Tackling Contraband Tobacco Act

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

This bill was last introduced in 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 often publishes better independent summaries.

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.

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.

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 / 8:15 p.m.
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NDP

Paul Dewar NDP Ottawa Centre, ON

Mr. Speaker, my father spent most of his career working for customs and excise. One of the things that he always related to me was the need for capacity. He did not call it that in those days, but he meant that human resources were needed to do the job. He used to negotiate GATT in Belgium. He was proud of the fact that we would negotiate realistic terms that were in line with other countries. When things were being negotiated at that time, things like the General Agreement on Tariffs and Trade, everything needed to be synchronized and in line. We need to do that here in Canada with the provinces. We can pass these powers to Attorneys General across the country, but if we do not have the mechanism for enforcement, then we have only done half the job.

The government has not done its homework or consulted. Sadly and specifically, most provinces are against the direction the government is going. It brings in crime bills but does not follow up with the capacity. That is the problem with the Conservative government, and that is the problem with the way it does business.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:20 p.m.
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Conservative

The Speaker Conservative Andrew Scheer

Resuming debate.

Before I recognize the hon. member for Selkirk—Interlake, I will just inform the House that we are now moving into the section of debate where speeches will only be ten minutes and questions and comments five minutes.

The hon. member for Selkirk—Interlake.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:20 p.m.
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Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, I am pleased to rise to speak in favour of Bill S-16, an act to amend the Criminal Code (trafficking in contraband tobacco).

The bill proposes amendments to the Criminal Code to create a new offence of trafficking in contraband tobacco and provide minimum penalties of imprisonment for persons who are convicted for a second and subsequent time for this offence.

I am going to be speaking very specifically about the bill, unlike some of the other speeches that we have heard from the other side today, so members will not have to make sure that I am being relevant.

The bill would fulfill the government's 2011 election policy platform commitment to help reduce the problem of trafficking in contraband tobacco by establishing mandatory jail time for repeat offenders of trafficking in contraband tobacco. I have to thank the Minister of Justice, the Minister of Public Safety and the Minister of Health for working together to bring about all the aspects of what we are trying to accomplish with Bill S-16.

Bill S-16 proposes to create a new offence dealing with contraband tobacco trafficking. Indeed, the bill would prohibit possession for the purpose of sale, offer for sale, transportation, delivery or distribution of a tobacco product or raw leaf tobacco that is not packaged, unless it is stamped. The terms “tobacco product”, “raw leaf tobacco”, “packaged”, and “stamped” have the exact same meanings as we see in section 2 of the Excise Tax Act of 2011.

The maximum penalty for a first offence would be up to six months' imprisonment on summary conviction and up to five years' imprisonment if prosecuted on indictment.

Repeat offenders convicted of this new offence in cases involving 10,000 cigarettes or more or 10 kilograms or more of any other tobacco product or 10 kilograms or more of raw leaf tobacco would be sentenced to a mandatory minimum of 90 days on a second conviction and a minimum of 180 days on a third conviction, and a minimum of two years less a day on subsequent convictions.

These proposed measures would undoubtedly have an impact on organized crime and on the sale of contraband tobacco. I also believe that this initiative would have a positive effect on the health of Canadians.

We all know, and we have heard it said here earlier today, that there are really three general rules for healthy living. If we want to have a healthier Canada, there are three things that we really have to do: get physical activity on a daily basis, eat well and eat healthy, and stop smoking.

For those who do not smoke, do not start. Smoking cessation is key to ensuring that people live longer. Smoking is tied to so many health problems, whether it is lung disease, heart disease or cancer. Those are the things that we have to ensure we prevent and save people all the agony of going through those terrible chronic illnesses.

We also know that there are a number of things that we can do to stop smoking and reduce smoking and other tobacco intakes. We know that implementing high tobacco prices achieved through excise taxes is an evidence-based strategy to reduce the use of tobacco products. We know among Canadian adults it is estimated that a 10% increase in price is estimated to result in a decrease in cigarette demand of up to 4%. There is a correlation. It is proven and it is statistical.

However, the presence of cheap contraband cigarettes, sold without all appropriate taxes applied, undermines the potential health benefits of this effective intervention by providing an accessible alternative to quitting, thereby increasing relapses and encouraging people to start smoking again.

The illegal sale of contraband cigarettes increased exponentially in Canada between 2002 and 2008, particularly in Canada's largest provinces, Ontario and Quebec. In 2008, the contraband tobacco market in Ontario was estimated to be as much as 42% of total cigarette sales. Contraband cigarettes enter the Canadian market through many sources: unlawfully or lawfully manufactured and smuggled in from the United States, unlawfully manufactured right here in Canada, counterfeit products entering the country illegally, and other related criminality, such as thefts.

Studies have demonstrated that persons who smoke contraband cigarettes have higher levels of nicotine dependence, have been smoking for longer in terms of pack-per-year history, have no intention to quit, perceive themselves to be very addicted, have previously used pharmacotherapy to stop smoking and are exposed to smoking in the home, compared with those who used premium or discount tobacco brands. Studies have also shown that people who smoke contraband cigarettes are somewhat less likely to attempt to quit compared to those who use a premium or discount tobacco brand.

We all know that tobacco products are ranked by the World Health Organization as a level one carcinogen. That puts it on the same level as asbestos, mustard gas and nuclear radiation. Therefore, we need to make sure that people stay away from tobacco products. As the member for Oak Ridges—Markham mentioned earlier tonight, I have witnessed people in my family, loved ones, suffer horribly and die horrific deaths because of their heavy tobacco use throughout their lives.

In my view, a successful approach to combatting contraband tobacco cannot rely solely on legislation. Although tough legislation such as Bill S-16 is necessary, a government strategy must also involve the use of law enforcement.

We have been talking tonight about some of the efforts being made by law enforcement agencies, particularly the RCMP. In this regard I have to note that our government is advancing its efforts to combat the trafficking and cross-border smuggling of contraband tobacco by standing up and establishing a 50-officer RCMP anti-contraband tobacco force. This anti-contraband tobacco force would target organized crime groups engaged in the production and distribution of contraband tobacco. Its goal is to have a measurable impact on reducing the contraband market and on combatting organized criminal networks. This would align with the RCMP contraband tobacco enforcement strategy, which focuses on reducing the availability of and demand for contraband tobacco and the involvement of organized crime, as well as build on our existing federal enforcement measures.

The Government of Canada recognizes that contraband tobacco smuggling has become a serious problem in the last few years. Certainly, Canadians want to be protected from offenders involved in these contraband tobacco smuggling operations, which threaten their safety and that of their families, as well as their health and the health of our youth.

I can speak for the communities of Selkirk—Interlake, which are very rural ridings, and Metis and first nation communities. No one likes having criminal elements in our neighbourhoods. No one wants those criminal elements and organized criminal gangs selling contraband tobacco and other illicit drugs to our youth. Canadians want to be protected from organized crime that is associated with contraband tobacco activities. These proposed amendments and the establishment of a 50-officer RCMP anti-contraband tobacco force would do just that.

I have to say that I respect the RCMP and all of its efforts related to community safety. I respect the work that it is doing on the Hill. I know it wants to stop contraband, stop organized crime and stop smoking. I just wish that the NDP leader would stop at stop signs, that he would stop for the RCMP cruisers when they chase him and he would stop being so mean.

Tackling Contraband Tobacco ActGovernment Orders

June 13th, 2013 / 8:25 p.m.
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NDP

Robert Chisholm NDP Dartmouth—Cole Harbour, NS

Mr. Speaker, I appreciate the comments of the member opposite. I would ask him to explain to Canadians how he and his colleagues think they can achieve all that needs to be achieved, as he so rightly said, with respect to the enforcement of contraband tobacco, when there has been nearly $700 million cut from public safety. The regional priorities and planning document from that department stated that there would be nearly 700 people cut from public safety over the next three years. How will it be able to do everything we want it to do if it does not have the tools and the resources to carry out those responsibilities? Could he please explain that?

Tackling Contraband Tobacco ActGovernment Orders

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

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, we would be able to do this within existing resources, and we would make sure we were standing up a 50-member RCMP unit that would go out and target where the high levels of contraband are. They would be able to do this within existing divisions across the country. They would get the support they need from the existing budget and from their own leadership. We know they would have a positive impact on reducing contraband sales as well as the criminal activities that are tied to the smuggling of contraband and illicit sales across this country.

Tackling Contraband Tobacco ActGovernment Orders

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

Kirsty Duncan Liberal Etobicoke North, ON

Mr. Speaker, I would like to thank my colleague and friend for the work he has done on skin cancer.

According to the senior policy adviser with the Canadian Cancer Society:

Tobacco is the leading preventable cause of disease and death in Canada, and we need sustained federal government action in response. Other countries are looking at new ways to protect their citizens from tobacco-related disease.

The government previously set a goal to reduce the number of people who smoke to one in eight Canadians. Currently Health Canada reports that tobacco is responsible for 37,000 deaths annually. I am wondering what other recommendations the member would suggest the government bring forward to reduce smoking rates to the 12% prevalence goal adopted by the government in 2007.

Tackling Contraband Tobacco ActGovernment Orders

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