Tackling Contraband Tobacco Act

An Act to amend the Criminal Code (trafficking in contraband tobacco)

This bill is from the 41st Parliament, 1st session, which ended in September 2013.

Status

In committee (House), as of June 13, 2013
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.

This enactment amends the Criminal Code to create a new offence of trafficking in contraband tobacco and to provide for minimum penalties of imprisonment for repeat offenders.

Similar bills

C-10 (41st Parliament, 2nd session) Law Tackling Contraband Tobacco Act

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other S-16s:

S-16 (2024) Law Haida Nation Recognition Act
S-16 (2004) First Nations Government Recognition Act
S-16 (2004) An Act to amend the Copyright Act
S-16 (2003) An Act to amend the Constitution Act, 1867 and the Parliament of Canada Act (Speakership of the Senate)
S-16 (2001) Law An Act to amend the Proceeds of Crime (Money Laundering) Act

Votes

June 13, 2013 Passed That, in relation to Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco), not more than one further sitting day shall be allotted to the consideration at second reading stage of the Bill; and that, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration at second reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:30 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, we just actually renewed the federal tobacco strategy here in 2012, and we are going to continue to work on tobacco control. This is aimed to preserve the gains we have made over the past 10 years and to continue the downward trend of smoking prevalence.

As the member mentioned, the worst part of tobacco use is cancer and the horrible way it impacts upon people's lives and all that we have to deal with in losing loved ones because of the cancer caused by cigarette smoking.

It is not just cancer. We are talking about respiratory diseases and heart illness. One cigarette contains more than 4,000 chemicals. We know that 70 of those are carcinogenic, and they contribute to numerous forms of cancer. We have to make sure that does not happen.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:30 p.m.

NDP

Nycole Turmel NDP Hull—Aylmer, QC

Mr. Speaker, I would like to know what measures the Conservative government plans to take in order to ensure that if minimum sentences are applied, the provinces and the federal government have the means, the resources and the space to accommodate all these people.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:30 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, the bill does provide for co-operation between Attorneys General across this country as we have seen in other pieces of legislation. The federal Attorney General and provincial Attorneys General would be coordinating any problems they may see in increases in imprisonment in provincial jails.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:30 p.m.

NDP

Christine Moore NDP Abitibi—Témiscamingue, QC

Mr. Speaker, I asked my colleague a question earlier and said that I quit smoking 10 days ago. I appreciate the warm applause I received from most of the members in the House. I think that if everyone got that kind of encouragement when they quit smoking, far more people would do it and feel motivated. I wanted to thank my colleagues before starting my speech.

Today, I will be speaking to Bill S-16 on tackling contraband tobacco. The purpose of the bill is to add offences to the Criminal Code, particularly with regard to contraband tobacco. The bill also introduces minimum sentences, among other things.

The 2012 National Assembly of Quebec study on measures to counter the use of contraband tobacco found that:

In 2007, more than one-third of the cigarettes smoked in Quebec and Ontario were contraband and over 90% of these illegal cigarettes came from aboriginal reserves and lands.

It is important that we not take these statistics lightly. These are alarming numbers, and I think they are also cause for concern when it comes to health and safety.

The provisions being introduced by the government seem superficial or do not reflect all the issues associated with contraband cigarettes. We want this matter to be addressed in committee so that we can understand and clarify all the related issues.

We must think more comprehensively. Contraband cigarettes are one part of the overall issue of smoking. I think it must be addressed in a much more comprehensive, societal manner. We must adopt a holistic vision. Contraband is a symptom. It is one factor that reveals a whole.

This increasing production and distribution meet a consumer demand. Why is that demand growing? Why is contraband growing?

First we have to understand that demand among young people is high because prices are low. Cigarettes are unfortunately readily available and everywhere. It is much easier for a youth to get hold of contraband cigarettes than cigarettes purchased in the legal market, if you compare the two products. Legislation has been made tougher. Stiff fines can be levied on food markets, and they will no longer take the risk of selling to young people. However, dealers in contraband cigarettes have taken advantage of this by the back door. That causes another problem.

Info-tabac.ca has offered an explanation regarding young people:

While legally sold cartons cost approximately $60, smokers can buy 200 aboriginal cigarettes (the equivalent) for one third of the price. In addition to being available to anyone who wishes to buy them, including minors, these “discount” packs do not carry any health warnings.

This unconditional permanent availability at lower prices is the crux of the problem. It undermines health, but also safety and the economy. The situation results in major monetary losses for various countries and monetary losses for businesses and authorized resellers.

Furthermore, the Association des détaillants en alimentation has noted that cigarette sales have fallen by 30% to 50%. We would be very happy if there had been a similar decline in smoking, but there has unfortunately been no significant reduction in tobacco consumption. Sadly, it even continues to increase.

According to that same association, sales of contraband tobacco are still rising at a tremendous pace and now exceed legal tobacco sales. The result is a genuine social and economic crisis. Criminal groups control most of the market. The rise in tobacco use by young people is caused by the low price and high availability of illegal tobacco.

Tax revenues from tobacco sales in Canada have fallen by nearly $2.4 million, and there have been job losses as a result of the thousands of convenience stores that have closed since trafficking in contraband tobacco began.

This illegal trafficking is also alarming from a public safety standpoint because of uncertainty over the content of these cigarettes—the chemicals they contain—and unfortunately because of the growth in illegal rings in the area. These trafficking rings often have targets because this is a financing method for them. However, they do not merely engage in cigarette trafficking; they also traffic in drugs and weapons. In my opinion, these two factors pose even greater threats to our security both nationally and internationally.

Our approach to combating contraband has to change. First of all, it is fundamentally important to consult the provinces, the territories and first nations communities. In its study on measures to combat illegal tobacco use, the Public Finance Committee of Quebec's National Assembly recommends:

That the Government of Quebec create a joint commission involving five parties, namely the governments of Quebec, Ontario, Canada and the United States as well as the Mohawk nation, to fight contraband tobacco and to develop an action plan dealing...with: A “win-win” agreement among the governments and aboriginal people to stop the large-scale tax-exempt sale of tobacco to non-aboriginal people...

I think we need to apply this logic at the federal level so that we can get to the crux of the issue and understand expectations. The 2009 report of the Government Task Force on Illicit Tobacco Products stated:

...any comprehensive attempt to address the domestic tobacco situation in Canada will require the participation and collaboration of First Nations communities.

In order to fight contraband effectively on the ground, we need to work in partnership with the communities that are most affected, just as we need to work with aboriginal people, youth and people faced with social challenges or living in poverty.

We can also target youth with public awareness and information programs on contraband cigarettes. We can do more to protect minors. Of course, it is already illegal to sell tobacco to minors, but we can do more to highlight the dangers of smoking.

One of the measures is to work with grassroots campaigns spearheaded by associations, neighbourhoods, merchants and relatives. We must work together with those who are already in the field, with those who are directly involved.

A study of the problem giving rise to the bill requires a comprehensive strategy at the federal level, in conjunction with the groups that are affected and involved. We must facilitate a dialogue in order to find possible courses of action and ensure consistency in the measures implemented.

In my opinion, if we send the bill to committee, we will have an opportunity to hear from witnesses and experts who have legitimate experiences to share. I sincerely hope the committee will do some very good work, so that we can adopt a holistic approach that is a great deal more comprehensive than what is set out in the current bill. We must not only work with grassroots groups on the ground, but also with law enforcement authorities to make sure we have enough police and they are able to get to the root of the problem efficiently.

There must also be better control at borders and for that, unfortunately, we need more people. Because of recent cuts, it is increasingly difficult for teams of border officers to play a part in this campaign.

We must think in terms that are much broader than those in the current bill and set up a global strategy that takes into account all the stakeholders who are doing everything they can to fight the problem, a strategy that maintains or increases staff in the Canada Border Services Agency and one that preserves funding allocated to the police.

One of the measures to be taken involves resolving the paradox between the lack of preventive action and the elimination of smuggling. Unfortunately, people still talk about the law of supply and demand, so it is appropriate to take action that reduces the demand.

We need to do more to encourage people to stop smoking so that, when they realize that smoking costs too much, they do not turn to smuggled cigarettes but rather to smoking cessation help.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:40 p.m.

Blackstrap Saskatchewan

Conservative

Lynne Yelich ConservativeMinister of State (Western Economic Diversification)

Mr. Speaker, I listened to the member talk about what this bill would do, but I believe that she missed the primary target of this new offence, and that is organized crime and the organized crime groups that are involved in the large volume trafficking of contraband tobacco. In her speech this evening, I did not hear her address the real issue and the real primary target of the legislation, and that is organized crime.

Would she please speak to that?

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:45 p.m.

NDP

Christine Moore NDP Abitibi—Témiscamingue, QC

Mr. Speaker, I am sorry that my colleague was not able to hear the whole of my speech. I said very clearly that this benefits organized crime, organizations that also deal in weapons and drugs. I did say that these dangers were even greater and that criminal organizations are not content with merely being involved in contraband tobacco.

I do not know why she did not hear this part of my speech, but I think I expressed myself very clearly. I am really quite astounded that she did not understand.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:45 p.m.

Liberal

Kirsty Duncan Liberal Etobicoke North, ON

Mr. Speaker, I remind my colleague that almost half the world's children breathe air polluted by tobacco smoke. Tobacco kills someone every six seconds and kills up to half of all users. It is a risk factor for six of the eight leading causes of death in the world. According to Physicians for a Smoke-Free Canada and the Non-Smokers' Rights Association, existing laws were not enough to prevent industry from achieving a significant delay in the implementation of new health warnings.

In her opinion, has the federal government addressed all elements of the global tobacco treaty?

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:45 p.m.

NDP

Christine Moore NDP Abitibi—Témiscamingue, QC

Mr. Speaker, I do not have the treaty in question in front of me, so it is difficult for me to answer the question.

However, with regard to young people, I would like to mention a point that I did not have a chance to discuss in my speech. Children who are exposed to second-hand smoke can also be influenced by the example they have in front of them and start smoking. Young people often smoke in secret. It is very hard for them to say openly that they have made a mistake and that they would like to stop smoking and get help.

When you do not have enough money to buy cigarettes legally, or at market prices, it is easier to buy illegal cigarettes than to find help to stop smoking. It is not necessarily easy to get help.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:45 p.m.

NDP

François Pilon NDP Laval—Les Îles, QC

Mr. Speaker, my daughter lives in Oka. When I go to visit her, I go past stands with signs saying “Illegal Cigarettes” in big letters.

No one is arrested, because the police, due to the lack of resources, cannot arrest people who sell illegal cigarettes right now, even if they do have big signs.

Does my colleague think that, without funding, this bill will do anything to change this state of affairs?

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:45 p.m.

NDP

Christine Moore NDP Abitibi—Témiscamingue, QC

Mr. Speaker, that is one of the essential points I stressed in my speech.

The funding must be part of an overall approach. We cannot merely put legislative measures in place; we must also allocate funding to tackle the problem. Border agent positions have been eliminated, but tobacco often moves across borders.

If we really want to tackle contraband tobacco, we must not only address the legal aspect, but also provide funding for the agencies that work to combat it. We also have to talk about tobacco addiction and do more prevention so that fewer and fewer people smoke and demand for these products shrinks. We also have to improve access to resources that will help people to stop smoking.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:45 p.m.

Newmarket—Aurora Ontario

Conservative

Lois Brown ConservativeParliamentary Secretary to the Minister of International Cooperation

Mr. Speaker, I am very pleased to be here tonight to speak to Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco).

This important legislation would fulfill our 2011 platform commitment to address trafficking in contraband tobacco by creating mandatory minimum terms of imprisonment for repeat offenders and establishing a new dedicated RCMP anti-contraband force of 50 officers.

This commitment was not made in a vacuum. The illicit trafficking of tobacco is a multi-billion dollar business that fuels organized crime and corruption and leads to addiction to what is widely accepted to be a deadly product. The illegal commerce in tobacco is so profitable that tobacco is well on its way to becoming the world's most widely smuggled legal substance.

If passed, Bill S-16 would equip the RCMP and our courts to deal more effectively with the scourge represented by the proliferation of these illicit tobacco products in Canadian society. These products, many of which are counterfeit or manufactured in unregulated and illegal facilities, often contain impurities and contaminants that add to the dangers already posed by smoking.

These illicit tobacco products are being sold in great quantities to teenagers and younger Canadians at a time when we as a society are strongly discouraging smoking due to the long-term and serious health risks it poses. The sale of illicit tobacco continues to represent a source of danger to the health of Canadians. This alone argues for strong measures of the type proposed in Bill S-16.

Importantly, the illegal nature of the production and distribution of contraband tobacco products means that they also escape Canadian taxes. This is one reason why they can be sold at discount prices. Clearly, this undermines the capacity of our tax system at the very time that the Government of Canada is working hard to balance our books in a responsible and effective way.

Before I get into the details of Bill S-16, I propose to give members a brief background on how the current law operates, why it needs to be changed and what the bill would do.

At the outset, I would observe that there are at present no provisions in the Criminal Code dealing directly with trafficking in contraband tobacco. Instead of being prosecuted under the criminal law, contraband tobacco is dealt with under the Excise Act. Although it contains prohibitions and penalties, the primary focus of this legislation is on revenue-related issues.

The range of tobacco-related activities the Excise Act prohibits includes the possession and sale of tobacco products not properly stamped. This means tobacco products for which the appropriate taxes and duties under subsection 32(1) have not been paid.

Contravention of this provision is punishable by fine. The size of the fine depends on the amount of tobacco involved. A jail term may also be imposed and may be up to a maximum of five years on indictment or 18 months on summary conviction.

While there have been successful prosecutions and seizures of illicit tobacco products and the vehicles used to transport them, it is indisputable that the problem persists and that it continues to grow despite the best efforts of law enforcement. In short, the strong measures proposed in this bill are necessary due to the serious nature of the challenges posed by trafficking in contraband tobacco.

Allow me to remind members that the current challenges are different from those of 25 years ago when the problem first gained national prominence in Canada. At that time, the issue was the criminal diversion of legally produced and exported Canadian tobacco products back into Canada at discounted prices.

Although the problem abated temporarily, it has returned over the past 10 years in the renewed form of the illegal manufacture of tobacco products and the illegal importation of foreign tobacco products.

There are many sources of illegal tobacco products on the Canadian market now: counterfeit cigarettes imported from overseas; cigarettes produced legally in Canada, the United States or abroad and sold tax-free in Canada, which is a recurrence of the issue we faced 25 years ago; and fine-cut tobacco imported illegally, mostly from the United States.

Most of the illegal activity involved in trafficking contraband tobacco in Canada occurs in Ontario and Quebec, and involves various organized crime groups that have established distribution networks that use violence, intimidation and bribery. They also use the income generated from contraband tobacco production and distribution to fund other criminal activities and to establish links with other criminal organizations. Clearly, strong measures are required.

This brings me back to the details of Bill S-16, also known as the tackling contraband tobacco act. What does this important bill propose?

First, it would create a true criminal offence by amending the Criminal Code to include a provision to deal with activities ranging from the sale, offer for sale, possession for the purpose of sale, transportation, distribution and delivery of contraband tobacco.

Second, it would set out a series of escalating penalties to send the message that this form of illicit trade will be dealt with sternly. The maximum penalty for a first offence would be up to six months of imprisonment on summary conviction and up to five years of imprisonment if prosecuted on indictment. However, repeat offenders convicted on indictment of this new offence would be sentenced to a mandatory minimum jail term of 90 days on a second conviction, a mandatory minimum jail term of 180 days on third conviction, and a mandatory minimum jail term of two years less a day on subsequent convictions.

The triggering quantity of contraband tobacco for this new offence and these new penalties would be an amount equal to or greater than 50 cartons or 10,000 cigarettes, or an equivalent amount of other unstamped tobacco products. This threshold has been chosen on the basis of the experience of the RCMP in dealing with tobacco smuggling.

Generally, only the provinces prosecute Criminal Code offences. However, in order to allow federal prosecutors to prosecute this new offence, a concurrent jurisdiction clause is proposed to be added to the Criminal Code. This is true criminal law. It is strong medicine for a serious national disorder. The primary target of this new offence and penalty scheme is organized crime groups and their associates who are involved in the large volume trafficking of contraband tobacco. In short, this important bill proposes a strengthened anti-contraband enforcement strategy that includes real jail time for repeat offenders in order to address the growing contraband tobacco market in Canada. These measures are timely and would be an effective way of dealing with this illicit and dangerous commerce.

In closing, I thank members for their attention and urge them to support this bill in the interest of the health and safety of Canadians.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:55 p.m.

NDP

Robert Chisholm NDP Dartmouth—Cole Harbour, NS

Mr. Speaker, I appreciated the comments from the member opposite. She clearly takes seriously the government's intention to crack down on contraband tobacco, and I could not agree more.

Does the member share with me the concern that this important endeavour that is being handed on to law enforcement agencies in this country would be jeopardized, in effect, because of the nearly $700 million cut to public safety that was announced in 2012 and that will be concluded in 2015? Nearly $700 million will be taken out of the budget of those agencies and departments that will be responsible for leading the efforts to control contraband tobacco at our borders and in our ports.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:55 p.m.

Conservative

Lois Brown Conservative Newmarket—Aurora, ON

Mr. Speaker, I do take this very seriously. My riding of Newmarket—Aurora was one of the ridings in which they did some experimental studies to find out the seriousness of contraband tobacco coming in. What they found was more than 30% of the cigarette butts that were picked up around the local high schools were cigarette butts from contraband tobacco.

I care very deeply for the youth in my riding and I would like to do everything within my capabilities to ensure these young people have the opportunity to grow up safely and securely, without organized crime around them and in good health, because they are our future generations. They are our leaders of tomorrow, and we want to see them have a safe future.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 9 p.m.

NDP

Alain Giguère NDP Marc-Aurèle-Fortin, QC

Mr. Speaker, as I was listening to my distinguished colleague’s speech, I noticed that we are in complete agreement with respect to our objectives. We are against crime, against the danger that tobacco use represents, and against the criminal activity surrounding tobacco smuggling.

However, I do have questions about our ability to deliver the goods. If we really want to fight crime, we must not only pass a bill, but also ensure that the legislation has teeth. Criminals have to go to prison; that is what I want.

I should point out to the member that I am from the city of Laval. Laval has big problems with organized crime and political corruption. It is a major problem. I cannot hide that. It is not pleasant to see our tax dollars pocketed by crooks and thieves—not petty thieves, but career criminals.

What I want to know, and what the people of Laval want to know, is whether, as in the case of the fight against tobacco, when we discuss this bill point by point, the Conservatives will have recommendations and accept them so that we will finally have legislation to take down the Mafia.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 9 p.m.

Conservative

Lois Brown Conservative Newmarket—Aurora, ON

Mr. Speaker, we are always open to listening to thoughtful recommendations that are brought forward in committee. We look forward to what our colleagues on the other side of the House might propose.

The member identified his area as Laval. Indeed, Ontario and Quebec are some of the hardest hit areas. We have not created this bill without consultation. Long before I was elected, I had the opportunity to spend some time with the RCMP in Cornwall. We took one of its boats out onto the river. The officers told us where the contraband was coming from. They showed us what their problems were.

We have been in consultation with our RCMP officers on this. We are going to dedicate a new force of 50 RCMP officers to work on the contraband file. We will continue to work with our police enforcement agencies across the country and we look forward to solving this problem.