Press Release: New Alberta Brewers Subsidy is an Unconstitutional Trade Barrier

Press Release: New Alberta Brewers Subsidy is an Unconstitutional Trade Barrier

The Government of Alberta today released the terms and conditions of its recently announced Small Brewers Development Program. As the Canadian Constitution Foundation (CCF) anticipated, this program does not solve the legal problems that the Government of Alberta created on October 28, 2015 when it enacted a protectionist tariff in violation of the “free trade” provision of the Canadian Constitution.

Under the latest version of the province’s scheme, Alberta brewers – and only Alberta brewers – will receive a rebate equal to the new across-the-board markup on beer sales up to 150,000 hectolitres. Out-of-province brewers will have to pay the full mark-up without a rebate. This preferential treatment is an unconstitutional tariff barrier, which will make beers from across Canada immediately more expensive and will almost certainly reduce the selection available to Alberta consumers.

Section 121 of the Constitution Act, 1867 says that products from each province must be “admitted free” into every other province. As a result, no province is permitted to erect a barrier that impedes interprovincial free trade.

There are many ways that a provincial government can support small businesses and encourage start-ups, but the one thing it cannot do is shield them from competition from out-of-province businesses by imposing barriers to trade. And that is exactly what the Government of Alberta continues to do.

In a free and open beer market, consumers are the big winners. Competition and choice keep prices low and drive local breweries to produce better products. It’s good policy. But that is not the CCF’s primary concern: our mission is to defend the Constitution, and when governments ignore it, we are here to hold them to account.

As CCF Executive Director, Howard Anglin, said of today’s announcement:

‘Free trade between Canadian provinces benefits consumers and producers alike, while current interprovincial trade barriers cost our economy as much as $130 billion a year. This is precisely why the Canadian Fathers of Confederation wrote a guarantee of interprovincial free trade into Section 121 the Constitution. Today, the Government of Alberta has once again shown its ignorance of our Constitution and its disregard for Alberta consumers.’

The Canadian Constitution Foundation (“Freedom’s Defence Team”) is a registered charity, independent and non-partisan, whose mission is to defend the constitutional freedoms of Canadians through education, communication and litigation.