The Last Exile

The Toronto Star is reporting the government has loss approximately $2.4 billion dollars in potential tax revenues from cigarette smugglers. There are some days where I think I live for these kinds of shoddy reports in our media. Either the reporter have a vested interest in parroting the government’s party line with no questions asked or the reporter is dumber than a bag of hammers. Pick your poison.

One in two cigarettes smoked in Ontario is illegal, robbing provincial and federal coffers of more than $2 billion a year and raising concerns about children gaining easy access to tobacco. “There’s absolutely no doubt that there’s an incredible amount of revenue lost both in the province of Ontario and Quebec and to the federal government as well,” provincial Community Safety Minister Rick Bartolucci said in an interview. A study for the Canadian Tobacco Manufacturers’ Council found that illegal cigarette purchases in Ontario have climbed to 48.6 per cent, followed by Quebec with 40.1 per cent.

(…)Ontario and Quebec represent about 95 per cent of illegal tobacco sales in Canada, and about 33 per cent of cigarettes sold in Canada are contraband, according to the manufacturers’ council study.
Bartolucci said the problem is so widespread because smokers do not realize purchasing untaxed cigarettes for as little as $20 for a carton of 200 cigarettes – compared to about $75 for legal products – is against the law.

I would interject that every single citizen who purchases contraband cigarettes knows its against the law but no longer gives a crap because the smoker’s perception is that the inordinately high taxation is way out of line with what individual smoker believes would be a fair punitive rate of taxation for smoking. Lower the taxes so a carton of cigarettes sells around the $35 dollar mark but why believe me when The Canadian Coalition for Action on Tobacco has a handy dandy solutions list for government to close revenue ‘gap’ – although, the unintended consequences will require increases in taxation to fund further demands placed on law enforcement officials to implement the list.

1. Work with the U.S. to shut down the illegal, unlicensed factories on the American side of Akwesasne.
2. Prohibit the supply of raw materials including raw leaf tobacco, cigarette packaging, filters and rolling paper, to anyone without a valid tobacco manufacturer’s licence.
3. Promote with First Nations the benefits of having a native tobacco tax equal to the provincial one.
4. Increase penalties substantially to deter would-be smugglers and manufacturers.

Of course, why should the US care? Its not their ‘crime’ issue and the local, state and federal levels of law enforcement officials in the US have more than enough crime to keep their officers busy without making new classes of criminals to accommodate the Canadian government’s funding needs. My favourite boneheaded suggestion has to be ‘promote with First Nations the benefits of having a native tobacco tax equal to the provincial one….good grief. All I can say to the last suggestion is to poise this question; how much has the war on ‘drugs’ cost us so far?