Feds blamed for increase in contraband tobacco 
Business leaders call on feds to do something about increase in contraband tobacco across Canada.

Mike Campbell

May 27, 2024

At the Alberta Chamber of Commerce AGM in Red Deer, business leaders called on the federal Liberals to address the increasing sale of contraband tobacco across the country that’s frequently shipped through Canada Post.

Feds blamed for increase in contraband tobacco 

The event comes on the heels of Alberta Gaming, Liquor & Cannabis’s (AGLC) recent seizure of several crates of contraband tobacco, pushing lost federal tax revenue past $10 million in the last nine months in Alberta alone.

Following the AGM last week, a statement from Ron Bell of Rothmans, Benson & Hedges Inc. (RBH) pointed to the “over 35 million contraband cigarettes” seized.

“We know contraband is controlled directly by gangs and other criminal organizations, and often when contraband tobacco is seized, illegal drugs including cocaine and fentanyl are also found,” Bell said. 

“Resources are needed”

Bell further called on the feds to do something about the growing problem, something that the National Coalition Against Contraband Tobacco (NCACT) and the Convenience Industry Council of Canada (CICC) are aligned on.

Western Vice-President of the CICC, Sara MacIntrye, told The Counter Signal in an interview that the feds “don’t have a national contraband strategy.”

“Our stores are closing,” she said, noting that small business owners of convenience stores such as Circle K, 7-11, and Parkland are losing out the most.

Some provinces taking steps

She further noted that “some good things are happening” at the provincial level, such as Alberta recently forming a new working group on contraband tobacco, Saskatchewan introducing The Tobacco Tax Amendment Act, and Ontario announced increased penalties for contraband sellers in its 2024 budget. 

But MacIntrye said the Trudeau Liberals are taking a “haphazard approach,” noting that they give next to nothing to the RCMP.

Nothing in the Liberals’ 2024 budget mentions an intention to take on contraband tobacco. Instead, the government boasts about raising the taxes on legal cigarettes by $5.49 per carton.

According to the NCACT, this will increase the flow of illegal cigarettes.

“By raising taxes on cigarettes, the federal government is only pushing more struggling Canadians into the illegal market,” NCACT Executive Director Rick Barnum said in April.

Barnum also said the estimated tax revenue loss is up to $2.47 billion in Canada “over the last several years alone.”

“It is time for the federal government to take the illicit market seriously, and dedicate funding to police forces to focus on curbing the illicit tobacco industry,” Barnum said.

The federal department of Public Safety did not respond to a request for comment. 

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