## Facts

- Labatt marketed “Labatt’s Special Lite,” a beer labelled as 4% alcohol by volume.
- Federal Food and Drug Regulations defined “light beer” as beer with materially lower alcohol content (generally 1.2%–2.5% by volume), setting detailed standards for beer categories.
- The Food and Drugs Act prohibited selling or advertising food in a false or misleading manner and authorized regulations prescribing standards of composition and related properties of foods.
- Labatt sought a declaration that its “Special Lite” label was not likely to be mistaken for regulated “light beer” and challenged the federal provisions’ constitutional application to beer.
- The trial court granted Labatt’s declaration; the appellate court reversed, finding a statutory breach and upholding federal validity; Labatt appealed.

## Issues

1. Whether Labatt’s “Special Lite” label contravened the federal prohibition on false or misleading food labelling, given the federal definition of “light beer.”
2. Whether the statutory and regulatory provisions prescribing beer standards were within federal legislative power or were invalid as applied to malt liquors because they intruded on provincial jurisdiction over property and civil rights.

## Decision

- The Supreme Court of Canada allowed the appeal.
- The Court held the beer-standard regulations invalid and held the enabling and prohibitory provisions ultra vires Parliament insofar as they applied to malt liquors (beer).
- Because the beer-standard scheme was constitutionally inapplicable to beer, it could not support a federal prohibition against Labatt’s “Special Lite” marketing for beer.
- A dissent would have upheld the provisions, primarily under the general trade and commerce power.

## Legal Principles

- Constitutional characterization turns on a law’s “pith and substance,” assessed by its main purpose and effects.
- Federal criminal-law power requires a prohibition with a penalty directed to a valid public purpose; a primarily regulatory product-standard and marketing scheme may fall outside that power even if penalties exist.
- The general trade and commerce power does not ordinarily support detailed regulation of production, composition, and local marketing for a single commodity or industry lacking a sufficiently national regulatory character.
- The peace, order and good government power does not justify detailed federal regulation of a locally oriented trade absent an emergency, a genuinely new matter, or a subject of national concern beyond provincial capacity.
- Product composition and marketing standards aimed at regulating local business practices generally fall within provincial property and civil rights jurisdiction unless a valid federal head of power clearly applies.

## Conclusion

The Court held that federal “light beer” composition and marketing standards were, in substance, regulation of a local industry and therefore unconstitutional as applied to beer; neither criminal law, general trade and commerce, nor peace, order and good government supported the scheme.


Labatt Breweries of Can. Ltd. v. Att’y Gen. of Can., [1980] 1 S.C.R. 914 (Can.)