What is it with Canadian provincial restrictions on internal trade in beer? I blogged about one issue here. Now there's this:
On Tuesday, the Alberta budget included an overall five per cent liquor tax increase on top of the 10 per cent increase introduced by the former Tory government last spring. The latest increase is actually more for breweries outside of Alberta, Saskatchewan and British Columbia.
“It is actually a 20 to 30 per cent increase depending on where you’re from,” said Vern Raincock, the Alberta account manager for Garrison Brewing based out of Halifax.
...
Before Tuesday, breweries outside the western provinces were charged 20 cents a litre. Today, they’re paying $1.25 a litre.
“We’re supposed to have fair trade and free trade between each province and unfortunately what I see is preferential treatment provided currently to British Columbia, Alberta and Saskatchewan-based brewers to the tune of roughly $1.05 or $1.10 per litre,” said Raincock.
For specific details, you can see the liquor mark-ups on the Alberta government's web site.
There are so many possible violations here, it's hard to know where to begin!
First off, perhaps there is a constitutional claim that could be brought, in the hopes of finally getting the free trade part of Canada's constitution working property. Recall that there is already one such claim underway.
Then there is Canada's Agreement on Internal Trade, which allows for various claims against provincial trade barriers. There are concerns that this process doesn't work all that well, but I think it has been successful in a few cases.
And of course, there is the WTO. Recall that there were some successful GATT claims against Canadian provincial measures of this sort, brought by the EEC and the U.S. Presumably the measures here differ somewhat from the mark-ups at issue in those cases, but at least on the face of it, the issues appear to be similar.
Finally, perhaps there is an ISDS claim somewhere in here as well. Let's say, for example, there are some U.S.-owned companies who produce beer in one of the disfavored Canadian provinces. I think they probably have some good arguments under NAFTA Chapter 11 related to national treatment/fair and equitable treatment violations.
Thanks to Derek James From of the Canadian Constitution Foundation for the tip.