New Brunswick Budget Makes Contraband Tobacco Worse

OTTAWA, Feb. 2, 2016 /CNW/ - The National Coalition Against Contraband Tobacco (NCACT) said that the New Brunswick government's decision to increase tobacco taxes by 6.52 cents per cigarette will only serve to fuel the province's growing contraband tobacco problem. The increase in taxes – more than $14 per carton when the increased HST is considered – is actually more than the cost of many illegal cigarettes.

"Illegal cigarettes are a growing and significant problem in New Brunswick, and an increase in the cost of legal product will only serve to make this problem worse," said Gary Grant, a 39-year veteran of the Toronto Police Service and national spokesperson for the NCACT. "The RCMP indicates that a steady stream of contraband tobacco is making its way into and through the province from factories in Quebec and Ontario. If anything, the smugglers are adapting their smuggling networks to make it even harder for police to disrupt their shipments."

The RCMP has indicated that smugglers have shifted to smaller shipments to avoid large busts, like that in late November where more than 1.5 million cigarettes were seized near Val-Doucet, along with guns and illicit alcohol. This makes it harder for law enforcement to keep up.

The budget did follow through on an earlier commitment to create a dedicated provincial anti-contraband tobacco enforcement unit. While this is welcome news, the NCACT believes that this should have been allowed to have real impact before making dramatic changes to the regulated industry.

"A dedicated law enforcement unit against contraband tobacco is certainly a step forward, but unfortunately the increase in tobacco taxes takes two steps back," said Grant. "New Brunswick would have been wiser to allow this new taskforce to disrupt the illegal networks before making dramatic changes to the regulated market. Large tax increases such as this shock consumers into seeking less expensive alternatives which is counter-productive to the province's contraband enforcement commitment. In fact, the government had estimated that anti-contraband efforts would have netted as much as $5 million more in taxes. That's unlikely to happen now."

Contraband tobacco is big business for organized crime. The RCMP have identified 175 criminal gangs are involved in the illegal cigarette trade. They use contraband tobacco as a cash cow to finance their other illegal activities, including guns, drugs and human smuggling. Tobacco smuggled into New Brunswick is largely produced at one of the 50 illegal factories that operate in Canada, each of which is able to produce as many as 10,000 cigarettes a minute. In Ontario and Quebec, an absence of early action against contraband tobacco allowed the problem to get out of hand. In Ontario, contraband cigarettes represent 1 in 3 of all cigarettes purchased.

"Ontario and Quebec have shown that contraband tobacco is not going to solve itself," concluded Grant. "Contraband tobacco undermines government tobacco control efforts. Ignoring the problem-or taking actions that only make smugglers jobs easier, will not work."

About NCACT
The National Coalition Against Contraband Tobacco is a Canadian advocacy group formed with the participation of businesses, organizations and individuals concerned about the growing danger of contraband cigarettes. NCACT members share the goals of working together to educate people and urge government to take quick action to stop this growing threat.

The members of the NCACT are: Association des détaillants en alimentation du Québec (ADA), Association des marchands dépanneurs et épiciers du Québec (AMDEQ), Canadian Chamber of Commerce, Canadian Convenience Stores Association (CCSA), Canadian Manufacturers and Exporters, Canadian Taxpayers Federation, Canadian Tobacco Manufacturers Council, Conseil du patronat du Québec (CPQ), Customs and Immigration Union, Échec au crime Québec, Fédération des chambres de commerce du Québec (FCCQ), Frontier Duty Free Association (FDFA), National Convenience Stores Distributors Association (NACDA), Ontario Chamber of Commerce, Retail Council of Canada, Toronto Crime Stoppers, United Korean Commerce and Industry Association (UKCIA), and National Capital Area Crime Stoppers.

SOURCE National Coalition Against Contraband Tobacco (NCACT)

Michael Powell, (p) 1-866-950-5551, (m) 613-797-7313, (e) [email protected]