OCSA Calls on Ontario Government to Act as Illegal Market Hits Convenience Stores

New report finds illegal cigarettes now make up as much as 53% of Ontario's market

OAKVILLE, ON, Nov. 3, 2026 /CNW/ -- The Ontario Convenience Stores Association (OCSA) is acknowledhing the Convenience Industry Council of Canada's (CICC) new report that confirms what independent store operators have lived with for years. OCSA is calling on the Ontario government to act on its findings.

The report, conducted by EY Canada for the CICC, estimates that illegal cigarettes now make up between 42 and 53 per cent of Ontario's cigarette market, up from 34 to 46 per cent three years ago. It found that Ontario lost an estimated $1.1 billion in revenue over the last three years. A legal carton of 200 cigarettes costs about $160 in Ontario, while an illegal carton often sells for less than $50.

"We commend the CICC for bringing these facts forward. This report puts a number on what Ontario is losing, but independent operators across Ontario have been feeling the consequences directly for years," said Kenny Shim, Chair of the Ontario Convenience Stores Association. "When a customer starts buying illegal cigarettes, we don't only lose that sale. We lose the coffee, the milk and the lottery ticket that came with it."

OCSA notes that while illegal cigarettes started the illicit market and remain at its core, the market has since expanded into vaping and nicotine pouch products.

"The people selling illegal cigarettes didn't stop there," said Shim. "Illegal vapes and nicotine pouches now move through the same underground market, outside any age check, tax or health regulation. Governments can't keep further regulating and restricting approved products while allowing the black market to flourish. Every new rule lands on the retailers who follow the law and does nothing to those who ignore it."

The cost to Ontario's family-run stores is substantial. EY found that legal cigarette sales in Ontario have fallen 46 per cent since 2019, a decline driven by the black market as well as people quitting and substitutes such as vapes and other smoking cessation products.

"The average Ontario convenience store is losing between $50,000 and $100,000 a year in sales to the illegal market," said Shim. "Few small businesses can absorb that. It's a big reason the number of legally owned and licensed convenience stores in Ontario has been steadily dropping. Governments, including the provincial government in Ontario, can no longer ignore this problem."

OCSA acknowledges the steps the Ontario government has already taken. Recent provincial budgets moved to raise fines for contraband tobacco and renewed the Ministry of Finance's partnership with the OPP's Contraband Tobacco Enforcement Team. The 2026 budget committed to examining stronger police authorities under the Tobacco Tax Act and to working with other governments on online contraband sales.

"We thank the Ontario government for these measures, and for recognizing the harm contraband does to legitimate businesses," said Shim. "But with illegal cigarettes now making up as much as 53 per cent of the Ontario market, much more needs to be done."

With Ontario projecting a $16.9-billion deficit this fiscal year, OCSA says the province cannot afford to keep losing this revenue. OCSA is calling on the Ontario government to make enforcement against the illegal market a provincial priority before placing further restrictions on legal, regulated products. That should start with delivering the stronger police authorities the province is examining. Quebec has shown that provincial action can work, keeping its illegal market well below Ontario's.

OCSA is also encouraging the Ontario government to follow Alberta's example and ask the federal government to reverse the 2024 ministerial order than banned the sale of Health Canada approved nicotine pouches in convenience stores. Since the ban, the market for this popular smoking cessation product has now been completely lost to the black market.

About OCSA: The Ontario Convenience Stores Association represents convenience store operators across Ontario, including thousands of independent, family-owned businesses. OCSA advocates for responsible retailing, effective age-verification standards, fair regulation and policies that support legitimate retailers while combating illegal sales of age-restricted products.

SOURCE Ontario Convenience Stores Association

Media Contact: Mr. Kenny Shim, [email protected], 416 414 6518