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Illegal tobacco market is alive and well

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If you’re not a smoker or a convenience store retailer, you probably don’t think too much about the illegal cigarette market here in Newfoundland and Labrador.

And if you do, chances are pretty good that you view the sale of illegal cigarettes as a victimless crime — no one gets hurt.

Given the activity in Quebec recently, where hundreds of police conducted 70 raids and made 60 arrests against a major international crime ring dealing in illegal tobacco, maybe it’s time for a change in thinking.

Profits from the sale of illegal tobacco are as good as, or even better, than dealing in hard drugs. And the risk is a whole lot less. According to the RCMP, profits from illegal tobacco sales directly support other criminal activities.

Like it or not, there is a well-established illegal tobacco market in Newfoundland and Labrador. In late March, police in Nova Scotia seized more than a million illegal cigarettes that appeared to be destined for either Cape Breton or Newfoundland. That’s a lot of illegal product for Cape Breton, which makes Newfoundland a logical destination.

Ontario and New Brunswick are both creating dedicated contraband tobacco units modelled after Quebec’s Project Access, which has proven to be highly successful over the 10 years or so that it has been operating. The beauty of this approach is that it can be implemented at no additional cost to governments because the money comes from fines, seizures and growth in tax revenues when people who choose to smoke switch back to legal tobacco products.

Effectively managing the province’s tobacco tax is also a good way to put a dent in the illegal tobacco market.

Governments say that tobacco taxes are a smoking deterrent. In reality, tobacco taxes are a significant source of revenue. For the current fiscal year, the government of Newfoundland and Labrador is counting on some $157 million in revenue from the provincial tobacco tax.

The government’s next budget will be delivered next week. There will be a real need for more revenue, and one of the places that governments go looking for more money is through a hike in tobacco taxes.

Trouble is, the higher tobacco taxes go, the more it motivates smokers to simply switch to readily available and really inexpensive illegal product.

We all need to be part of the solution in dismantling the serious crime of illegal tobacco trafficking here and right across Canada. Let’s start by holding the line on tobacco taxes and looking at ways that government can get tough with illegal tobacco dealers. Let’s make it so that the risk far outweighs whatever profits there are in this illegal business.

To quote the RCMP: “Contraband tobacco is not a victimless crime, as possessing, distributing and purchasing contraband tobacco directly funds criminal activities.”

 

Mike Hammoud, president, Atlantic Convenience Stores Association

Dartmouth, N.S.

And if you do, chances are pretty good that you view the sale of illegal cigarettes as a victimless crime — no one gets hurt.

Given the activity in Quebec recently, where hundreds of police conducted 70 raids and made 60 arrests against a major international crime ring dealing in illegal tobacco, maybe it’s time for a change in thinking.

Profits from the sale of illegal tobacco are as good as, or even better, than dealing in hard drugs. And the risk is a whole lot less. According to the RCMP, profits from illegal tobacco sales directly support other criminal activities.

Like it or not, there is a well-established illegal tobacco market in Newfoundland and Labrador. In late March, police in Nova Scotia seized more than a million illegal cigarettes that appeared to be destined for either Cape Breton or Newfoundland. That’s a lot of illegal product for Cape Breton, which makes Newfoundland a logical destination.

Ontario and New Brunswick are both creating dedicated contraband tobacco units modelled after Quebec’s Project Access, which has proven to be highly successful over the 10 years or so that it has been operating. The beauty of this approach is that it can be implemented at no additional cost to governments because the money comes from fines, seizures and growth in tax revenues when people who choose to smoke switch back to legal tobacco products.

Effectively managing the province’s tobacco tax is also a good way to put a dent in the illegal tobacco market.

Governments say that tobacco taxes are a smoking deterrent. In reality, tobacco taxes are a significant source of revenue. For the current fiscal year, the government of Newfoundland and Labrador is counting on some $157 million in revenue from the provincial tobacco tax.

The government’s next budget will be delivered next week. There will be a real need for more revenue, and one of the places that governments go looking for more money is through a hike in tobacco taxes.

Trouble is, the higher tobacco taxes go, the more it motivates smokers to simply switch to readily available and really inexpensive illegal product.

We all need to be part of the solution in dismantling the serious crime of illegal tobacco trafficking here and right across Canada. Let’s start by holding the line on tobacco taxes and looking at ways that government can get tough with illegal tobacco dealers. Let’s make it so that the risk far outweighs whatever profits there are in this illegal business.

To quote the RCMP: “Contraband tobacco is not a victimless crime, as possessing, distributing and purchasing contraband tobacco directly funds criminal activities.”

 

Mike Hammoud, president, Atlantic Convenience Stores Association

Dartmouth, N.S.

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