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Wine is on display at a B.C. liquor store in Vancouver on Dec. 19, 2008.Jonathan Hayward

The group representing British Columbia's wine industry has told the Alberta Gaming and Liquor Commission it will challenge the constitutionality of the Prairie province's ban on B.C. wine imposed earlier this month.

The British Columbia Wine Institute sent a letter to the AGLC on Wednesday with notification that it will file an application next week seeking an emergency hearing date at the Court of Queen's Bench of Alberta in early March. Miles Prodan, president and chief executive of the Wine Institute, said the group believes it's unconstitutional to prohibit the import of Canadian goods into another province based solely on where they come from.

Read more: Alberta-B.C. pipeline feud strains provinces' intertwined economies

"It's urgent so we're seeking an immediate injunction," Mr. Prodan said. "We're doing it very reluctantly."

The move marks another round in a battle that began on Feb. 6, when Alberta Premier Rachel Notley announced she was instructing her province's alcohol regulator to block about $70-million worth of B.C. wine imports. It was retaliation for proposed B.C. rules that would effectively prevent Kinder Morgan Canada Ltd.'s Trans Mountain pipeline expansion.

Neither side is showing any sign of backing off.

The Alberta government views the Trans Mountain project as key for developing oil export markets beyond the United States, and argues Ottawa, not the provinces, has jurisdiction over the approval of the pipeline. However, B.C. Premier John Horgan has long said his government will defend the coast from increased oil tanker traffic, and has the right to consider measures to protect the environment from the effects of any potential diluted bitumen spills.

In an interview, Mr. Prodan said he's not talking to the B.C. government specifically about settling the pipeline dispute. "Our industry has nothing to do with that – we're farmers and wine makers," he said. "But free trade is critically important."

However, Mr. Prodan said the B.C. wine ban instituted by Alberta has already had an effect on many of B.C.'s 276 wineries and 923 grape growers. Based on surveys of members, the group believes the collective tally of lost revenue has already reached $1-million.

"It's really cutting off the lifeblood for a lot of our small, family-run B.C. wineries," he said, noting wineries are worried about the ban's effects on tourism, as well as losing their market share in Alberta liquor stores and restaurants.

"Once B.C. wine is sold out and you can't sell any more, that shelf space gets allocated to someone else, and that's a loss for B.C. And it's a long-term prospect trying to get back on the shelf."

The letter from the Wine Institute's lawyer to the AGLC states: "The AGLC must surely appreciate that a prohibition on the importation of any Canadian good based solely upon its province of origin raises serious constitutional issues, that irreparable harm will be suffered if this ban is not immediately lifted, and that the balance of convenience favours lifting the ban until the constitutional issues are determined."

The Wine Institute's action follows B.C. Jobs Minister Bruce Ralston's announcement on Monday the province has formally requested that the wine dispute be sent to tribunal under the Canadian Free Trade Agreement. The trade agreement allows for penalties of up to $10-million to be levied, but Mr. Ralston said there would first be at least a 120-day period provided for talks between the two provinces before the dispute would escalate to a tribunal hearing.

Mr. Prodan said the wine industry supports that move by the B.C. government but will also take the legal action.

Alberta Economic Development and Trade Minister Deron Bilous said Wednesday members of the Wine Institute have only suffered a short time in the current trade spat while Alberta oil producers have been waiting years for access to international markets – and have lost out on tens of billions in revenues.

The minister said if need be, Alberta will meet the Wine Institute in court, and the province is still considering other retaliatory measures aimed at B.C. On Wednesday, the Alberta government also ran "Keep Canada Working" pro-pipeline ads in B.C. newspapers.

"The only way we're going to back off is if they smarten up to quit holding Alberta hostage and allow Trans Mountain to be built," Mr. Bilous said.

"We are prepared to fight them in court, at a trade tribunal, or anywhere," he added. "We're going to be fighting B.C. tooth and nail on this."

Before all alcohol products are sold to licensees in Alberta, they are stored in AGLC warehouses. On Wednesday, the AGLC said it had about two weeks of B.C. wine supplies – or about 81,000 cases – left before it would run out of boxes to ship to provincial liquor retailers.

Premier Rachel Notley says a task force will advise Alberta on possible next steps in a trade spat with B.C. over the Trans Mountain pipeline expansion.

The Canadian Press

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