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Moosehead president says lower taxes are the answer to cross-border beer issue

FREDERICTON – The president of Moosehead Breweries says until taxes on beer are reduced in New Brunswick, people will continue to cross the border to buy it for a lower price – but Finance Minister Roger Melanson says there are no changes planned.

Andrew Oland says his company faces numerous tariff and non-tariff barriers and would like to see free trade across the country.

Last week, the New Brunswick government announced it will appeal a court ruling in April that effectively removed limits on cross-border alcohol imports.

Judge Ronald LeBlanc tossed out all charges against Gerard Comeau, who was charged with illegally importing 14 cases of beer and three bottles of liquor from a Quebec border town in 2012.

Beer near the border in Quebec is about half the price charged in New Brunswick, but the Liquor Control Act prohibits anyone in New Brunswick from having more than 12 pints of beer that wasn’t purchased through a liquor store in the province.

“The root cause of the issue regarding the Comeau decision is the taxes on a dozen beer in Quebec are $2.50 and in New Brunswick they are $9.70. Until the taxes are reduced, this situation is not going to go away,” Oland said.

“Consumers are voting with their feet, which is what you would expect them to do in this situation when there is such a price differential between beer in one province and another.”

But Melanson said the revenues from the tax on beer are needed to pay for services like health care and education.

“NB Liquor is an important contributor in generating revenues for us to be able to support these programs and still invest in the economy,” Melanson said Wednesday.

“At this time we don’t plan to make any changes to the tax levels,” he said.

Oland said lost sales to Quebec cost his company about $10 million per year.

No date has been set for the government to appeal the Comeau decision.

In its notice of appeal, the Crown says the judge erred in his legal interpretation of section 121 of the Constitution Act in five places, including: “By finding that section 121 was drafted as an absolute free trade provision that constitutionally must be so rigorously so interpreted today, which finding is contrary to the principles of constitutional interpretation as established by the Supreme Court of Canada.”

The Crown said the judge also erred in his interpretation of section 134 of the Liquor Control Act.

On Monday, the federal Conservatives called on the Trudeau government to refer the Comeau decision to the Supreme Court for review.

Deputy leader Denis Lebel said the ruling needs to be referred to the Supreme Court so that Section 121 of the Constitution can be clarified.