Since 2006, illegal tobacco has made up between 16.5% and 32.7% of the Canadian Market depending on the year.
The unlawful production, distribution and sale of cigarettes in Canada has reached unprecedented levels in recent years, creating challenges for public health officials, law enforcement, tax authorities, policy makers and the public.
According to the Royal Canadian Mounted Police (RCMP), there are over 50 illegal cigarette factories and over 300 smoke shacks in Ontario and Quebec situated, for the most part, on First Nations territories. As well, there are more than 175 groups tied to organized crime that are profiting handsomely from illegal tobacco.
The problem is exacerbated by excessive levels of tobacco taxation. A legal, taxed carton of 200 cigarettes costs $70-110, compared to $10-20 for the same number of illegal cigarettes.
Maintaining a favorable excise environment should be a key priority as tobacco tax increases fuel the growth of illicit supply from First Nations Reserves.
Contraband tobacco hurts all of us and has broad social, public safety and economic implications. The illegal sale of tobacco deprives Canadian governments of significant revenues, it finances criminal gangs and fosters other criminal activities, and it provides youth with easy and affordable access of tobacco products.
For more information:
Watch the video Smoke Out , CTV News, 2011.
Illicit usage of cigarettes-National study for the CTMC, GFK Research Dynamics, 2007, 2008, 2010
Nicholson, the Minister of Justice and Attorney General of Canada, Standing Senate Committee on Legal and Constitutional Affairs hearing on Bill S.16- an Act to amend the Criminal Code ( trafficking in contraband tobacco), May 1st, 2013
Testimony of the RCMP to the House of Commons Standing Committee of Public Safety and National Security, April 27, 2010
CD Howe commentary, No.350 “A taxing dilemma: assessing the impact of tax and price changes on the tobacco market; Irvine and SIMMS, 2012/ Contraband Tobacco in Canada: Tax Policies and Black Market Incentives, Fraser Institute, July 2010