2016 NBPC 3, 2016 NBPC 3

2016NBPC03 File: 05672010 CANADA PROVINCE OF NEW BRUNSWICK CAMPBELLTON PROVINCIAL COURT HER MAJESTY THE QUEEN - v. - GÉRARD COMEAU BEFORE: The Honourable Judge Ronald LeBlanc HELD AT: Campbellton, NB DATE OF HEARING: August 25, 26, 27 and 28, 2016 DATE OF DECISION: April 29, 2016

APPEARANCES: Mr. William Richards and Mrs. Kathryn Gregory, for the Attorney General of New Brunswick Mr. Arnold Schwisberg, Mr. Mikael Bernard and Mrs. Karen Selick, for the defendant JUDGMENT INTRODUCTION 1 . Mr. Gérard Comeau of Tracadie, New Brunswick, is charged by way of Notice of Prosecution with (translation) : “did have or keep liquor not purchased from the Corporation” in Campbellton, New Brunswick, on October 6, 2012, an offence under

section 134(

b) of the New Brunswick Liquor Control Act . 2 . The defence submits that

section 134 (

b) of the Liquor Control Act is an unenforceable provincial law under which no one can be convicted. They claim it is of no force and effect as it contravenes

section 121 of the Constitution Act, 1867 . 3 . The prosecution of course takes serious issue with this contention. 4 . This Court is called upon to interpret

section 121 of the Constitution Act, 1867 and determine how it impacts on the defendant’s rights. FACTS 5 . The parties agreed to the essential facts giving rise to the ticket issued to Mr. Comeau. An Agreed Statement of Facts was marked as Exhibit C-1 at the trial. Additional facts relating to the stop, the detention and the seizure of the alcohol in question were supplied by Constable Guy Savoie, the police officer who intercepted Mr. Comeau’s vehicle in Campbellton on the date in question. 6 . On Saturday, October 6, 2012, Mr.

Gérard Comeau, a resident of Tracadie in the Acadian Peninsula, drove to Pointe-à-la- Croix and the Listuguj First Nation Indian Reserve in the province of Québec in his automobile. These communities are directly on the other side of the Restigouche River after crossing the J.C. Van Horne Bridge from the city of Campbellton, New Brunswick. 7 . Mr. Comeau was under surveillance by the RCMP once he arrived in the province of Québec. The RCMP Campbellton Detachment had enlisted the aid of their counterparts in Québec to assist in a project initiated by then Corporal René Labbé, the team leader of the project.

There was no complaint filed with the RCMP which initiated the investigation; it was self-generated by the police force and was instigated as a crime-reduction initiative. The police were targeting people who had in excess of five cases of beer in their possession once they crossed the border. The operation involved surveillance by Québec RCMP of customers from New Brunswick at outlets selling liquor in Pointe-à-la-Croix or in Listuguj, following them in unmarked vehicles onto the bridge, radioing ahead to the local police force and providing them the licence plate number and description of the vehicle involved.

The vehicle would then be stopped by members of the RCMP Campbellton Detachment and searched for the illegally possessed alcohol. The operation lasted two days. It is unknown how many tickets were issued for this type of infraction over the two-day span. 8 . Mr. Comeau had gone to Pointe-à-la-Croix and Listuguj specifically to purchase alcoholic beverages at a cheaper price than that which he would have paid had he purchased the alcohol in New Brunswick. He was seen entering Wysote’s Convenience Store, the Société des alcools du Québec and the Provigo Supermarket, all of which sold alcoholic beverages.

He crossed the J.C. Van Horne Bridge into the province of New Brunswick, intending to return to his home in Tracadie. 9 . His vehicle was intercepted on Val d’Amour Street in Campbellton. The police seized from the trunk of his vehicle the following: • 2 cases of 24 bottles of Sleeman’s Light beer; • 2 cases of 24 bottles of Miller Genuine Draft beer;

• 2 cases of 24 bottles of Molson M beer; • 3 cases of 20 bottles of Budweiser Light beer; • 3 cases of 20 bottles of Budweiser beer; • 3 cases of 30 cans of Coors Light beer; • 2 bottles of whiskey, 750 ml per bottle; and • 1 bottle of Stinger Premixxx liqueur, 1.14 litre. 10 . The total alcohol seized was therefore 354 bottles or cans of beer and three bottles of liquor. Mr. Comeau was issued his ticket and was allowed to leave. 11 .

It was furthermore stipulated in the Agreed Statement of Facts that New Brunswickers purchase liquor from the province of Québec and transport it themselves into New Brunswick regularly. This particular aspect of the evidence was further highlighted by John Beckingham, a private investigator of 27 years’ experience in the field who had been hired by the defendant to investigate the frequency of alcohol purchases by New Brunswickers in the province of Québec.

He conducted his investigation over the course of six days during a two-week period in July and August of 2015 by taking photos, talking to employees and owners of either convenience stores or the Société des alcools du Québec, and generally observing the number of cars parked in the parking lots and taking note of their province of origin. He concluded from his observations that during the period in question approximately two thirds of the customers at these convenience stores or the Société des alcools du Québec had licence plates originating from the province of New Brunswick.

Furthermore, at Wysote’s Convenience Store, he noted that approximately ninety percent of the floor space was occupied by beer products. THE LEGISLATION 12 . The following are the applicable provisions of the Liquor Control Act of New Brunswick: 133 Except as provided by this Act or the regulations, no person shall have liquor in his possession within the Province . 134 Except as provided by this Act or the regulations, no person, within the Province, by himself, his clerk, employee, servant or agent shall (

a) attempt to purchase, or directly or indirectly or upon any pretence, or upon any device, purchase liquor, nor (

b) have or keep liquor, not purchased from the Corporation. 43 A person who is not prohibited by law from having or consuming liquor may have and consume in a residence or in a roomette, duplex roomette, compartment, bedroom or drawing room occupied by him in a train, but not in a public place except when authorized under a permit, (

a) any liquor that has lawfully been acquired by him under this Act from the Corporation, (

b) liquor not in excess of one bottle or beer not in excess of twelve pints purchased outside Canada by him or by the person from whom he received it as a bona fide gift, or (

c) liquor not in excess of one bottle or beer not in excess of twelve pints purchased outside New Brunswick from a liquor commission, board or similar body in any province or territory of Canada by such person or by a person from whom he received it as a bona fide gift. 148(2) A person who violates or fails to comply with a provision of this Act that is listed in Column I of

Schedule A commits an offence. 148(3) For the purposes of

Part II of the Provincial Offences Procedure Act , each offence listed in Column I of

Schedule A is punishable as an offence of the category listed beside it in Column II of

Schedule A.

13. Under

Schedule A, in Column I,

section 134(

b) of the Liquor Control Act is a category E offence. In New Brunswick, underthe Provincial Offences Procedure Act, a category E “prescribed offence” carries, upon conviction, a minimum fine of $240.00. Whenone adds to that fine the 20% surcharge under the Victim Services Act of New Brunswick and the $4.50 administrative fee prescribed byregulation for the processing of tickets, the result is a fine of $292.50, which is the amount indicated on Mr. Comeau’s ticket.

Section 199 provides an interpretive aid to the Act: 199(1) The purpose and intent of this Act are to prohibit transactions in liquor that take place wholly within the Province,except under control as specifically provided by this Act; and every

section and provision of this Act shall be construedaccordingly. 199(2) The provisions of this Act dealing with the importation, sale, and disposition of liquor within the Province through theinstrumentality of the Corporation, and otherwise, provide the means by which such control shall be made effective; and nothingin this Act forbids, affects, or regulates any transaction that is not subject to the legislative authority of the Province.

Section 121 of the Constitution Act, 1867, 30 & 31 Victoria, c. 3 (U.K.) provides as follows: s. 121 All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, beadmitted free into each of the other Provinces. 15. Section 63(1) of the New Brunswick Provincial Offences Procedure Act actually includes the possibility of a 30-day jail termfor repeat offenders who commit a category E offence.

It provides: 63(1) Where, in relation to a category E offence, a defendant is convicted of an offence and has a previous conviction for thesame offence, the judge may, if satisfied that no other sentence will deter the defendant from repeating that offence, sentence thedefendant to a term of imprisonment of not more than thirty days. 16. Finally, sub-section 3(1) of the federal Importation of Intoxicating Liquors Act, R.S.C. 1985 c. I-13 will be referenced.

Itprovides as follows: 3(1) Notwithstanding any other Act or law, no person shall import, send, take or transport, or cause to be imported, sent,taken or transported, into any province from or out of any place within or outside Canada any intoxicating liquor, except suchas has been purchased by or on behalf of, and that is consigned to Her Majesty or the executive government of, the province intowhich it is being imported, sent, taken or transported, or any board, commission, officer or other governmental agency that, bythe law of the province, is vested with the right of selling intoxicating liquor.

THE POSITION OF THE PARTIES THE DEFENCE 17. The defence submits that

section 134(

b) of the Liquor Control Act is not an enforceable provincial law as it constitutes atrade barrier that is contrary to

section 121 of the Constitution Act, 1867. In pith and substance

section 134(

b) is a trade barrier, eithertariff or non-tariff. They maintain that a purposive or a progressive

interpretation of

section 121 of the Constitution Act, 1867 must leadthe Court to conclude that

section 121 requires free trade among provinces without trade barriers, tariff or non-tariff, regardless ofwhether the barrier is found in provincial legislation or federal legislation. They submit that the wording, legislative history, legislativecontext and the scheme of the Constitution Act, 1867 all compel the Court to conclude that

section 121 was intended to secure free tradeamong the provinces, whether existing or to be added. They further submit that a plain reading of the

section allows for only oneconclusion: free trade. They submit that the Supreme Court of Canada judgment in Gold Seal Ltd. v. Alberta (Attorney General), (SCC), [1921] S.C.J. No. 43 (hereinafter referred to as Gold Seal) and all other subsequent judicial decisions on

section 121should be rejected outright as they are wrongly decided and of doubtful value based on questionable practices by certain justices of theSupreme Court who participated in the Gold Seal case. Other aspects of these arguments will be addressed as they arise.

THE PROSECUTION 18 . The prosecution asks the Court to address the fundamental structure of the Canadian Constitution and its relationship to the operation of the federation to determine whether

section 134 (

b) of the Liquor Control Ac t violates

section 121 of the Constitution Act, 1867 . They maintain that rules of statutory

interpretation support the conclusion that

section 121 was intended to disarm only provincial laws requiring cross-border tariffs or duties. They argue that the Canadian Constitution is composed of both written rules (the Constitution Act, 1867 , the amended and repatriated Constitution and various constitutional amendments) and unwritten rules called constitutional conventions that make a living constitution . The Constitution must continue to evolve in order to be responsive to the nature of the Canadian federation. They maintain that legislative co-operation is required as between the federal government and the provincial legislatures.

They posit that federalism, one of the four foundational principles of the Canadian constitution, gives Canada its unique political character by recognizing the diversity of the component parts of the Constitution and the autonomy of provincial governments to develop their societies within their respective spheres of jurisdiction. They invite the Court to recognize the plurality of the modern nation state and acknowledge that this plurality is a rational part of the political reality in the federal process. They suggest this Court should adopt the statutory

interpretation of

section 121 as was decided by the Supreme Court of Canada in the Gold Seal case and they invite the Court to dismiss the arguments presented by the defence. Finally, the prosecution argues that it is the federal Importation of Intoxicating Liquors Act , not the provincial Liquor Control Act , that establishes prohibitions against the importation of liquor into one province from another and since the defence has not challenged the federal Act , their argument should fail. A PRELIMINARY ISSUE 19 .

This last mentioned argument from the prosecution, the one proposing a rejection based on lack of an attack on the federal Act was not, I believe, raised during oral argument. It flows from the Crown’s Post-trial Brief. The defence, in their Reply Brief to the Crown’s Post-trial Brief, states that they do not need to challenge the Importation of Intoxicating Liquors Act for the purposes of their defence because

section 134 (

b) of the Liquor Control Act is independent of the Importation of Intoxicating Liquors Act . However, in the alternative, they argue that

section 3 of the Importation of Intoxicating Liquors Act also violates

section 121 of the Constitution Act , 1867 . 20 . I will not address the issue of whether or not

section 3 of the Importation of Intoxicating Liquors Act violates

section 121 of the Constitution Act, 1867 . The Importation of Intoxicating Liquors Act is federal legislation. The federal government was never invited to participate in these proceedings. If the constitutionality of federal legislation is intended to be attacked, the federal government must be given the opportunity to participate and to respond. Beyond the basic common sense of this proposition, Rule 11 of the New Brunswick Rules of Provincial Court Practice required Notice of Application to have been served on the Regional Office of the Attorney General of Canada, which was not done.

The Notice of Application filed was served on the local office of the Attorney General of New Brunswick only. That was not surprising since the constitutional issue raised was: “Is

section 134(

b) of the Liquor Control Act , RSNB 1973, c. L-10, contrary to and in violation of

section 121 of the Constitution Act, 1867 ?” No mention is made in that document to

section 3 of the Importation of Intoxicating Liquors Act . Furthermore, the presiding judge was never asked to add further issues to the trial. As a consequence, for the purposes of my analysis, I limit my comments to

section 134(

b) of the provincial Liquor Control Act , and will not deal with the constitutionality of

section 3 of the federal Importation of Intoxicating Liquors Act . THE ISSUE 21 . The issue is a simple one: whether

section 134 (

b) of the Liquor Control Act of New Brunswick violates

section 121 of the Constitution Act, 1867 , and is therefore of no force or effect as against the defendant. This issue requires the Court to address the meaning to be attributed to the words “admitted free” found in

section 121 of the Constitution Act, 1867 . The simplicity of the issue is rivalled only by the complexity of the factors that the Court must consider in arriving at its conclusion. The very nature of the Canadian federation is at stake. 22 . In arriving at a conclusion on this issue, the Court will examine the applicable rules of

interpretation for constitutional documents and the legislative history of the Constitution Act, 1867 , including the historic events giving rise to the “constitutional moment”. The Court will also consider the context and scheme of the British North America Act,1867 as it was proclaimed on July 1, 1867, as well as the relevant jurisprudence pertinent to

section 121 . The Court will also address the issue of whether the jurisprudence has been tainted by the infamous “Duff letter” which figures prominently in the defence attack on the jurisprudential

interpretations following the release of the Gold Seal decision. SOURCES OF INFORMATION FORMING CONCLUSIONS

23 . During the course of this decision, I will refer to certain facts. The proof of these facts derives from the testimony given by the various witnesses presented during the trial, the reports of the two expert witnesses, Dr. Andrew Smith and Dr. Thomas Bateman, filed as exhibits respectively D-6 and C-11, the other exhibits tendered at the trial, all of which were admitted with the consent of the opposing party, and finally by reliance on proof of facts by judicial notice.

By judicial notice, I mean matters relating to the history of Canada that do not require to be proven because of their notoriety and indisputability or that are capable of immediate and accurate demonstration by resort to readily accessible sources of indisputable accuracy. Regarding this last mentioned category of evidence, however, the Court was careful not to take judicial notice of any fact vital to the resolution of the case or of any other important fact in issue. PLACING THE ISSUE IN PROPER CONTEXT 24 .

Section 134 (

b) of the Liquor Control Act is directed at the possession of liquor wholly within the province. It specifically does not prohibit importation of liquor from outside the province. The

section provides that no person shall have in his possession liquor in the province that was not purchased from the Corporation. 25 . The Liquor Control Act then allows for exceptions, one being in relation to liquor imported into the province from another province. That is found in

section 43 (

c) of the Liquor Control Act , which allows for a person to have in his possession in this province one bottle of liquor or 12 pints of beer purchased from a liquor commission outside of this province. Although not raised by counsel at trial, a strict

interpretation of this

section allows for one or the other of the two types of liquor, not both. It actually provides for liquor or beer. This same

section allows a person in this province to possess liquor in the province:

section 43(a). The word “liquor” is defined in

section 1 of the Liquor Control Act as follows: “liquor” includes (boisson alcoolique) (

a) any alcoholic, spirituous, vinous, fermented, malt or other intoxicating liquid or combination of liquids, (

b) any mixed liquid, a part of which is alcoholic, spirituous, vinous, fermented, malt or otherwise intoxicating, (

c) all drinks or drinkable liquids and all preparations or mixtures that are capable of human consumption and intoxicating, and (

d) beer and wine, but does not include any beverage obtained by the alcoholic fermentation of an infusion or decoction of barley malt and hops or of any similar products in drinkable water and containing 0.5 per cent or less of proof spirits. 26 . Since the definition of “liquor” includes “beer”, then one could argue the rather improbable result that a person could have in his possession, in compliance with

section 43 (

c) of the Liquor Control Act , one bottle of beer or 12 pints of beer purchased from a liquor commission outside of this province. 27 . Since the provincial legislation prohibits only the possession of liquor or beer purchased from outside the province in quantities exceeding the prescribed limit, it is not an offence under the New Brunswick legislation to transport the alcohol across provincial boundaries. It is the Importation of Intoxicating Liquors Act , the federal Act , which prohibits importation of intoxicating liquors. However, it is impossible for

section 134 (

b) of the Liquor Control Act to come into play unless and until the liquor or beer is transported across the provincial boundary. No one can be charged under

section 134(

b) unless someone transports liquor or beer across the provincial lines. Once the liquor or beer is in New Brunswick, in provenance from another province, that person can be charged with the unlawful possession of it if the amount exceeds that permitted by the provincial legislation. 28 . The Importation of Intoxicating Liquors Act creates liquor monopolies across the country.

It provides in part that no person shall import or transport into any province from any other province any intoxicating liquor unless that liquor has been purchased by the government of the province into which it is being transported or imported. Admittedly, this is a gross paraphrasing of the section, but it conveys the true import of it. 29 .

Section 134 (

b) of the Liquor Control Act and

section 3 of the Importation of Intoxicating Liquors Act were the subject of debate in the New Brunswick Court of Appeal in the case of R. v. Gautreau [1978] N.B.J. No. 107 . The facts in that case were not dissimilar to those in the present case. Mr. Gautreau had purchased 22 cases of beer in Québec and was on his way to his home in New Brunswick when he was stopped by the RCMP. The fact this occurred in 1977, almost 40 years ago, has not been lost on this Court. The applicable provincial and federal legislation in the Gautreau case were identical to the ones being argued in this case. The trial Judge in Gautreau expressed the tentative opinion that

section 134 of the Liquor Control Act was possibly ultra vires the Provincial Legislature as legislation impinging upon federal jurisdiction over trade and commerce.

Section 121 was not argued. The Court of Appeal dealt with the case on the basis of harmony between conflicting enactments. It decided, at paragraphs 9 and 11:

9 “There is, therefore, no conflict between the federal act prohibiting the importation of liquor into a province and theprohibition of the Liquor Control Act of having or keeping liquor in the province not purchased from the Corporation. The twoprohibitions are separate and distinct. Clearly a person may violate the prohibition against having or keeping liquor notpurchased from the Corporation and which has been imported into the province in violation of the Importation of IntoxicatingLiquors Act without violating the provisions of that Act.

It is also apparent that a violation of the Federal Act against importingliquor may, in certain circumstances, involve a violation of the prohibition against having or keeping liquor not purchased fromthe Corporation. This, in my opinion, does not involve the doctrine of paramountcy because, to use the words of Mr. JusticeJudson in O'Grady v. Sparling, (SCC), [1960] S.C.R. 804, at 811, "both provisions can live together and operateconcurrently". 11 In the instant case s. 3 of the Importation of Intoxicating Liquors Act is unquestionably valid legislation and s. 134(

b) of theLiquor Control Act is prima facie intra vires. Since there is no conflict between them, in the sense that they can stand together,the latter provision is not affected by the doctrine of paramountcy”. 30. Importantly, the Court applied an earlier ruling from the Judicial Committee of the Privy Council that held that a provinciallegislature has no power or authority to prohibit the importation of intoxicating liquor into a province. It also applied the Gold Sealcase.

I refer to paragraph 6: 6 “It is well established by a series of judicial decisions that while Parliament and the Legislature together have completelegislative authority to regulate and control traffic in intoxicating liquor, certain aspects of the control fall solely in the authorityof Parliament. Thus in A.G. Ont. v. A.G. Canada, [1896] A.C. 348 the Judicial Committee held that a provincial legislature hasno power or authority to prohibit the importation of intoxicating liquor into the province. The question was again dealt with inGold Seal Ltd. v.

Dominion Express Co. (1921), (SCC), 62 D.L.R. 62 when the Supreme Court of Canada heldthat Parliament had power to prohibit the importation of intoxicating liquor into Alberta under its general power under s. 91 ofthe British North America Act "to make laws for the peace, order and good government of Canada" as well as under itsjurisdiction to regulate trade and commerce under s. 91(2)”. 31. Additional evidence was presented to this Court regarding what I would call collateral issues.

These include the MaritimeBeer Accord, the Agreement on Internal Trade – an attempt to create a policy changing the amount of alcohol a person could bring intoNew Brunswick – and discussions between Ministers regarding amending the Importation of Intoxicating Liquors Act. I will deal withthese briefly, since none of them deal directly with the issue of the

interpretation of the impugned legislation. 32. The Maritime Beer Accord is nothing more than the result of a handshake deal made in 1993 between Frank McKenna, thenPremier of New Brunswick, and John Savage, then Premier of Nova Scotia, to bypass the controls imposed by the provinces as a resultof the Importation of Intoxicating Liquors Act. If a brewer wanted to sell beer in a province, they had to have a brewery in the province. Both Moosehead and Labatt’s had breweries in New Brunswick and Nova Scotia.

The Premiers agreed that Moosehead would close theirplant in Nova Scotia and Labatt’s would close their plant in New Brunswick yet both would retain the privileges associated with stillhaving a plant in both provinces. With this agreement, beer produced in Nova Scotia was treated exactly the same as beer produced inNew Brunswick. The same applied for Nova Scotia produced beer. The resulting reciprocal treatment applied to the listing, pricing,distribution and marketing of beer and access to points of sale.

Currently, the situation in New Brunswick is that beer produced in NovaScotia or Prince Edward Island is treated exactly like beer produced in New Brunswick whereas beer produced in Ontario and Québecare not. Beer produced by brewers in the last two mentioned provinces, and all other provinces, is handled through the Alcool NBLiquor (the ANBL) warehouse, which attracts a warehouse handling fee, which would be considered, no doubt, to be a tariff tradebarrier. 33. Efforts to remove trade barriers also arose out of discussions leading up to the Agreement on Internal Trade, admitted intoevidence as Exhibit C-7.

The Agreement on Internal Trade Implementation Act, S.C. c. 17, is the legislated result of those discussions. 34. The

preamble of the Agreement on Internal Trade states in part the following: “RESOLVED to: REDUCE AND ELIMINATE, to the extent possible, barriers to the free movement of persons, goods, services and investmentswithin Canada; [...]” Articles 100, 402 and 404 state the following:

Article 100: Objective “It is the objective of the Parties to reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services and investments within Canada and to establish an open, efficient and stable domestic market. All Parties recognize and agree that enhancing trade and mobility within Canada would contribute to the attainment of this goal.”

Article 402: Right of Entry and Exit “Subject to

Article 404, no Party shall adopt or maintain any measure that restricts or prevents the movement of persons, goods, services or investments across provincial boundaries.”

Article 404: Legitimate Objectives “Where it is established that a measure is inconsistent with Article…402…that measure is still permissible under this Agreement where it can be demonstrated that:

a) the purpose of the measure is to achieve a legitimate objective;

b) the measure does not operate to impair unduly the access of persons, goods, services or investments of a Party that meet that legitimate objective;

c) the measure is not more trade restrictive than necessary to achieve that legitimate objective; and

d) the measure does not create a disguised restriction on trade”. 35 .

Article 402, the right of entry and exit, is specifically excluded from operation in the case of alcoholic beverages: article 1000(1). 36 . The

preamble to the federal Agreement on Internal Trade Implementation Act specifies the following: “…AND WHEREAS the reduction or elimination of barriers to the free movement of persons, goods, services and investments is essential for the promotion of an open, efficient and stable domestic market to enhance the competitiveness of Canadian business and sustainable development;” 37 . Mr. Richard Smith, the prosecution witness who testified about the Agreement on Internal Trade and its implementation, was not an expert in the field and only had a rudimentary knowledge of its contents.

Being the Senior Vice President, Chief Operating Officer and Secretary of the Board of Directors of the ANBL however, he did have knowledge about current liquor practices, particularly involving New Brunswick.

To cursorily and perhaps unduly summarize his testimony on the Maritime Beer Accord and the implementation of the Agreement on Internal Trade in this province, New Brunswick continues to respect the handshake deal with Nova Scotia and Prince Edward Island on beer distribution notwithstanding Nova Scotia’s reticence to reciprocate, and because New Brunswick is of the opinion that there are discriminatory practices in Québec and Ontario in relation to alcohol products, this province retains its discriminatory practices against products made in their jurisdictions (transcript, vol. 1, page 56). 38 . Mr.

Smith also testified about Exhibit C-4, a submission to the Board of Directors of ANBL in October of 2011 dealing with a resolution to approve a change to the existing New Brunswick legislation on interprovincial travel importation of liquor.

In June of 2011, the Canadian Association of Liquor Jurisdictions had approved a resolution supporting the ability of individuals to transport on their person, and for their personal use, reasonable quantities of liquor across provincial and territorial boundaries within Canada, subject to the proviso that each jurisdiction would determine what quantity of liquor was reasonable. Subsequent conference calls were held amongst the jurisdictions resulting in most implementing or adopting policies to support the resolution. The policy change was adopted by the Board of ANBL at its October 14, 2011, meeting.

The policy adopted was identical to that adopted in Nova Scotia, and matched quantities adopted in Ontario and Nova Scotia. The policy adopted stated: “New Brunswick residents returning home from travel within Canada may have reasonable quantities of beverage alcohol, obtained elsewhere in Canada for personal use, accompany them on their person without penalty. For the purposes of this policy, “reasonable quantities” are defined as:

1. Spirits: 3 litres; 2. Wine: 9 litres; 3. Beer: 24 litres. Amounts in excess of these limits shall not be permitted and are to be obtained via the ANBL special order process”. 39. It would appear that, flawed language notwithstanding, such a policy represented national standards. The Department ofPublic Safety, responsible for the Liquor Control Act in New Brunswick, did not actively pursue the request for modification to itslegislation. The proposed 24 litres of beer represents the equivalent of 70 bottles, apparently. 40.

Finally, a great deal of interest was generated by the initiative of the province of British Columbia to amend the Importationof Intoxicating Liquors Act by proclamation of Bill C-311. Exhibit C-6 represents the opinions expressed in the attached letters bycertain of the politicians in the Maritime Provinces to the proposed enactment. The provinces of Nova Scotia, Prince Edward Island andNew Brunswick, at least as regards the dates of the forwarding of these letters, all opposed the proposed amendment. That amendmentwould have facilitated direct delivery of wine products to consumers in all provinces.

The provinces felt that supporting the proposalwould endanger a reliable source of revenue. Bill C-311 allowed for importation of wine into another province provided that theindividual complied with the laws of the receiving province, and that it be for personal consumption only. THE

INTERPRETATION OF CONSTITUTIONAL DOCUMENTS 41. As was so aptly stated by Justices Cromwell and Karakatsanis in Québec (Attorney General) v. Canada (Attorney General)2015 SCC 14 , [2015] 1 S.C.R. 693 in paragraph 3, “…the courts are not to question the wisdom of legislation but only to ruleon its legality”. 42. The Constitution of Canada requires a “flexible

interpretation” so that it can be adapted over time to changing conditions. This is the source of what has been called the “progressive

interpretation” as explained by Lord Sankey’s use of a colourful metaphor inEdwards v. A.-G. Canada (UK JCPC), [1930] A.C. 124. He described the Constitution of Canada as “a living treecapable of growth and expansion within its natural limits”. He stated that the Constitution of Canada must not be “cut down” by “anarrow and technical construction” but rather should be the subject of “a large and liberal

interpretation”. This “living tree” metaphor hasbeen applied by the Supreme Court of Canada in many cases, including A.G. Québec v. Blaikie (SCC), [1979] 2 S.C.R.1016, a case involving language rights, A.-G. B.C. v. Canada Trust Co. (SCC), [1980] 2 S.C.R. 466, a case involvingthe taxation power and Re Residential Tenancies Act (SCC), [1981] 1 S.C.R. 714, a case involving the

interpretation ofsection 96 of the Constitution Act, 1867. 43. In the Same-Sex Marriage Reference 2004 SCC 79 , [2004] 3 S.C.R. 698, the question before the Supreme Court ofCanada was whether Parliament’s power over “marriage” extended to legalizing same-sex marriages. The issue of the need to interpretthe Constitution by reference to the applicable norms at the time of Confederation came into play. In 1867, the prevailing view was thatmarriage was by its very nature a union between a man and a woman. There were no exceptions to this. Homosexual acts were illegal,even as between consenting adults.

The Court said at paragraph 22, in response to the argument that the Constitution Act, 1867effectively entrenched the common law definition of "marriage" as it stood in 1867, that: 22 “…The "frozen concepts" reasoning runs contrary to one of the most fundamental principles of Canadian constitutionalinterpretation: that our Constitution is a living tree which, by way of progressive

interpretation, accommodates and addressesthe realities of modern life…” At paragraph 23, the Court continued: 23 “A large and liberal, or progressive,

interpretation ensures the continued relevance and, indeed, legitimacy of Canada'sconstituting document. By way of progressive

interpretation our Constitution succeeds in its ambitious enterprise, that ofstructuring the exercise of power by the organs of the state in times vastly different from those in which it was crafted…” 44. The reason for this adaptive

interpretation is explained by Professor Peter Hogg in the Constitutional Law of Canada, 5th Edition at page 36-26 as follows: “It is never seriously doubted that progressive

interpretation is necessary and desirable in order to adapt the Constitution to

facts that did not exist and could not have been foreseen at the time when it was written”. 45. Judicial

interpretations must change as society’s values change and evolve. This is inevitable. Consequently courts must notadopt inflexible

interpretations rooted in the past. On the other hand, progressive

interpretations must not “liberate the courts from thenormal constraints of

interpretation”, per Hogg, supra at 15-50. He states: “…Constitutional language, like the language of other texts, must be “placed in its proper linguistic, philosophical and historicalcontexts” (citing R v Big M Drug Mart Ltd. (SCC), [1985] 1 S.C.R. 295 at 344, per Dickson, J). Nor is the originalunderstanding (if it can be ascertained), irrelevant. On the contrary, the

interpretation of a constitutional provision “must beanchored in the historical context of the provision” (citing R v Blais 2003 SCC 44 , [2003] 2 S.C.R. 236). All thatprogressive

interpretation insists is that the original understanding is not binding forever…contemporary courts are notconstrained to limit their

interpretations to meanings that would have been contemplated in 1867 (or whenever the text wascreated)”. 46. The prosecution has insisted on this point in their presentation. As Professor Hogg has stated at page 60-10 of his text: “The principle of progressive

interpretation means that the views of the framers about the meaning of particular provisions ofthe constitutional text become less and less relevant with the passage of time. As Beetz, J. has pointed out, legislative history is a“starting point”, but it cannot be conclusive in interpreting “essential dynamic” provisions (citing Martin Service Station v MNR (SCC), [1977] 2 S.C.R. 996 at 1006)”. 47.

The last mentioned principle no doubt arises from the following, found in Mister Justice Beetz’ judgment in the MartinService Station case, supra: “…Legislative history provides a starting point which may prove helpful in ascertaining the nature of a given legislativecompetence; but, as is shown by the history of legislation relating to bankruptcy and insolvency and by the

interpretation of thejurisdiction of Parliament in this matter, it is seldom conclusive as to the scope of that competence for legislative competence isessentially dynamic”. 48. Post-Charter cases involving

interpretation of the Constitution stress a “purposeful

interpretations” – see for example R. v.Kapp [2008] S.C.C. 41 at paragraph 82. This requires the Court to examine the actual wording of the

section involved, its legislativehistory, the scheme of the Act and the legislative context. The

interpretation should be a generous rather than a legalistic one which,while not overshooting the actual purpose of the legislation in question, must be placed in its proper linguistic, philosophic and historicalcontext: R. v. Big M. Drug Mart (SCC), [1985] 1 S.C.R. 295 at paragraph 117. THE WORDING OF

SECTION 121 OF THE CONSTITUTION ACT, 1867 49. What must be determined is the meaning to be attributed to the words “admitted free” in

section 121: “All Articles of theGrowth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the otherProvinces”. 50. The defence posits that a liberal

interpretation of these words leads one to conclude that all articles grown, produced ormanufactured in one province of Canada must be admitted free into another province of Canada because, based on either a progressive ora purposive

interpretation of the Constitution, the

section mandates free trade among provinces without any barriers, whether the barrierbe tariff or non-tariff and whether the barrier is found in federal or provincial legislation. 51. The Supreme Court of Canada in Gold Seal has said otherwise. They have said that

section 121 does nothing more thanprotect the movement of Canadian goods against interprovincial “custom duties” or “charges”. This

interpretation has been applied inCanada by all provinces and territories for over 95 years. 52. Yet this is decidedly not what was intended by the Fathers of Confederation. The historical context of the

section in question

was very ably and thoroughly described at trial by one of the world’s most renowned experts on the constitutional moment, Dr. Andrew D. Smith, whose credentials were unimpeachable and whose testimony was beyond reproach. I accept his testimony without hesitation and will refer to it in more detail later in this judgment when I address the issue of the historical context of the challenged section. 53 . Addressing myself to the wording used in the section, the question then becomes, was the Gold Seal qualifier “admitted free from custom duties or charges ” justified? There is certainly nothing in the plain reading of

section 121 to suggest that the words “admitted free” meant admitted free from custom duties or charges. Those words do not form any part of the section. 54 . Dr. Smith provided some important background information concerning the drafting of

section 121 which I accept as having shed some light on its proper

interpretation. The British North America Act, 1867 (UK), renamed the Constitution Act, 1867 by the Constitution Act, 1982 was an enactment of the Parliament of the United Kingdom. It created the federal nation of Canada in 1867 by uniting the provinces of Canada (now Ontario and Québec), Nova Scotia and New Brunswick into a single « Dominion » it named Canada. The British North America Act, 1867 was the culminating legislation emanating from agreements and discussions arising from conferences held in Charlottetown in 1864, Québec City in 1864 and in London, England in December 1866. 55 .

The “constitutional moment” is the expression used to describe the statements and the actions of the framers of the British North America Act, 1867 during the period from June 1864 to March 1867, the period of time when the entirety of the details of that Act were being worked out between the various participants. 56 . A rough draft constitution, called the Québec Plan of Union, was produced by the Fathers of Confederation at the Québec conference in the fall of 1864. That draft was modified at the constitutional conference held in London, resulting in the London Resolutions of 1866.

It was further subsequently refined as the Fathers of Confederation continued to develop the plan, resulting in the bill that was presented to the British Parliament in February and March 1867. 57 .

Section 121 of the British North America Act, 1867 , as well as other parts of that bill, was drafted by a British government lawyer named Francis Savage Reilly. Dr. Smith testified that Frank Reilly was born in Dublin in 1825, was called to the English bar in 1851 and specialized in insurance cases and commercial arbitration. He lived in London. Two versions of

section 121 were drafted by Frank Reilly. The initial draft, numbered 125, read like this: 125 All Articles the Growth or Produce or Manufacture of Ontario, Québec, Nova Scotia, or New Brunswick, shall be admitted free into all Ports in Canada. The final draft,

section 121, which was enacted, reads as follows: 121 All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces. 58 . As can be seen, and as confirmed through the testimony of Dr. Smith, there are two striking differences between the two drafts. 59 . Firstly, the

section 125 draft mentions specifically that the articles of growth, produce or manufacture of Ontario, Québec, Nova Scotia or New Brunswick was to be admitted free. The specific provinces were named. The reference to these specific provinces was deleted in the redrafted

section 121 , which refers to all articles of growth, produce or manufacture of “any one of the provinces”. The striking out of the names of the four provinces was, in his opinion, not accidental. The Fathers of Confederation clearly had expansion in mind. They were thinking forward to further provincial annexations and consequently did not want to bind only the four provinces mentioned in

section 125. The articles “of any one of the provinces” were consequently to be admitted free into each of the other provinces, regardless of the date they formed part of the Dominion of Canada. 60 . Secondly, the words “into all ports in Canada” were deleted. This change also demonstrates that the framers of the Constitution were forward looking individuals. This change indicates that the Fathers of Confederation were thinking about land-based trade, not just water-based trade. Dr.

Smith testified that by getting rid of that restriction, the Fathers of Confederation were looking in the direction of a “more comprehensive economic union” (transcript, vol. 3, page 34). The drafting took into consideration that in the 19 th century, technology was advancing rapidly and had the effect of “shrinking” the world. Roads were being built. Huge bridges spanning great distances over rivers were being constructed, including one over the St. Lawrence River. Railroads were going to be connecting the provinces one to the other.

Electric telegraph was making it easier for businessmen to interact with each other over great distances. All of which prompted the Fathers to seek a more comprehensive economic union, “an attempt to create unfettered exchange”

and to “tie the hands of future generations of Canadian politicians, federal and provincial”, according to Dr. Smith (transcript, vol. 3, page 36). 61 . There is another important facet of this study into the wording used in the British North America Act, 1867 . In order to determine the intention of the drafters of

section 121, Dr. Smith referred us to legislation in the British colonies that were in existence prior to Confederation. Each of the colonies of Nova Scotia, New Brunswick and the Province of Canada had drafted legislation in an attempt to eliminate trade barriers between them. They had, according to Dr. Smith, passed laws “intended to set the legislative basis for a free trade agreement” (transcript, vol. 3, page 37). The Nova Scotia and the New Brunswick Acts in question were called

An Act in relation to the Trade between the British North American Possessions (S.N.S. 1848 (11 Vict.), c. 1 and SNB 1848 (11 Vict.) c. 9. The Province of Canada had a title even more telling:

An Act to facilitate Reciprocal Free Trade between this Province and the other British North American Provinces (S. Prov. C. 1850 (13 & 14 Vict.) c. 3) The New Brunswick legislation was passed March 30, 1848. It read as follows: “Whereas it is desirable that the Trade between the British North American Possessions of Canada, Nova Scotia, Prince Edward Island, Newfoundland, and New Brunswick, should be conducted in the most free and unrestricted manner; 1.

Be it enacted by the Lieutenant Governor, Legislative Council and Assembly, That whenever from time to time the importation into any other of the British North American Provinces hereinbefore mentioned, of all articles, the growth, production or manufacture of this Province (excepting Spirituous Liquors) shall by Law be permitted free from Duty, His Excellency the Lieutenant Governor, by and with the advice of Her Majesty’s Executive Council, shall forthwith cause a proclamation to be inserted in the Royal Gazette, fixing a short day thereafter, on which the Duty on all articles (excepting Spirituous Liquors) being the growth, production, or manufacture of any such Province as aforesaid, (excepting Spirituous Liquors) into which the importation of all articles, the growth, production or manufacture of this Province, shall be so permitted free from Duty, shall cease and determine; and from and after the day so limited and appointed, all such articles, the growth, produce or manufacture of any such Province, in such Proclamation to be named, (excepting Spirituous Liquors), shall be admitted into this Province Duty free, upon such proof of origin and character as may from time to time be required in and by any Order of the Lieutenant Governor in Council”. 62 .

Each of the Acts had similar wording. Dr. Smith referred to this as “reciprocal free trade” (transcript, vol. 3, page 38), through a complex mesh of lateral and multilateral agreements as between the North American provinces. He made the point that there were many people in British North America who were familiar with the principle of “admitted free from duty”. Certainly the politicians of the day, including the Fathers of Confederation, would have been aware of the difference between “admitted free” and “admitted free of duty”. 63 . The words “All articles of the Growth, Produce or Manufacture” found in

section 121 of the British North America Act, 1867 certainly mirror that found in the three proclamations in pre-Confederation Canadian provinces. I find that significant. In drafting our Constitution, Mr. Reilly used wording similar to the legislative language used in New Brunswick, Nova Scotia and Canada to propagate interprovincial trade between the provinces. Most importantly, he did not include the words free “from duty”. Dr. Smith stated that for contemporaries, the term “admitted free” had a different meaning than “admitted free of duty”.

To him, “admitted free” had a broader, more comprehensive, more robust meaning, referring to the expressions it “Has to be allowed in, has to be waived in” (transcript, vol. 3, page 39 and 40). This was no accident in his opinion. The use of the words “admitted free” strengthened the phrasing of the sentence to more accurately reflect the values, ideas and principles of the drafters of the British North America Act, 1867 . 64 . I will now examine the placement of

section 121 in the structure of the British North America Act, 1867 to determine if there are any significant conclusions that could be reached about its meaning based on its placement in the Act. 65 .

Section 121 of the Constitution Act, 1867 is in

Part VIII of the Act , under the heading “Revenues, Debts, Assets, Taxation”. These sections (102 to 126) dealt with sundry items such as the creation of a Consolidated Revenue Fund, the interest on provincial public debts, the salary of the Governor General, assets, debts, ownership of public property, grants to the provinces, the continuance of Customs and Excise laws, etc. 66 . Dr. Smith was of the opinion that the placement of

section 121 in

Part VIII of the Act was significant because it was disconnected deliberately from sections 91, 92 and 93 of the Act . These are the sections that deal with the distribution of powers as between the federal and provincial governments. These address jurisdictional questions.

Section 121 on the other hand is placed with what he referred to as “the physical side of Confederation” being division of assets, national debt and so forth (transcript, vol. 3, page 57 and 58). Dr. Smith was of the opinion that when the Fathers of Confederation were addressing the drafting of

section 121 of the British North America Act, 1867 , they were thinking about the revenue sources of governments, focusing on what would be a legitimate revenue source for a government and what wouldn’t.

Part VIII also deals with the transition from one form of government to another and involves a transition period.

67 . The prosecution takes the position that the 24 sections in

Part VIII are in generic terms referencing matters of revenue or money. It advances the theory that since

section 121 is placed in the same Part as sections 122 to 124, which deal with the continuation of certain customs and excise taxes and duties until they are altered by the new Government of Canada, the position advanced by Dr. Smith is not sustainable. 68 . I find neither the heading, nor the placement of

section 121 in

Part VIII of the Act to be of any particular benefit in arriving at a conclusion as to its meaning. The

section deals with the subject of trade as between the provinces. It had to be placed somewhere in the Act and its placement in

Part VIII was perhaps nothing more than not having another

Part in which to more appropriately place it. The various headings were as follows:

Part I: Preliminary;

Part II: Union;

Part III: Executive Power;

Part IV: Legislative Power;

Part V: Provincial Constitutions;

Part VI: Distribution of Legislative Powers;

Part VII: Judicature;

Part IX: Miscellaneous Provisions;

Part X: Intercolonial Railway and

Part XI: Admission of Other Colonies. Indeed, it would have been preferable to give the

section its own Part since it deals with a topic not neatly or clearly belonging to any of the others. 69 . Having closely examined the wording of the section, I conclude that there is nothing in the wording used in

section 121 of the Constitution Act, 1867 that would lead one to infer that the Fathers of Confederation intended to restrict the words “admitted free” to “admitted free of customs duties or charges”. Indeed, the opposite is the conclusion I would reach. The fact that the language used is similar to that found in provincial enactments in the provinces of Canada at the time and the fact that the

section does not use the words “free of duty” as is used in those provincial enactments and in other sections in the same Part of the British North America Act, 1867 have convinced me that the wording used in

section 121 suggests free trade, not “admitted free of customs duties or charges”. HISTORICAL CONTEXT 70 . I will now examine in some detail the historical context of

section 121 of the Constitution Act, 1867 . 71 . The

preamble to the British North America Act, 1867 includes the following two paragraphs: “Whereas the Provinces of Canada, Nova Scotia and New Brunswick have expressed their Desire to be federally united into One Dominion under the Crown of the United Kingdom of Great Britain and Ireland, with a Constitution similar in Principle to that of the United Kingdom: And whereas such a Union would conduce to the Welfare of the Provinces and promote the Interests of the British Empire…” 72 . This vision of the Dominion of Canada having a Constitution similar in principle to that of Great Britain plays a key role in the

interpretation of historical events giving rise to the proclamation of the British North America Act, 1867 . The Fathers of Confederation specifically espoused what was familiar to them and rejected any notion of an American-style of government. The influence of the governmental policies of Great Britain relating to administration, management and trade were key to what the Fathers wanted to accomplish here in Canada. The British North America Act , 1867 did not make any major break with colonial past. Independence from the United Kingdom was neither sought nor contemplated.

The newly-created Dominion of Canada remained a colony of the United Kingdom. Indeed, the resolve to remain attached to the United Kingdom was so strong that the Fathers of Confederation did not include an amending formula for the Act . Clearly they wanted continuity. 73 . According to Dr. Smith, they also wanted to create inter-colonial free trade. That, in fact, was an important motivation for Confederation. The historical background to be addressed in this part of my decision derives primarily from the testimony of Dr. Smith and from his report. The historical context was not disputed by the prosecution. 74 .

The positive benefits of free trade and the negative effects of trade impediments, also called “non-tariff trade barriers” were well known to the Fathers of Confederation and to the politicians in Great Britain during the events leading up to Confederation. Both shared the philosophy that the creation of a true common market embracing all of the North American colonies would be beneficial. 75 .

For the purposes of the trial in this matter, a “tariff barrier” was defined as a tax or a payment of money assessed on the basis of the weight or volume of the product or as a percentage of the value of the product entering the jurisdiction in question. It adds to the cost of imported goods and is one of several trade policies that a country can enact. A “non-tariff barrier” was not specifically defined but examples were given. They can come in a variety of forms, all of which refer to restrictions that result from prohibitions, conditions,

or specific market requirements that make importation or exportation of products more difficult or more costly. Government action in the form of laws, regulations, policies or restrictions can effectively increase costs and form non-tariff barriers to trade. 76 . There was a wide range of motives for the creation of a unified Canada, many of which related to economic development.

Since 1854, ten years before the movement towards Confederation began in earnest, the people in British North America – in those provinces now known as Ontario, Québec, Nova Scotia and New Brunswick – had prospered economically by exporting their natural products to the United States under the terms of the Reciprocity Treaty. It was a period of tremendous prosperity for the people of British North America. Lord Elgin on behalf of Great Britain and its North American colonies and the United States Secretary of State, William Marcy signed this Reciprocity Treaty on June 5, 1854.

Its effect was to eliminate customs tariffs thereby giving the North American colonists relatively unfettered access to the US market. The basic bargain was this: American fishermen were allowed to fish in British colonial waters and, in return, British North Americans got the benefits of free trade with the United States of America. They could send their timber, fish, minerals and agricultural products across the border into the lucrative US market. 77 . The economy of the British colonies surged ahead because of this relatively unfettered access to the US market.

It gave rise to a period of tremendous optimism in British North America and generated extensive economic development including, for example, the building of railways and the opening of banks. Notwithstanding some opposition in the United States, most Americans favoured the continuation of the Reciprocity Treaty. That changed, however, with the outbreak of the civil war in the United States, which lasted between April 12, 1861 and May 9, 1865. Many Americans perceived British North Americans as sympathizing with the Southern Confederacy.

Rightly or wrongly, they attributed blame to them for helping the south in the US Civil War. This resulted in the United States imposing a battery of non-tariff barriers for goods imported from the British colonies. 78 . US Customs officials began what has been described as the “search and detain” protocols. These had the effect of delaying the transporting of goods across the US border.

Increased paperwork, assertive inspections, passport requirements and other means were used to delay the crossing of goods, all of which resulted in increased costs to the exportation of goods to the US market, thereby constituting non-tariff barriers to trade. Between 1864 and 1865, there was increasing pressure emanating from the United States to abrogate the Reciprocity Treaty. British North American politicians complained bitterly about the search and detain protocols. However, being a colony and not a sovereign country at the time, they had no ambassador in the United States to speak on their behalf.

They turned to the British government for help. Lord Lyons, the Senior British diplomat in Washington at the time, spent a great deal of time attempting to resolve the issue. Indeed, he later recalled that during this period he spent more time dealing with British North American issues than he did with British issues. 79 . Dr. Smith emphasized the importance of this topic. This issue of non-tariff trade barriers and tariff trade barriers was uppermost in the minds of Canadian politicians during the constitutional moment.

The Fathers of Confederation clearly understood the distinction between the two because of current events giving rise to the repeal of the Reciprocity Treaty. 80 . Repeal required a 12-month notice period. In March 1865, notice was given. The Reciprocity Treaty ceased to be operative on March 17, 1866. As of that date, there was no longer free trade between the United States of America and the colonies of British North America. 81 . The vast majority of people in the British North American colonies wanted a return to reciprocity. Indeed, in the 1860s and early 1870s the government of John A.

M ac Donald repeatedly attempted to negotiate a new Reciprocity Treaty with the United States. His goal of restoring reciprocity enjoyed overwhelming support in Canada. The British government also wanted its North American subjects to be able to trade freely with the United States but were unable to achieve that end. This gave rise to a search for an alternate mode of economic development. The search was in earnest for alternative markets. The strategy adopted, according to Dr. Smith, was internal free trade within the boundaries of British North America. 82 .

During this time, British North Americans were also discussing their constitutional future. Discussions between the three Maritime Provinces, New Brunswick, Nova Scotia and Prince Edward Island, had been scheduled to take place concerning a political and economic union between them. The Fathers of Upper Canada (now Québec and Ontario) got wind of their discussions and attended the Charlottetown Conference for discussions between September 1 and September 7, 1864. This first conference brought together 23 delegates from Upper Canada, New Brunswick, Nova Scotia, and Prince Edward Island.

The Fathers from Upper Canada were able to convince the other provinces that if a union of their three provinces was a good idea, then the union between all provinces would be a better one. They discussed a comprehensive union that would include not only the provinces represented, but also the possibility of other provinces to be annexed over time. The Maritime Fathers ultimately agreed to the proposal. 83 . The discussions resumed at the Québec conference in Québec City between October 10 and 27, 1864.

This second meeting was attended by 33 delegates representing the original participating provinces plus two delegates from Newfoundland. The representatives expanded on the Charlottetown discussions, which resulted in a series of 72 resolutions known as The Québec

Resolutions . It was there that the Fathers of the Confederation drafted the first Constitution of Canada. 84 . These resolutions dealt in part with the distribution of powers between a new federal government and the provinces, the division of Upper Canada into two provinces to be named Ontario and Québec, and the financial structure of the new Dominion. It also required the new federation to build an intercolonial railway.

While the Newfoundland and Prince Edward Island representatives withdrew from the project, those from Nova Scotia, New Brunswick and Upper Canada agreed to submit the resolutions to their assemblies for approval. 85 . The third and final conference was held in London, England, from December 1866 to March 1867. It led to the adoption of the final version of The Québec Resolutions . The task of converting the rough plan of a proposed Constitution into a working enactment began.

The attending Fathers of Confederation were assisted by British politicians including Henry Herbert, the 4 th Earl of Carnarvon who in 1866 had been appointed Secretary of State for the Colonies, and, of course, Francis Reilly. 86 . The British, who were asked to present an enactment establishing a new country with a new constitution, were expected to express the resolutions in clear, eloquent legislative form. There followed various drafts of the sections to be proclaimed. The wording became more refined; sections were moved around and renumbered.

The British wanted the legislation to reflect the wishes of the Fathers of Confederation, mature and knowledgeable men who had a vision, who had the right to determine their own constitutional destiny and who sought a self-governing autonomous country that would continue to be part of the British Empire. 87 . The Canadian colonies were in good hands. The British had much experience and the required expertise to assist in the drafting of the proposed Constitution. At the time of Confederation, the British were considered to be experts in diplomacy and trade negotiation.

They knew how to write a document such as that sought by the British North Americans. 88 . The British North America Act , 1867 introduced into the British Parliament by Lord Carnarvon on February 12 and approved by Queen Victoria on March 29, 1867, creating the united provinces under the Dominion of Canada, was to take effect on July 1 of that year. 89 . The Fathers of Confederation wanted a strong, comprehensive economic union in addition to the political union it envisaged.

The 1860s were the high-water mark in the belief in free enterprise, in the idea that government should allow the private sector to operate with minimal regulation from government. This belief arose as a result of certain events in the 1840s. At about that time, the protectionist movement in Great Britain was being replaced by a grass roots movement towards a free market approach to the economy. There was continuous debate about the benefits of free trade in the British Empire during the period of time in question. By the 1850s, the debate had been conclusively settled. The consensus favoured free trade.

The British concluded that by eliminating trade barriers both internally and externally, and by letting the market operate freely, maximized rates of economic growth would result. By the 1850s, both political parties in Great Britain shared this view. It was not a partisan issue as it had been previously. After 1850, most goods entering the United Kingdom did so without paying any customs duties. The British government replaced the revenue that had previously been collected from regressive customs duties with an income tax paid by the top two percent of British families.

The concept of free trade became deeply entrenched in British political culture. In the 1860s, the quintessential British policy favoring free trade was recognized internationally. People associated Britain with free trade. Since the Fathers of Confederation were committed to remaining part of the British Empire, the British views on free trade would have been influential to them. 90 . That was the historical context during which

section 121 of the British North America Act, 1867 came into being. Having examined this historical context, I come to the conclusion that

section 121 was incorporated into the British North America Act, 1867 as a result of apprehension by the Fathers of Confederation at the prospect of financial losses anticipated to arise from the repeal of the Reciprocity Treaty with the United States and from the concomitant anxiety generated by a significant loss of an established market for goods produced in British North America.

The firmly established British movement towards free trade at the time of the constitutional discussions, together with the punitive losses brought about by the repeal of the Reciprocity Treaty would have had to have influenced the Fathers of Confederation to move in the direction of free trade. I have been convinced that their intent was to replace the loss of the free trade American market with a free trade Canadian market.

The strong and harmonious economic union envisaged by our Fathers of Confederation had to have been based on free trade, not on punishing internal non-tariff trade barriers, such as had been put in place by the Americans. The benefits to be realized by opening up the markets of each province to the products of the others would have been curtailed by allowing non-tariff barriers to be imposed by each of them. THE PRONOUNCEMENTS BY THE FATHERS OF CONFEDERATION 91 .

What was said by the Fathers of Confederation and British parliamentarians during the events leading up to March 1867 has also assisted this Court in determining what was intended to be accomplished by them.

92 . In the Confederation Debates on September 12, 1864, George Brown, a Father of Confederation, stated that he heartily endorsed Confederation because it would break down trade barriers and open up a new market. I quote: “…Union of all Provinces would break down all trade barriers between us, and throw open at once…a combined market of four millions of people. You in the east would send us your fish and your coals and your West India produce, while we would send you in return the flour and the grain and the meats you now buy in Boston and New York.

Our merchants and manufacturers would have a new field before them – the barrister in the smallest provinces would have the judicial honors of all of them before him to stimulate his ambition – a patentee could secure his right over all British America – and in short all the advantages of free intercourse which has done so much for the United States, would at once be open to us all”. 93 . In Ottawa, on November 1, 1864, Alexander Galt, another Father of Confederation, said the following: “Now we desire to bring about that same free trade in our own colonies.

It is almost a disgrace to us, if I may use the term, that under the British flag, in the dominions of our Sovereign in British North America, there should be no less than five or six tariffs and systems of taxation; and we cannot have trade between one Province and another without being subjected to all the inconveniences which occur in a foreign country. Surely it is our business to remove these difficulties, and we ought as subjects of the Crown, whose interests are identical, to be united”. 94 .

On November 23, 1864, in Sherbrooke, Québec, Galt explained the rationale for Confederation by stating that one of “…the chief benefits expected to flow from the Confederation was the free interchange of the products of the labor of each province”. He said Confederation would eliminate “restrictions on the free interchange of commodities as to prevent the manufactures of the rest from finding a market in any one province, and thus from sharing in the advantages of the extended Union”. 95 . John A.

M ac Donald, to be elected the first Prime Minister of Canada, in a speech on February 6, 1865, said: “…if we wish... to establish a commercial union, with unrestricted free trade, between people of the five provinces, belonging, as they do, to the same nation, obeying the Same Sovereign…this can only be obtained by a union of some kind between the scattered and weak boundaries composing the British North American Provinces”. 96 .

Again, on February 7, 1865, in a speech in the Parliament of the Province of Canada on the desirability of Confederation, Galt referred to the prosperity North American colonies enjoyed under the 1854 Reciprocity Treaty to demonstrate “the benefits of free commercial intercourse”. He stated that trade had increased between British North America and the United States, stating it “swelled from less than $2,000,000.00 to upwards of 20,000,000.00 per annum”.

He observed that “we are threatened with an interruption of that trade” because United States’ politicians would soon prove “hostile to the continuance of free commercial relations with this country”. Since the United States were soon to re-impose trade barriers he said “…it is the duty of the House to provide, if possible, other outlets for our productions. If we have reason to fear that one door is about to be closed to our trade, it is the duty of the House to endeavour to open another”.

He stated this could be accomplished by providing for “free trade with our own fellow-colonists for a continued and uninterrupted commerce which will not be liable to be disturbed at the capricious will of any foreign country”. He stated: “I believe the Union of these Provinces must cause a most important change in their trade. Union is free trade among ourselves. Perhaps insurmountable difficulties may prevent us carrying out any such thing whilst separated, but when united our intercourse must be as free as between Lancashire and Yorkshire.

The free intercourse between the States of the American Union – free trade in the interchange of products, has had more to do with their marvellous progress than anything that was put in their constitution. Give us Union and the East shall have free trade with the West”. 97 . George-Étienne Cartier, another Father of Confederation, argued in favour of Confederation on the grounds that it would ensure free trade between the North American colonies.

On February 7, 1865, he stated: “It was of no use whatsoever that New Brunswick, Nova Scotia and Newfoundland should have their several custom houses against our trade, or that we should have custom houses against the trade of those provinces”. 98 . On February 19, 1867, Lord Carnarvon said the following in the House of Lords: “Now these districts, which it may almost be said that nature designed as one, men have divided into many by artificial lines of separation.

The Maritime Provinces need the agricultural products and the manufacturing skill of Canada, and Canada needs harbours on the coast and a connection with the sea. That connection, indeed, she has, during the summer, by one of the noblest highways that a nation could desire, the broad stream of the St. Lawrence; but in winter henceforth she will have it by the intercolonial railway. At present there is but a scanty interchange of the manufacturing, mining, and agricultural resources of these several Provinces. They stand to each other almost in the relation of foreign States.

Hostile Custom Houses guard the frontiers, and adverse tariffs choke up the channels of intercolonial trade. There is no uniformity of banking, no common system

of weights and measures, no identity of postal arrangements. The very currencies differ. … Such then being the case, I can hardly understand that any one should seriously dispute the advantage of consolidating these different resources, and interests, and incidents of government under one common and manageable system”. 99 . Lord Carnarvon therefore referenced both tariff and non-tariff barriers to trade in the British colony in his speech to the House of Lords. 100 . On February 28, 1867, during second reading debate in the House of Commons in Great Britain, the Under-Secretary of State for the colonies, Mr.

Charles Adderley, spoke the following in regards to the proposed British North America Act, 1867 : “The commercial advantages are, perhaps, the most prominent, and the least open to question or dispute. The idea is absurd of retaining a system of different commercial tariffs amongst these contiguous Provinces which are ruining and keeping down their trade. Why, the effect of the reciprocity treaty between the United States and Canada was to develop the commerce between these countries in one year from 2,000,000 to 20,000,000 dollars.

That treaty has now ceased; but surely that is a reason why, at least amongst themselves, there should be the most perfect reciprocity. Well, then, as to their mutual interests, who can doubt that these three Provinces – the wheat-growing West, the manufactures Centre, and the fisheries and outlet on the coasts, are necessary to each other to make one great country jointly developing diverse interests. Was there ever, let me ask, a country so composed by nature to form a great and united community?

By their mutual resources – by the assistance of their different interests, they would make together a powerful and prosperous nation. As long as they remain separate they are a prey to the commercial policy of other nations, and mutual jealousies among themselves”. 101 . There were of course many debates and speeches leading up to Confederation. Only a small portion of them have been referred to by me. I believe however that the excerpts quoted demonstrate one of the principal motivations giving rise to the Canadian Confederation.

The colonies of British North America had lost, or were about to lose, access to the free trade they had enjoyed for years with the United States. The existing systems in the Provinces were hampering free trade as between them and something needed to be done to open up the movement of goods as between the provinces to replace the loss of that American market. They had in place “customs houses” impeding trade. In my opinion, the Fathers of Confederation wanted free trade as between their respective jurisdictions.

They also wanted to eliminate customs duties as between the provinces in order to open up the market for the movement of their goods. I conclude that to the Fathers of Confederation, the Union meant free trade, the breaking down of all trade barriers as between the provinces forming part of the proposed Dominion of Canada. The free movement of goods across provincial borders was, in fact, one of the major advantages the Fathers saw in Confederation. THE JURISPRUDENCE ON

SECTION 121 102 . Of singular importance to the determination of these matters is the precedent set by the Supreme Court of Canada in the Gold Seal case. The facts leading up to the release of that judgment are important, as the defence alleges impropriety by certain of its participants. They also allege it was wrongly decided. 103 . The Gold Seal company, a liquor merchant in Calgary, Alberta, carried on an interprovincial business throughout Canada as an importer, an exporter and a distributor of all kinds of wines, spirits and malt liquors.

On February 1, 1921, Gold Seal tendered to the Dominion Express Company packages of intoxicating liquors to be shipped to a person’s private dwelling outside of Alberta. Dominion Express refused. They stated that they would not carry their intoxicating liquors from Alberta to any person or corporation in Saskatchewan or Manitoba. They did this because the Government of Canada had enacted the Canada Temperance Amending Act , which came into force in Alberta just a few days previously. 104 .

Without going into detail about the steps that legislation had to go through in order to take effect, the end result was that the federal cabinet had to issue a proclamation bringing the Act into force in Alberta, then it required that the proclamation “…name the day on which…[the] prohibition will go into force”. The proclamation of the governor in council did not name the day on which the prohibition was to come into force. Gold Seal thereupon argued that the Canada Temperance Amending Act was not properly proclaimed. 105 .

The issue before the Supreme Court of Canada was whether or not the federal cabinet’s proclamation of the Act had complied with the requirements of

section 152(

g) of the Canada Temperance Amending Act . Factums filed by both Gold Seal and the Attorney General addressed that issue. Their factums did not address

section 121 of the British North America Act, 1867 . Oral argument in the

Supreme Court took place on May 10 and 11, 1921. Duri

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