Mr. Speaker, sometimes the debate shifted away from the main subject of the bill.
I would like to say that I personally hate cigarettes because I am asthmatic. My brother and I—he more so than I—suffered the effects of second-hand smoke throughout our entire childhood.
I want to make one thing clear from the outset. I have never smoked and I dream of a world where people will spend the same amount of money—a carton of contraband cigarettes is worth $20 or $30—on healthy goods, and goods sold by merchants. I dream of a day when merchants will make money by selling goods that are less harmful to our health. I thought it was important to say that before some members asked questions outside the purview of the bill we are debating today.
We are debating S-16, Tackling Contraband Tobacco Act. First, I will explain what contraband tobacco is. It is any tobacco product that does not comply with the provisions of applicable federal and provincial legislation. This includes the importation, stamping, marking, manufacturing, distribution and payment of duties and taxes.
At present, there are no offences in the Criminal Code dealing specifically with contraband tobacco. That is why Bill S-16 was introduced.
By adding to the Criminal Code offences pertaining to contraband tobacco similar to those found in the Excise Act, 2001, Bill S-16 would authorize all police services to crack down on contraband. That is one of the interesting aspects of the current bill. I want to make it clear: any police force could take action to crack down on contraband tobacco.
According to the Royal Canadian Mounted Police, contraband tobacco products fall into five major categories. It is interesting and much more diverse than what one might think. It is a far cry from the cliché where contraband is found in only one Indian reserve located somewhere in Canada. It is much more complicated.
These types include the following: American product smuggled into Canada; product that is illegally manufactured within Canada; counterfeit product that enters by sea container, because all transactions at ports are a big problem when it comes to smuggling tobacco products; product to be sold on first nations' reserves that has been diverted to the wider market, which is an important nuance because when something is diverted to the market it is not exclusively an aboriginal issue, since anyone can be diverting the product in this illegal exchange; and product sold on the Internet, including illegally manufactured and counterfeit products, as well as products for which duties and taxes have not been paid. This is a serious problem that affects the entire country.
Where does the NDP stand on Bill S-16? The NDP will support the bill at second reading so it can be studied in committee. Why is this study important? Because the bill raises some questions.
For example, have the consultations with the provinces, territories and first nations communities thus far been sufficient? We hope that the study in committee will ensure that such consultations are held and will help strengthen them.
We are also worried about something that we have seen a lot of since the Conservative government came to power: the mandatory minimum sentences included in the bill. This really bothers me. I think it is an insult to the intelligence of the justice system and our judges, who are always dealing with very complicated situations.
Imposing a minimum sentence on someone who allegedly smuggled goods because of extenuating circumstances can be quite different from imposing that same sentence on a real smuggler who was running a quasi-professional operation and who may have also laundered money.
When the government puts a minimum sentence on everything it is essentially saying that our judges are not smart enough, but I think that they do a great job. Nevertheless, the minimum sentences are here again in this bill.
The bill includes mandatory minimum prison sentences for repeat offenders. That is reasonable, given that we are talking about recidivism. Unlike other bills we have seen, we are not talking about a minimum sentence for the first offence. The mandatory minimum sentence is 90 days for a second offence, 180 days for a third offence, and two years less a day for every other subsequent offence. These are well-defined minimum sentences that may seem reasonable and would be in some cases, but are nonetheless minimum sentences. In some cases, there could be some mitigating circumstances for one of the accused. Are these minimum sentences, suitable sentences? The question has to be asked or minimum sentences will be handed down indiscriminately, based on personal experiences or what happened to our brother-in-law three years ago. We must absolutely allow the standing committee to address this.
Tobacco smuggling in general is a problem for a number of reasons. The first pertains to public safety. The RCMP estimates that about 175 organized crime groups profit from the sale of illegal cigarettes and use those profits to fund other criminal activities, such as drug and human trafficking. An increase in tobacco smuggling therefore supplies a chain of criminal activities. There was a drop in tobacco smuggling in the 1990s, but it has increased dramatically since 2000. Tobacco smuggling supplies an entire chain of criminal networks, which are even involved in the extremely reprehensible practice of human trafficking.
The government is introducing a law and order bill while making over $200 million in cuts to the RCMP's budget. That is disturbing. Once again, we have to wonder about this. The government is announcing that a certain amount of money will be allocated to the fight against tobacco smuggling, which is a measure that is welcomed by the associations that are directly involved. However, this is all just smoke and mirrors since, meanwhile, the government is making cuts to the RCMP's overall resources.
I have the same question that my colleague asked about 15 minutes ago. How can we eventually deal with serious crime if we have fewer resources? How can we get to mafia and gang leaders with fewer and fewer resources?
From a public health point of view, illegal tobacco products are of a lower quality. That also needs to be taken into consideration. A lot of illegal tobacco products are sold to young people. That is another problem, because 20% of Canadian youth between the ages of 12 and 19 smoke. In addition, if they are smoking illegal tobacco products, we do not know what they are actually smoking. It could be even worse for their health.
There is also the issue of lost tax revenue for the various levels of government. The federal government loses a total of $2.1 billion in uncollected taxes annually. In Quebec, lost tax revenue in the tobacco industry recently hit $125 million. Lost revenue is a serious issue.
As the official opposition critic for small business, I would like to talk about the impact that contraband has on small business owners. It is true, tax revenue suffers because taxes are not collected on the profits small businesses would make on tobacco sales. Revenue is also lost because of uncollected taxes. The criminals who sell illegal tobacco do not call up tax authorities to tell them that they will send in a cheque to cover the taxes on the products they sold.
However, business owners are the first victims. They are selling a legal product. There is also the issue of public health, but for now, it is legal for business owners to sell tobacco. It is one way to make money. It is often those who own smaller businesses—for example, family businesses that have very few or no employees—who need this. Much of their business may come from tobacco sales. When a region is suddenly saturated with illegal products, small business owners are the first victims.
In May 2010, the Canadian Convenience Stores Association raised a number of points. Contraband represents 40% of the tobacco market in Quebec and up to 50% in Ontario. Over the past three years, one convenience store a day has been forced out of business, and in most cases, lost revenues on the sale of legal tobacco products is what has caused these small businesses to fail.
One final testimony really struck me. Xavier Shi, who has a little smoke shop on Jean-Talon Street, said:
If we ask our customers, they tell us that they are buying them [cigarettes] elsewhere and that contraband cigarettes are much cheaper. They can even get them delivered to their door.
How is a small retailer on Jean-Talon Street supposed to compete with these kinds of illegal practices?