July 29, 2009
It was not that long ago one could attend many tobacco-country summer barbecues and meetings - particularly in Courtland, Langton, Delhi and Tillsonburg areas. Back then, young enthusiastic tobacco farmers were plentiful at these events, proudly describing their crop and the upcoming harvest.
As well, back then our corner stores across Haldimand and Norfolk and Brant relied on cigarette sales to anchor their businesses.
How quickly things change.
Over the past five years we have watched tobacco kilns crumble, fields shrink and the spirit of those farmers and store keepers extinguish, as illegal smoke shops and manufacturing flourish.
It didn't have to be this way.
Much of the problem was originally generated by increased taxation - from 2001 and 2006 tobacco taxes increased 192 per cent in Ontario -- opening the door for contraband.
Five years ago some of us started to speak out against the emergence of the rapidly growing illegal trade, and asked that governments, both federal and provincial, take action.
Today, while assets of the legal tobacco trade are being sold and the criminal market mushrooms, there are many in government who have either failed to recognize the problem or have no intention of resolving it.
Ontario's world-recognized tobacco control policies are collapsing around us with the market handed over to criminal organizations that are unregulated, untaxed and unenforced. Criminals don't comply with any of the tobacco control measures which include sales to kids, advertising, labelling, health warnings or emissions reporting.
Ontario now takes the crown with the highest percentage of illegal tobacco of almost anywhere in the world - 50 per cent -- surpassing countries like Pakistan, Nigeria, Zimbabwe, Brazil, Paraguay, Venezuela and Columbia. Quebec follows a close second at 40 per cent.
Over 90 per cent of Canada's illegal cigarettes are manufactured on reserves in Quebec and Southern Ontario. According to Benjamin Kemball of Imperial Tobacco, the majority of distribution is done off reserve and is conducted by organized crime who use the trade to finance drug and weapons trafficking, money-laundering and human smuggling.
The RCMP estimates the involvement of over 100 criminal groups.
Everyone from farmers, retailers, processors, manufacturers and the broader community suffer at the hands of these groups. In 2008, federal and provincial governments lost $2.4 billion in taxes. Hard working convenience store operators simply cannot compete with tax-free criminals and are losing $2 billion a year in revenue nationally.
This is a disgrace and law-abiding folks and businesses should be outraged. The risks and penalties associated with illegal smokes are minor, making the trade lucrative for criminals and those desperate to make fast cash.
Illegal tobacco is accessible and affordable to kids for pocket change, costs taxpayers billions in uncollected revenue, and contributes to the economic hardship of our retailers, while at the same time generating hundreds of millions in profit for organized crime.
While there are now probably no quick fixes, there are a number of measures that can be taken by the different levels of government to combat this threat to our local economy, the health of our kids, and our public safety.
Ontario is paralyzed by the inconvenient truth that our province has gone from first to worst with respect to tobacco control. It is well past time for government to roll up its sleeves and take action.
MPP Toby Barrett