Saturday, April 10, 2010

Illegal smoke sales at all time high.

One obvious issue that is overlooked is the huge differential between the cost of legal and illegal cigarettes because of the high taxes on the product. If there were less taxes the differential would come down and fewer would take the risk of peddling the contraband cigarettes. However given the amount of revenue governments get from these taxes and given the power of the anti-smoking lobbies this situation is not likely to change in the near future. Just think of it positively as a giant stimulus incentive to create employment in strategically located aboriginal communities. This is from the Globe and Mail.

Illegal smokes hit all-time high: group

From Friday's Globe and Mail

Parents, teachers and public health campaigns all tell teenagers the same thing: Don't smoke. But that message is facing increasingly fierce competition from an influx of cheap, readily available cigarettes sold in school yards, on street corners or on native reserves without proof-of-age requirements.

The availability of contraband cigarettes in Canada is widely considered to be at an all-time high, and represents one of the biggest threats to anti-smoking efforts, particularly among young people, according to a coalition of health organizations calling for immediate action from governments and police forces to get the problem under control.

“There are no excuses. The health of Canadian youth is significantly jeopardized here,” Marco Di Buono, director of research at the Heart and Stroke Foundation of Ontario, said at a press conference yesterday. “The government must act now and protect our children before it's too late.”

By definition, contraband tobacco products include those sold outside provincial and federal rules and taxes. While there are several types of contraband cigarettes sold in Canada, the biggest supply is considered to be those manufactured directly on native reserves. Health groups are also concerned about the growing prevalence of counterfeit cigarettes, which come into Canada illegally, usually through China.

Sgt. Jean-Marc Pich̩, a policy analyst with the national office for the excise and customs branch of the RCMP, said that in 2008, the RCMP seized 965,000 cartons of contraband tobacco Рthe highest year on record. That number crept even higher last year, with 975,000 cartons seized. Those numbers don't include contraband cigarettes seized by provincial police.

Sgt. Piché added that even though the bulk of the contraband tobacco originates in central Canada, it's often sold in the Atlantic provinces and in the western part of the country.

Although the problem of contraband tobacco is most pronounced in Ontario and Quebec, where the population concentration and strategic location of some reserves on the U.S. border makes product manufacturing and distribution easier, it's an issue that affects all Canadians. The RCMP says that a significant portion of the profits from contraband tobacco are used to fund illegal drug and firearms smuggling by organized crime.

But the Ontario Campaign for Action on Tobacco, a coalition of health organizations including the Canadian Cancer Society's Ontario branch, the Heart and Stroke Foundation of Ontario and the Non-Smokers' Rights Association, say not enough is being done to address this problem. Political inaction is fuelling growth of the contraband market, which is posing a growing risk to young people, who make up the prime market for illegal cigarettes.

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