OTTAWA, Oct. 28, 2015 /CNW/ – Yesterday’s Alberta budget raised serious alarm bells for the National Coalition Against Contraband Tobacco (NCACT). The NCACT is concerned that the government’s decision to increase tobacco taxes without any accompanying measures for greater contraband tobacco enforcement will result in a rise in illegal cigarettes in the province.
“Alberta should have taken a serious look at other provinces like Ontario where contraband tobacco is not being controlled and the problem is out of control,” said Gary Grant, a 39-year veteran of the Toronto Police Service and national spokesperson for the NCACT. “Ontario and Quebec have created fertile environments for the illegal cigarette trade to flourish, and are now home to hundreds of illegal smoke shacks and dozens of illegal cigarette factories. By not setting up safeguards first, the problem is now deeply entrenched in the criminal framework. A cigarette manufacturer based in Kahnawake, Quebec – an infamous contraband tobacco hot spot – has announced its intention to open a factory near Brooks, just east of Calgary. They’ve already indicated an interest in selling locally in Alberta. That means contraband tobacco is on its way.”
Contraband tobacco is any tobacco product that does not follow all provincial and federal regulations or does not pay all required excise taxes. Illegal cigarettes are often sold in resealable plastic bags of 200 sticks. These “baggies” can cost as little as $8 each, about $80 less than legal product in Alberta. The $5/ carton tax increase makes this price disparity even more glaring, leading consumers to cheaper alternatives which are illegal. The RCMP also notes there are also more than 300 “smoke shacks” that illegally sell contraband in nearby communities in Ontario and Quebec.
“Illegal cigarettes fund organized crime,” continued Grant. “The RCMP estimates that there are about 175 criminal gangs in Canada that use profits from contraband tobacco as a cash cow to finance their other activities, including guns, drugs and human smuggling.”
There are 50 illegal cigarette factories operating in Canada, each capable of producing as many as 10,000 cigarettes a minute. The high-profits of the trade have allowed criminals to look beyond Ontario and Quebec, the epicentre of the problem, and into the Maritime and Prairie Provinces.
“Ontario and Quebec provide an important case study in what happens when you create an environment where contraband tobacco can flourish. In Ontario alone, 1-in-3 cigarettes purchased over the last year were illegal,” concluded Grant. “As with anything, stopping an entrenched problem is harder than preventing one in the first place and Alberta should be mindful of this and not let contraband tobacco get out of control.”
The National Coalition Against Contraband Tobacco is a Canadian advocacy group formed with the participation of businesses, organizations and individuals concerned about the growing danger of contraband cigarettes. NCACT members share the goals of working together to educate people and urge government to take quick action to stop this growing threat.
The members of the NCACT include: Canadian Convenience Stores Association (CCSA), Retail Council of Canada, Canadian Taxpayers Federation, Canadian Tobacco Manufacturers Council, National Convenience Stores Distributors Association (NACDA), Canadian Chamber of Commerce, Frontier Duty Free Association, Fédération des Chambres de Commerce du Québec (FCCQ), Conseil du Patronat du Québec (CPQ), l’Association des marchands dépanneurs et épiciers du Québec (AMDEQ), Toronto Crime Stoppers, Quebec Association of Food , Quebec Crime Stoppers, The Customs & Immigration Union (CIU), the Ontario Chamber of Commerce, and the Canadian Manufacturers and Exporters.