OTTAWA, Nov. 18, 2014 /CNW/ - Edward R. Myers, formerly Editor of FrontLine Security magazine, has been tracking the contraband tobacco issue now for a couple of years. In the attached article, Myers examines the role of the Ontario government in dealing with the contraband tobacco issue.
Smoke and Mirrors
By Edward R. Myers
It looks like contraband tobacco has become the most recent hobby-horse for the Ontario Liberal Government. In his just released fall fiscal update the Ontario Finance Minister, Charles Sousa, ascribed a huge portion of the near term budget savings to the Ontario government's activities curtailing the prevalence of contraband tobacco.
How much will a crackdown on contraband tobacco add to the Ontario bottom line? An Ottawa CBC interviewer asked the Minister this question directly. Sousa waffled a bit and then suggested that some studies have put the number at $1 billion annually.
Meanwhile, this fall update is coincident with a lot of activity on the back roads of Southern Ontario as organized crime groups continue to move large amounts of illicit tobacco from the barns of farmers who feel they were cheated by the previous Liberal government that promised them contribution, with the federal government, to convert their fields from tobacco to another crop. The Ontario government reneged on the deal and the farmers are livid.
In the Ministry of Finance's background documentation to this fiscal update there is more hope given as the MoF claims, "The government's enhanced enforcement measures are expected to generate an additional $350 million over the next four years."
So far, the enforcement part of the Ontario government's little war on contraband has be more than just lacking – it has been a disaster!
In 2012, as reported in FrontLine Security magazine, the McGuinty government announced that because of the lousy job the Ontario Flue Cured Marketing Board had done in regulating the production side of the tobacco industry, the MoF itself would assume the oversight of the industry. It then announced it would need some time to sort itself out on how to implement the regulations so it granted the tobacco growers a year long extension on complying with licensing provisions that were meant to ensure that tobacco grown in Ontario does not get diverted to the black market. A year later, that "grace period" was extended to 2014 then again to January of 2015. As a result of this lack of oversight of raw leaf tobacco being grown each year farmers have been selling their product into the contraband market place. Both the Marketing Board and MoF have measured the harvest yields over the last four years and know much raw leaf has disappeared. The farmers themselves indicate "our community has lost its moral compass".
The truth is that all the blather that emanated from Sousa on the contraband tobacco issue boils down to a commitment he made to "taking further measures to address the supply of contraband tobacco. Fair is fair and these steps will help ensure that everyone plays by the "rules." In fact, many of the farmers appear to be flouting Canada Revenue Agency rules as well as they sell raw tobacco to the black market and don't claim the income on their tax returns.
The fact that the MoF says it will take steps to address the illegal supply side of the contraband tobacco problem leaves one with a "now show me" feeling. Now, by standing in the Ontario legislature and saying, "The government is taking action", Minister Sousa had better put his resources and backbone into finally fixing this key part of Ontario.
SOURCE: FrontLine Security
For further information: Edward Myers, 613-986-5756, [email protected]