Tobacco tax increase in the Nova Scotia Budget 2015: Fertile ground for contraband to flourish

OTTAWA, April 9, 2015 /CNW/ - The National Coalition Against Contraband Tobacco (NCACT) expressed disappointment today as the Government of Nova Scotia increased tobacco taxes by 4$ per carton in its 2015 Provincial Budget.

"Nova Scotia and Canada's Atlantic provinces must be extremely vigilant of their contraband tobacco problem. Across the country, tobacco tax increases have led to a widening of the price gap between legal and illegal cigarettes, making contraband tobacco a more accessible, more interesting and more available product," said Gary Grant, a 39-year veteran of the Toronto Police Service and national spokesperson for the NCACT. "This Budget misses another opportunity for Nova Scotia to adopt meaningful anti-contraband tobacco measures which could curb growing contraband-related tax evasion in the province and give police more powers, just like Quebec did when it cracked down on contraband in 2009. 'Baggies' of 200 illegal cigarettes can cost as little as $8, some $80 less than the price of legal product. A tax increase only makes the contraband market more lucrative for criminals who profit from the illegal trade and will profit even more so now," added Grant.

The RCMP estimates that 175 criminal gangs are involved in the contraband tobacco trade across the country, using those profits to fund their other criminal activities such as drugs and weapons smuggling, prostitution and human trafficking. According to Toronto's Centre for Addiction and Mental Health, contraband tobacco is also a prime source for youth smoking as illegal cigarettes are cheap, easily accessible, and the criminals who sell them don't check for ID, making a mockery of Canada's tobacco control policy.

Furthermore, while government projections often estimate tobacco tax increases will raise millions for the public purse, the inevitable associated growth of the illegal market has demonstrated that those projections are off. New Brunswick and Quebec, which have thriving illegal cigarette markets, both have had to revise tobacco tax revenue projections downwards after increasing cigarette taxes in 2013 and 2014.

"Nova Scotians need to remain extremely vigilant. The road leading from clandestine illegal cigarette factories in Ontario and Quebec goes through New Brunswick and to Nova Scotia. Organized criminals see cheap illegal cigarettes as an opportunity to bolster their profits using their already lucrative drug dealer networks. Given the context of their public finances, Nova Scotians need to give their police officers more powers to investigate contraband tobacco and their related organized crime illegal enterprises. Flourishing criminal activity and tax evasion make communities and taxpayers suffer while criminals prosper," concluded Grant.

The National Coalition Against Contraband Tobacco is a Canadian advocacy group formed by organizations and associations 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 and United Korean Commerce and Industry Association (UKCIA).


SOURCE National Coalition Against Contraband Tobacco (NCACT)

For further information: Michael Powell, (p) 1-866-950-5551, (m) 613-797-7313, (e)

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