Time for a court challenge. Provincial liquor monopolies unconstitutional

By on March 6, 2014

e3828_Screen_Shot_2014_02_13_at_10.27.13_AMEver wonder what an Achilles heel is? It is one of those expressions we all use but whose origins may seem obscure.

Achilles was one of the central characters in Homer’s Iliad. The Greeks’ greatest hero, his mother had been instructed by the gods to dip him as a child in the River Styx. This made him invulnerable, with one tiny exception.

She had to hold on to him somehow and the most convenient handle was his heel. As a result, his heel did not get submerged and remained this formidable warrior’s one tiny point of vulnerability.

One weakness was enough to bring him down, however. Near the end of the siege of Troy, a poisoned Trojan arrow struck his heel.

Achilles’ one fatal weakness kept returning to my mind in recent days as I contemplate the future of provincial liquor monopolies across the land.

The arguments in favour of having the provinces get rid of these quaint holdovers of Prohibition and Protestant morality seem to me to be overwhelming. Consumers are overcharged and underserved, taxpayers realize lower returns, governments have huge capital tied up in them at a time when many are drowning in debt, and there is absolutely no need for government to own the distribution and retail system in order to protect the public interest.

Yet, like Achilles, the provincial liquor monopolies often seem almost invulnerable. Thousands of unionized employees work in them and are vocal and free-spending opponents of privatization. Governments hate change, fear (inaccurately) a loss of revenue and love the employment, control and profile their monopoly creates in communities across their province. And some members of the public are vulnerable to scaremongering about runaway access to booze for underage drinkers and other social ills.

The easiest thing for the average premier to do, then, is nothing. And if the provinces do nothing, surely the liquor monopolies are untouchable.

Except there is this little matter of Achilles heel . . .

In the case of the provincial liquor monopolies, the niggling vulnerability is this: provinces actually don’t have the constitutional power to create such monopolies.

Now if your province can’t regulate international commerce, for example, by what right does it stop you from simply bypassing it and buying directly from your favourite Scottish distiller or French vintner? The answer is that Ottawa gave them this authority through a 90-year-old law called the Importation of Intoxicating Liquors Act. That’s right. The provincial liquor monopolies are made possible by Ottawa, not the provinces. If you want the proof, ask yourself who it was that legislated recently to permit Canadians to bring two bottles of wine, one bottle of booze and a dozen beers home from another province? Ottawa. And there wasn’t a thing the provinces could do about it.

Think about that: Ottawa, allegedly the consumer’s best friend, the one government in the country that is supposed to be the unambiguous champion of a single national market, of the freedom of Canadians to buy and sell from each other without hindrance by parochial provinces, is the government that has carved up the national market in alcohol and handed it to the provinces on a silver platter.

With one stroke of a pen, Ottawa could free consumers to buy and sell as they wish, subject to perfectly legal rules about the drinking age and other public health concerns. Based on Alberta’s successful experience with retail privatization, there is no reason for provinces to fear a loss of revenue.

Now here’s the second arrow aimed at Achilles’ boozy heel: under the Constitution, Ottawa doesn’t have the power to allow such monopolies either. According to prominent lawyer and constitutionalist Ian Blue, Ottawa’s law falls afoul of Section 121 of the Constitution Act, 1867, that essentially says that the products of one province must be allowed freely into the other provinces.

No exceptions. No federal override. We were creating one open national market in 1867 and the Constitution said so.

These things are never guaranteed, but I think Blue’s argument is correct. If the feds don’t act to tear down this unjustified barrier to Canadians’ individual freedom, a court challenge that saw Ottawa’s law struck down would do the job just as well.

Against the odds invulnerable Achilles fell, then impregnable Troy. Can the provincial liquor monopolies be far behind? -TroyMedia

Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute, an independent nonpartisan public-policy think-tank in Ottawa.

 

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