Sales of Contraband Tobacco Even Higher in Canada
Published on December 28, 2009 8:32 AM
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A recent survey by Ontario scientists showed that as much as 50 percent of all cigarettes selling across the province had been smuggled and is illegal. Survey said that smokers are more interested in cutting their own expenses than helping the officials generate necessary revenues from tobacco industry. Thus, people are willing to purchase low-cost contraband cigarettes.
Both tobacco industry and public health authorities are highly concerned that every second cigarette bought in Ontario is counterfeit, what costs the budget at least $2 billion in lost taxes each year and makes the tobacco products much more available to minors, demolishing the efforts of anti-smoking campaigns.
Rick Bertolucci, head of Ontario Public Safety Ministry said that the tax losses triggered by black market of tobacco products cause huge and irreparable harm to provincial and even federal budgets.
Another Research carried out by Tobacco Manufacturers’ Council demonstrated the Ontario province is home to the highest rate of illegal cigarette sales, with 48.6 percent. Quebec occupied second place with 40 percent.
The volunteers from the National Coalition against Contraband Tobacco collected nearly 20.000 cigarette butts in school and college back yards across Ontario and concluded that more than 30 percent of them were counterfeit.
The Coalition was found several years ago by the National Association of Convenience Stores, that represents interests of thousands c’ store owners throughout Canada which complain they lose more than $100,000 each because of illegal cigarette sales, black market and Indian tax-free shops.
The tobacco industry analysts checked each cigarette butt gathered by volunteers in order to divide them on legal and counterfeit ones. The legal cigarettes made by local manufacturers bear a particular marking on the filters, so it was not difficult for analysts to separate them.
According to the survey Ontario and Quebec provinces account for almost 95 percent of illegal tobacco market across Canada. In aggregate, the nationwide rate of illegal cigarette sales is 33 percent.
Bartolucci stated that the rates are so shocking because people are eager to purchase cigarettes for $25 per carton evading taxes and going illegal in order to reduce their expenses, without thinking about the huge damage they make to their country. Public health groups are especially concerned by the spread of illegal cigarettes since these low-cost smokers entice adolescents into smoking.
Even more ridiculous in this situation sound the claims of anti-smoking organizations calling the governments of Quebec and Ontario to increase excise taxes on tobacco products. Anti-tobacco advocates keep stating that higher prices are the strongest deterrent for smokers and contribute to decline in smoking rates.
However, in reality the high tax policy works in the opposite ways, particularly in the provinces located in the proximity to the border and Indian reservation, since instead of giving up, smokers opt for inexpensive black market cigarettes. So, the government needs to act in another way, if they indeed want to make people give up smoking, and not simply seek to fill the treasuries.
