New Brunswick Misses the Mark Again: Tobacco Tax Hike is a Shortsighted Cash Grab

MONTREAL, Feb. 2, 2016 /CNW/ - The Government of New Brunswick has closed its eyes to the reality of illegal activity in the province in the misguided hopes of lining its empty coffers on the backs of smokers.

"For over a decade we have been telling governments the same message: increasing tobacco taxes will only fuel the illegal market and not result in the financial windfall you expect," said Eric Gagnon, Director of Corporate Affairs at Imperial Tobacco Canada. "The case of New Brunswick proves our point. Even after three increases to tobacco taxes in the last 10 years it has never collected the forecasted revenue. I predict today's $6.52 increase will be no different."

The province increased tobacco taxes in 2004 and missed its targets for the four subsequent years. The province increased tobacco taxes again in 2012 and has yet to hit its revenue targets. In 2014, the province increased tobacco taxes and in 2015 missed its mark by seven percent.

"I have to imagine that the smokers of New Brunswick will be furious today," said Mr. Gagnon. "This budget digs deep into their pockets for no return. Smokers will simply turn to the illegal market."

Illegal tobacco sales in New Brunswick continue undeterred. The RCMP has stated in a recent Telegraph Journal article that there "has been little change in the steady stream of contraband tobacco products smuggled into New Brunswick from other provinces, notably Quebec and Ontario.

"While we are pleased that the province has fulfilled its promise of creating a dedicated enforcement unit for illegal tobacco, it would have more of an impact had the government held off on the tax increase," said Mr. Gagnon.

SOURCE Imperial Tobacco Canada

Lauriane Ayivi, Torchia Communications, 514-288-8290 ext. 233, [e-mail]; Kathleen Stelmach, Torchia Communications, 416-341-9929 ext. 227, [e-mail]