A major advocacy group has accused Health Canada of driving smokers to contraband cigarettes by ignoring the illicit trade and treating it as if it didn’t exist.
“The government of Canada’s tobacco strategy will remain ineffective if illegal cigarettes continue to ignore all tobacco control measures,” said Rick Barnum, Executive Director of the National Coalition Against Contraband Tobacco (NCACT).
“If Health Canada believes that these health warnings will reduce smoking rates, they cannot ignore the illegal market across Canada, which is estimated to be 30% of the total market”.
Thirty percent would be a conservative number.
Spinoff studies in some northern Ontario towns and parts of Canada puts the number at closer to 50%.
No one has argued this.
Barnum knows of what he speaks.
Before taking on the job with NCACT, he was deputy commissioner of the Ontario Provincial Police (OPP,) and commander of the organized crime unit.
One of his last major busts was a doozy.
In the Ontario city of Barrie, in April 2019, OPP ended a 15-month probe with the seizure of 55 kilograms of pure cocaine hidden in a transport truck from California worth a street value of $5.5 million, said Barnum.
During the investigation, police also seized $800,000 in cash, a pick-up truck, a tractor trailer and three off-road vehicles, including two “high-end” side-by-sides and a snowmobile — all worth a combined $260,000.
The RCMP estimates there are some 175 criminal gangs in Canada that trade or sell contraband tobacco, often to obtain harder drugs and guns or fund human trafficking and money-laundering schemes.
“Basically, it’s a stable money-maker for those groups,” said Barnum. “You would rarely find an organized crime investigation where the group or individual weren’t involved in tobacco as well.”
Contraband tobacco refers to cigarettes and related products that are not taxed and are, therefore, significantly cheaper on the black market than cigarettes sold by licensed retailers.
For example, a pack of cigarettes can cost upwards of $20 in stores, while the same pack can be had for as little as $4 on the black market.
As stated, research commissioned by the coalition found as many as one in three cigarettes sold in Ontario are illegal, with most contraband smokes produced on Indigenous reserves and distributed nationwide.
By law in Ontario, First Nations members can buy tax-free cigarettes on a reserve for their personal use through what’s known as the “allocation system.”
Non-Indigenous smokers cannot legally buy untaxed allocation cigarettes, but in practice, smoke shacks and other on-reserve retailers see a brisk traffic in non-Indigenous smokers taking advantage of the discount.
Unlike plain packaging, Native-made cigarettes often carry no health warning—and certainly not on individual cigarettes—have colourful packaging, blatant brand advertising and raffles with cartons of cigarettes as the prize.
Just sit and watch, nothing is covert.
“We have warned the government on multiple occasions that it will be impossible for them to reach less than 5% tobacco use by 2035,” warned Barnum. “Without concerted effort against organize crime groups trafficking illegal cigarettes, any and all tobacco control measures will continue to be ignored and will continue to push smokers to the illegal market.”
Contraband tobacco accounts for over $2 billion in lost tax revenue across Canada. In Ontario, the epicentre of contraband tobacco, the government estimates that it loses over $750 million annually.
Due to high revenue potential, the illicit trade is also growing exponentially in British Columbia and Alberta, two provinces which Barnum has red-flagged.
The NCACT has been advocating for years for Ontario to take similar actions taken in Quebec, where they have seen an over 50% decline in contraband tobacco due to concerted law enforcement action.
The Government of Quebec reports that they have increased their tobacco revenue taxes by over $200 million due to specific action against illegal tobacco.
Ontario, meanwhile, has done nothing,
