Liberals flip flop on illegal tobacco issue

Liberal government turns a blind eye to Quebec's illegal tobacco problem in first budget

MONTREAL, June 4, 2014 /CNW Telbec/ - In raising taxes on legal tobacco products in its latest budget, the Quebec government has decided to ignore the illegal tobacco problem in the province, flip flopping their previously stated stance on contraband tobacco and the impact of increasing tobacco taxes.  The government has sent a clear message of impunity to criminals running the illegal tobacco trade, as they push a new wave of consumers to the cheap, unregulated market. 

"It is utterly shocking that the Liberal government, who took the issue of contraband tobacco very seriously under its previous leadership, has now decided to take a different direction – an irresponsible direction that tells criminals that it is okay to infiltrate our communities and sell illegal products." said Eric Gagnon, Director of Corporate Affairs at Imperial Tobacco Canada. "The Liberals were the first to be up in arms and to criticize the Parti Québecois after increasing tobacco taxes only 18 months ago."

Given the availability of cheap illegal products, raising tobacco taxes is an irresponsible, short-sighted political cash grab decision by the government of Québec. This is the third tax increase imposed on tobacco consumers in 18 months, following the Parti Québecois increase, then the Federal increase last February.  It is simple economics, when you increase the price of an already expensive legal product a certain portion of consumers will seek a cheaper alternative.  In this case, the cheaper alternative is readily available through a multitude of criminal networks on every street corner.

"We understand that the government is looking for a quick way to fill its coffers. Unfortunately for the government, as history has shown in Quebec, raising tobacco taxes will only drive smokers to illegal, untaxed sources. The government will not reap the reward it expects," concludes Gagnon. "It seems that the Liberals have finally caved in to the small but vocal anti-tobacco lobby groups, whose primary goal is to eradicate the legal industry at all costs, regardless of the impact on the illegal tobacco trade."

The Government of Québec is already losing more than $225 million, according to government sources, every year because of illegal tobacco sales. Increasing taxes on tobacco products will only make a bad situation worse. There are more than 200 smoke shacks in Québec that are now ready to meet increased consumer demand this tax increase will generate.

SOURCE: Imperial Tobacco Canada

For further information: Sebastien Dolan, Corporate Affaires, 514-932-6161 ext: 2222, www.imperialtobaccocanada.com


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