In a seminal unanimous decision released earlier today, the Supreme Court of Canada clarified the scope of section 121 of the Constitution Act, 1867. Section 121, the Court ruled, prohibits measures which, in essence and purpose, restrict the flow of goods across the country. Conversely, measures having incidental effects on trade as part of broader regulatory schemes not aimed at impeding trade do not violate section 121.
David Wilson, Owen Rees and Julie Mouris intervened on behalf of five national supply management organizations (SM-5), arguing for a nuanced view of section 121 broadly in line with the Court’s ultimate ruling.
The Court rejected the interpretation advanced by Mr. Comeau and certain interveners, suggesting that the words “admitted free” in s. 121 create a constitutional guarantee of free trade. Such an interpretation, the Court noted, would have vast potential impacts for agricultural supply management, public health measures, environmental controls, and various other regulatory measures that incidentally impact on interprovincial trade. The Court upheld the constitutionality of the liquor monopoly provisions in the New Brunswick Liquor Control Act.
Comeau is a strong endorsement of the principle of federalism, and the related emphasis on balance and on the ability of each level of government to achieve its goals in the exercise of its constitutional powers.
Although it has only been the subject of a limited number of cases to date, s. 121 is likely to receive greater attention in future litigation.