Canada: Ontario Retailers Expect Significant Rise in Illegal Tobacco Sales

Source from:  MarketWired  02/13/2014

The Ontario Convenience Stores Association (OCSA) and its 7,000 retail members are urging the provincial government to maintain current tobacco tax rates, following an increase in the federal excise tax on tobacco products.

"Increased taxes on tobacco products punishes law-abiding retailers, and does nothing to address the issue of contraband tobacco," said Dave Bryans, CEO of the Ontario Convenience Stores Association. "Ontario must not inflame this problem excise tax hike by increasing their own tobacco taxes."

Contraband tobacco is sold without mandated health warnings and without age-verification checks to anyone who is willing to buy. Increased taxes and regulations drive the tobacco market underground, meaning these products are both more affordable and accessible to youth.

"We have seen an increase in the presence of illegal tobacco at hospitals and high schools across Ontario - places where no one should be smoking, period," stated Bryans. "Communities such as London, Windsor, Niagara Falls, and even parts of the GTA are losing ground to the illegal tobacco trade."

Ontario's convenience store retailers are urging the province not to follow suit with the federal government by hiking provincial taxes on tobacco products. Instead, the OCSA is asking that the provincial government follow through on previous commitments to enhance enforcement to stop the illegal market from expanding. The Association is also asking the province to consult further with retailers on this public safety issue, and work with all levels of government to address Canada's illegal tobacco problem.

"We want to work with the Ontario government to address youth access to tobacco and the illegal tobacco market. Raising taxes is not the way to do this," emphasized Bryans. "Tax increases may appear to be a short-term gain for governments, but the consequences faced by provincial law enforcement, communities and our small businesses that accompany these increases are felt for much longer." Enditem