decision to uphold Mr. Comeau’s punitive fine that protects New Brunswick’s interprovincial alcohol import limitations. Internal trade barriers in Canada tell a story of our country’s struggle to pursue an enduring singleness, despite a staggering variety in climate, topography, demography, and economics. They are in some cases a by-product of the Canadian project, which brings together a diverse people spread across the world’s second-largest country by landmass. Unsurprisingly, a system of free trade for a nation such as Canada must be flexible in order for the country to maintain its cohesion. We must accept our national diversity, and this means allowing for some limitations to free interchange. However, this does not mean that we should abandon the pursuit of liberalized internal interchange wholesale. It just requires a pliable approach, and a willingness to accommodate. To fully comprehend how cases such as Mr. Comeau’s reverberate through Canada’s history and economy, we need to time travel through the tales of many products—everything from turkeys and potash, to margarine and duvets, and, of course, to booze—where an intergenerational battle pits national and local ambitions against one another. It also informs us of the sacrifices and trade-offs that Canadians would have to make to achieve truly free internal trade. And in an environment of rapidly shifting international power balances, calls for dismantling old ways of doing business, and privileging endless economic growth, it might be time to truly confront those sacrifices. Any future hopes of Canada remaining as a single confederation rest on the ability of its provinces and territories to regulate in light of local concerns. Without this authority, provinces would rebel, raising the spectre of a formerly united Canada balkanized into a plethora of smaller states. Instead, a system in which Canada’s subnational governments have latitude to govern is a ripe breeding ground for barriers to economic trade and national unity. Ironically, the desire for Canada’s thirteen provinces and territories to stay together within a single federation is what gives rise to internal trade barriers. The COVID-19 pandemic has shown the importance of internal trade. Fickle foreign trading partners, border restrictions, and ascendant global isolationism invite Canadians to look to each other for enduring economic prosperity. This is not, however, an unfamiliar lesson in the Canadian internal trade story. As this book will explore, Canadian internal trade has been deeply influenced by the actions of other countries at various points in history, and the aftermath of the pandemic will prove to be no different. By examining the past trajectory of internal trade, it may even be possible to guess at its future. Why did you write the book? "Full of gastronomic anticipation, I recently plucked a prepackaged ribeye from the butcher’s shelf. Out of habit I glanced at the cut’s price, but instead of fixating on the dollar amount, all I could register was the label one line above: 'Raised in Canada, processed and packaged in the United States.' Immediately I recalled the countless congressional hearings, policy papers and briefings from my time on the agricultural trade file at the Canadian embassy in Washington, D.C. During the 2010s, the U.S. federal law mandating this very label had cost the Canadian cattle and hog industry nearly $1-billion in foregone trade every year. It had brought cross-border flows in livestock to a halt and had devastated the industry’s employment rates on the northern side of the border. In my early years, this one seemingly-pedantic issue showed me the incredible significance of trade law. "Additional experiences at the nexus of law and economics at the Ontario Securities Commission and in legal private practice, provided me first-hand appreciation of the inextricable link between the rules-based orders that govern trade and the economic well-being of our societies. "Through the course of my research and work, I quickly became more fascinated by interprovincial trade law and policy. I was particularly sparked by questions about Canadian economic growth and the future of the economic union. Domestic interchange has the additional rich complexity of Canadian constitutional law that overlays the nation’s ecosystem of interprovincial trade agreements that have sprung up over the last quarter-century (the CFTA and the NWPTA just to name two)." Excerpt from Booze, Cigarettes, and Constitutional Dust-Ups: Canada's Quest for Interprovincial Free Trade, by Ryan Manucha, published by McGill-Queen's University Press. Q&A with Ryan Manucha Why is this book important and who should read it? "Canada’s rules for internal trade are of significance to every single Canadian. They affect what makes it to the nation’s supermarket shelves and hardware stores, and cause fluctuations in the prices of life’s essentials—milk, eggs or beer—that people purchase every day. "The COVID pandemic showed Canada’s vulnerability to global supply chains and to the fickleness of foreign trading partners; in a post-pandemic world, Canada’s economic union will take on renewed significance as we continue to observe a rise in nationalism and protectionism across the globe. "Never before has the complete story of Canadian interprovincial trade been assembled inside of a single publication, and in such accessible fashion at that. The story of Canadian interprovincial trade is otherwise buried in the nation’s jurisprudence, legal journals, economic research papers, think-tank reports and specialty books intended for policy makers. This book pulls together and makes accessible a subject relevant to all Canadians. "Canadians routinely decry interprovincial trade restrictions, especially when all Canadians don the same uniform in times of war and march behind the same flag at the Olympics. Many also live in close proximity to neighbouring provinces and face restrictions on their cross-border activities. These Canadians want to know both why they face interprovincial trade restrictions and what is being done about them, and this book provides answers."

Internal trade barriers in Canada tell a story of our country’s struggle to pursue an enduring singleness

Ryan Manucha's Booze, Cigarettes, and Constitutional Dust-Ups: Canada’s Quest for Interprovincial Free Trade is one of five finalists for this year's Donner Prize. The following is an excerpt.

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Internal trade barriers in Canada tell a story of our country’s struggle to pursue an enduring singleness

Ryan Manucha's Booze, Cigarettes, and Constitutional Dust-Ups: Canada’s Quest for Interprovincial Free Trade is one of five finalists for this year's Donner Prize. The following is an excerpt.

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