Canada: Alberta Laying the Foundation for Contraband Tobacco Problem

Source from:  Canada NewsWire 03/27/2015

With today's release of the Alberta budget, the National Coalition Against Contraband Tobacco (NCACT) is concerned that the government's decision to increase tobacco taxes risks fueling contraband tobacco in the province.

"Alberta should be mindful of the hard lessons that other Canadian jurisdictions have learned by ignoring contraband tobacco," said Gary Grant, a 39-year veteran of the Toronto Police Service and national spokesperson for the NCACT. "Ontario and Quebec created a fertile environment for the illegal cigarette trade to flourish, and are now home to hundreds of illegal smoke shacks and dozens of illegal cigarette factories. By not acting early, the problem has entrenched in these provinces and become needlessly difficult to solve. Alberta is not immune to this trend: an attempt to establish smoke shacks in the province, including 6 million illegal cigarettes, is still working through the courts."

Contraband tobacco is any tobacco product that does not follow all provincial and federal regulations or does not pay all required excise taxes. Illegal cigarettes are often sold in resealable plastic bags of 200 sticks. These "baggies" can cost as little as $8 each, about $80 less than legal product in Alberta. They are often sold directly to consumers through a drug dealer system; there are also more than 300 "smoke shacks" that illegally sell contraband in nearby major communities in Ontario and Quebec.

"Illegal cigarettes fund organized crime," continued Grant. "The RCMP estimates that there are about 175 criminal gangs in Canada that use profits from contraband tobacco as a cash cow to finance their other activities, including guns, drugs and human smuggling. Its low price and easy accessibility make it a key source for youth smoking. In fact, a study by the Centre for Addiction and Mental Health found that contraband tobacco was a factor in stubbornly high youth-smoking rates."

There are 50 illegal cigarette factories operating in Canada, each capable of producing as many as 10,000 cigarettes a minute. The high-profits of the trade have allowed criminals to look beyond Ontario and Quebec, the epicentre of the problem, and into the Maritime and Prairie Provinces.

"Ontario and Quebec provide an important case study in what happens when you create an environment where contraband tobacco can flourish, but do nothing to stop it. As with anything, stopping an entrenched problem is harder than preventing one in the first place," concluded Grant. "Alberta should be mindful of this and not let contraband tobacco get out of control in the first place." Enditem