Trade

Trade creates wealth. See Adam Smith, The Wealth of Nations (1776). The world’s wealthiest nation, the U.S.A., is the most successful economic union in world history.

Russell David “Russ” Roberts is an economist and a research fellow at Stanford University’s Hoover Institution. Roberts states that self-sufficiency is the road to poverty. Roberts in a podcast elaborates on the economic theories of Adam Smith and David Ricardo to explain how specialization and trade creates wealth and how radical self-sufficiency leads to poverty.

Trade restrictions reduce the benefits of trade for consumers. Adam Smith condemned government restrictions that restricted an economic activity for the benefit of a group of trades or companies.

The benefits of trade were apparently well known by those who drafted the Canadian Constitution. Section 121 states:

“121. All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces”.

In 1954 I was a student in a law school class on Constitutional Law taught by Bora Laskin (later Chief Justice of the Supreme Court of Canada). The course as I remember it, did not include any mention of trade or civil rights but was limited to the division of powers between the Federal Government and the provinces.

I recently became familiar with Section 121 when I read the decision of New Brunswick Provincial Court Judge Ronald LeBlanc in the case of R. v. Comeau dated April 29, 2016, 448 N.B.R.(2d) 1. Comeau brought beer he purchased in Quebec into New Brunswick because it was cheaper in Quebec. He was charged with violating the N.B. Liquor Control Act and was fined $292. Judge LeBlanc acquitted Comeau on the ground that the offence was unconstitutional because of s. 121 of the Constitution Act.

Judge LeBlanc stated in his decision that existing case law erroneously limited the application of s. 121 to restrictions such as customs duties or interprovincial tariffs.

R. v. Comeau is now on appeal to the Supreme Court of Canada. A large number of interested persons want to intervene in the case – see CBC News, September 26, 2017, “Tracadie Man’s Beer Case Before Supreme Court Overflows with Potential Interveners”.

Adam Smith stated in The Wealth of Nations that the division of labour is limited by the extent of the market (see page 9). It is possible that freer trade between the provinces could lead to an increase in the prosperity for all Canadians.