The Canadian Wheat Board, agricultural marketing boards and provincial liquor monopolies may be open to legal challenge

June 15, 2011, Ottawa, ON – In the latest paper from the Macdonald-Laurier Institute, senior commercial litigator and energy lawyer Ian Blue argues that a single wrong-headed legal decision from Canada's distant past has obscured and virtually destroyed our Constitution's strong guarantees of free trade within the country. This argument implies that many of the existing barriers to the free movement of goods, including provincial liquor monopolies, agricultural marketing boards, the Canadian Wheat Board, provincial product regulations, and others, are not only inefficient but unconstitutional and subject to legal challenge before the courts.

In Free Trade within Canada: Say Goodbye to Gold Seal, Mr. Blue argues that section 121 on the Constitution Act 1867 was deliberately worded by the Fathers of Confederation in such a way as to guarantee free movement of goods and services across provincial borders. He shows how a single decision of the Supreme Court in 1920, the Gold Seal Limited v. The Attorney General of the Province of Alberta case, created a wrong-headed precedent that has led to severe limitations in free trade among provinces — the exact opposite of the intentions of the founders of Canada.

Blue states that "a purposeful interpretation of section 121 would not prevent appropriate government regulation." It would, however "prohibit would-be schemes to interfere with a free interprovincial market."

He supplements this legal and economic analysis with an examination of the historical record, showing that there are ample reasons to think that the process by which the Gold Seal decision was arrived at violates the rules of judicial independence.

Ian Blue concludes, "There is no question from the wording, legislative history, scheme, or legislative context that section 121 is meant to create free internal trade and rightly so. Next time section 121 comes before the Supreme Court, Gold Seal should be decisively overruled and the barriers it has upheld should be dismantled."

Ian Blue is a senior counsel and advisor at Gardiner Roberts LLP in Toronto, Ontario.