Of Beer and Borders
Alberta Loses Another Round In Its Support of Alberta Craft Brewers
Right now, Alberta Premier Notley and her government are thinking "stupid laws!", because they can't seem to get around the ones that affect subsidies or grants for Alberta craft brewers. Alberta's latest attempt, its 2016 Small Brewers Development Program (SBDP) has been struck down as a non-permitted obstacle to interprovincial trade, under the rules of the 1995 Canada-provincial Agreement on Internal Trade (the AIT).
In a 150 paragraph decision, publicly released June 11, 2018, the AIT Appeal Panel concluded that the SBDP monthly grant available only to Alberta brewers clearly gives them a competitive advantage over non-Alberta brewers, and therefore creates "less favourable treatment" and an "obstacle to trade", contrary to Article 401 and 403 of the AIT. The AIT does contain some exemptions and exceptions for certain province-specific incentives or investment programs, but the AIT Appeal Panel found those exemptions or exceptions don't apply to the SBDP. Alberta has been given until November 29, 2018 to remove the SBDP, or somehow make it compliant with the AIT.
If you don't have any paint you can watch dry, you can read the whole decision here: Artisan Ale Appeal Report
Alberta craft brewers are painfully aware that differences between liquor regulation in different provinces have historically put them at an economic disadvantage. Alberta's open borders regarding alcoholic beverage sales allow the products of brewers from other provinces and other countries to flow easily into the Alberta market. Not so in the other direction. Because the governments of other provinces still exercise control over the listing of alcoholic beverages that can be sold there, they can choose to be selective on what to list, and so in effect can favour their own provincial products.
Alberta Finance Minister Joe Ceci's reaction to the AIT Appeal Panel decision is that Alberta may now become more aggressive in challenging such practices by other provinces. Or the province may get creative with other types of support for the industry.
Alberta's current AIT wrist-slap for an unfair beer trade policy is ironically a result of being a leader among Canadian provinces in having the most open borders for alcoholic beverages. Alberta is the only province in Canada to have fully privatized its alcoholic beverage market (it did so in 1993), which means the Alberta government has left it solely to private business to decide what alcoholic beverages will be imported and sold in Alberta.
The party who started, and has now won, this AIT complaint process against the Alberta government only adds injury to that irony. The complainant is Calgary, Alberta beverage importer Artisan Ales, a presumably successful business that exists because of alcohol-sale privatization in Alberta.
The further kick in the policy pants for Alberta is the recent Supreme Court of Canada decision regarding New Brunswick's successful prosecution of amateur beer importer Gerald Comeau. The SCC decision establishes that maintaining a government-controlled alcohol sales system can create a valid exception to constitutionally required free-trade obligations between provinces. Except Alberta no longer has such a system – so the SCC Comeau decision only helps the provinces that are already restricting Alberta beer imports, while Alberta still seeks ways to keep home-grown brewers afloat in a sea of freely available craft beer from elsewhere.