Janet Nauta

November 28, 2002

Quebec’s long-standing refusal to lift a ban on butter-coloured margarine is now being challenged on two fronts.

Quebec’s long-standing refusal to lift a ban on butter-coloured margarine is now being challenged on two fronts. Both the Ontario government and Unilever Canada are fighting to have Quebec remove this inter-provincial trade barrier.

Butter-coloured margarine has been illegal in Quebec since 1987, when legislation was enacted to protect Quebec’s 10,000 dairy farmers from competition. Quebec is the only province – and one of the few jurisdictions in the world – still enforcing a ban on coloured margarine.

In 1994, under the terms of the Agreement on Internal Trade (AIT), Quebec agreed to get rid of its margarine-colouring restrictions by September, 1997. However, it backed down from this obligation after an aggressive campaign by the powerful dairy lobby.

In April, after more than four years of non-productive negotiations between the Ontario and Quebec governments, the two provinces agreed to pursue a dispute resolution procedure allowed under the AIT. Manitoba, Saskatchewan and Alberta had agreed to support Ontario’s challenge of Quebec’s law. Unfortunately, Quebec has recently reneged on this commitment. Without the participation of both parties, the dispute process can not continue.

Unilever Canada Ltd. is also challenging the ban on coloured margarine in Quebec’s Court of Appeal. In March, lawyers for Unilever, argued that the regulation prohibiting butter-coloured margarine is discriminatory, protectionist, and contravenes interprovincial and international trade rules. Unilever is appealing a 1999 Quebec Superior Court ruling that upheld the ban, but admitted that the prohibition is protectionist and not necessary to prevent confusion among consumers.

Unilever, which makes Fleischmann’s, Monarch, and Becel margarines, says it incurs about $1-million annually in additional costs because of the ban, including the costs of having separate production runs and inventories for margarine shipped to Quebec from its plant in Rexdale, Ontario.

Although a decision in the Unilever case was expected in September, judges have not yet made a ruling. And the saga continues.

This is Janet Nauta, Communications Assistant for the Ontario Soybean Growers.