Photo credit: Crain’s New York
We found this claim interesting. The National Coalition Against Contraband Tobacco (NCACT) is warning the province of Ontario that an increase in provincial tobacco taxes will fuel Ontario’s illegal cigarette industry, funding organized crime.
“There is already more contraband tobacco in Ontario than any other province, operated largely by organized crime,” said Gary Grant, a 39-year veteran of the Toronto Police Service and national spokesperson for the NCACT. “Already, a ‘baggie’ of 200 illegal cigarettes can cost as little as $8; more than $70 less than the price of legal product. A tax increase only makes this difference wider, and the criminal market more lucrative.”
According to a press release, the RCMP estimates that there are about 175 criminal gangs that use the cigarette trade to finance illegal activities including guns, drugs and human smuggling.
“Ontario’s lack of action has given the criminals that run the contraband tobacco industry free reign for too long. In contrast, tougher police powers in Quebec have allowed for more robust police action. Look at the Montreal example. Today, a major illegal cigarette bust was announced, with dozens of arrests tying contraband tobacco directly to the organized crime ring,” continued Grant. “If Ontario was serious about contraband tobacco, we’d see more arrests like those in Quebec, and not actions that will effectively fund organized crime.”
“We need to keep our communities safe. We need strong measures to eliminate this growing problem in Ontario,” conclude Grant. “Higher taxes that increase the price gap on tobacco do exactly the opposite.”
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Artificially inflating prices (whether for good cause or not) obviously will increase contraband and create markets for under the table, un-taxed goods. As a tobacco retailer (www.tobaccooutlet.ca, our little cigar shop in Calgary) we see it all the time; customers telling us cigars, shisha and even cigarettes and such are much cheaper at some little corner store. It is frustrating to explain that we are not willing to compromise or risk our business to offer smuggled products. The government creates this environment and hopefully will support honest stores through aggressive enforcement.