This bill is from the 41st Parliament, 1st session, which ended in September 2013.
In committee (House), as of June 13, 2013
(This bill did not become law.)
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from 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:
Hélène LeBlanc NDP LaSalle—Émard, QC
Mr. Speaker, I thank my colleague for his speech. He touched on some very interesting points that are important to me as well.
He spoke about mandatory minimum sentences and the impact they have, and he also spoke about the impact that contraband tobacco has on small and medium-sized businesses. We are actually talking about small and very small businesses. I am sure he has those in his riding.
Could he speak more about those two points he raised in his speech?
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I thank my colleague from LaSalle—Émard for her question.
Starting up a business is always a challenge. However, competition is very tough for small businesses in this type of traditional sector. There are also a large number of factors that can cut into profitability. My colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup can attest to that. He is currently working on the issue of fees associated with credit card reward programs.
The huge fees prevent these small businesses from predicting costs and profits. Their sales figures can be undermined by lower revenues from the sale of tobacco products, which still has a good profit margin. There are two very different types of risks here, which makes things extremely complicated for small business owners.
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Mr. Speaker, the government boasts about wanting to combat organized crime involved in contraband cigarettes. It may want to pass a law to punish people who are caught smuggling cigarettes, but in general, the leaders of organized crime groups do not get their hands dirty. We would have liked to know what this government, which boasts about being tough on crime, will do about the Mafia leaders who are currently praying in church for this government to be re-elected, since the government is making their lives so much easier by making cuts to the budgets of the Royal Canadian Mounted Police and Canada's correctional services.
I would like to know how this bill will protect us from these major criminals, the people who lead organized crime groups. What would be appropriate measures and budgets to go after these people who have created a state within a state?
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I thank my colleague from Marc-Aurèle-Fortin for his heartfelt speech, which echoes the words of our colleague from Compton—Stanstead. This member spoke about the border services' lack of resources to combat contraband tobacco.
To answer my colleague, quite frankly, I really do not see how this bill would enable us to touch those famous Mafia bosses.
The other thing that bothers me is that the government is vastly undermining our capabilities. For example, I spend a lot of time on the road travelling to the Hill. The trip takes me 4 hours and 30 minutes. The best way to combat speeding on our roads is not to enact tougher laws, but rather to station patrol cars on the side of the road. This is when everyone starts hitting the brakes.
In short, it is obvious that the problems are not primarily related to legislation. Legislation can result in significant progress in regard to the bosses and large-scale organized crime. However, the much bigger problem lies with the resources allocated to carry out investigations in order to enforce the law as it is.
Hélène LeBlanc NDP LaSalle—Émard, QC
Mr. Speaker, cigarettes are a scourge. There is no doubt about that. They are a health hazard and lead to serious addiction.
Over the years, measures have been taken to control tobacco as much as possible and to dissuade people from taking up smoking. As some of my colleagues mentioned, very young people will start smoking despite all of the warnings, and they will often be far more affected by their dependence on cigarettes.
The NDP also recognizes that contraband cigarettes—the illegal sale of cigarettes—is also a scourge because they are often sold for less and can encourage new smokers and young smokers. Contraband cigarettes help perpetuate the negative impact of smoking.
I have the honour and privilege of representing the riding of LaSalle—Émard, which is on the Island of Montreal, in Quebec. There are a large number of convenience store owners in my riding. I had the opportunity to meet with the convenience store association, whose members are feeling the economic impact of contraband cigarettes. That is what is so paradoxical about this product, which is such a health hazard. The government is making money off it and trying to control it at the same time. Convenience store owners are feeling the economic impact of contraband cigarettes. Quebec and Ontario are often affected.
Documents provided by the Library of Parliament indicate that, under current laws, namely the Excise Act, 2001 and the Criminal Code, cigarette seizures by the RCMP have been increasing over time. There has been a tremendous increase. The number of seizures was quite low between 2001 and 2004, and then it suddenly skyrocketed.
The legislative summary suggests that law enforcement priorities may have played a role as well. Trafficking in contraband cigarettes has increased significantly and not just Canadian cigarettes, but imported cigarettes as well. Under the current regime, the RCMP can already make major seizures. We can see that in the statistics in the chart, which is very clear and quite graphic. Dealing with this scourge was a priority.
We must debate Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco), which is also called the Tackling Contraband Tobacco Act. This bill originated in the Senate and seeks to create a special provision on contraband tobacco. Again, I am not denying the fact that this is a scourge and that we must deal with it here in the House. However, I want to talk about the laws currently in effect to deal with this problem. Under the current legislative regime, RCMP seizures have gone up.
We saw that tackling contraband cigarettes may have been made a priority. That is why I am puzzled. I am not saying that I do not support Bill S-16, but I am wondering about the measures already in place that seem to be doing the job.
As I mentioned, the Excise Act, 2001, is in effect and we also have the Criminal Code.
Charges under the Criminal Code may include, but are not limited to: fraud, conspiracy, conspiracy to commit offences, participation in activities of criminal organization, and possession of property obtained by crime.
Under the Excise Act, 2001, the offences are:
...selling, offering for sale, purchasing or possessing unpackaged or non-stamped raw leaf tobacco (section 30) and the possession, sale or offering for sale of tobacco products that are not stamped (section 32), both of which are “hybrid offences”.
The Excise Act, 2001, already provides specifics that truly tackle the illegal sale of tobacco.
We are still talking about the enforcement and impact of Bill S-16. The legislative summary goes on to say:
Criminal enforcement under the Excise Act, 2001 may be carried out by “any police force in Canada” that is designated according to certain conditions. It appears that the RCMP is the force designated as such. In comparison, all police forces may enforce Criminal Code provisions.
This covers quite a bit in terms of the enforcement and impact of existing legislation.
The parliamentary secretary also talked about something mentioned in the legislative summary:
The Standing Senate Committee on Legal and Constitutional Affairs submitted observations with its report on the bill, suggesting that the government consider providing provincial police with enforcement powers under the Excise Act, 2001, as well as under the Customs Act.
Once again, this is about problems related to enforcing the law.
I would like to share an interesting example. It is important to understand that a number of stakeholders are involved in enforcing this law. However, a number of stakeholders also find themselves on the other side of the law, that is, breaking the law.
Coming back to the legislative summary, it states:
For example, in the Cornwall area, there are various efforts such as joint investigative units and a task force to encourage collaboration between various enforcement organizations such as the RCMP, the Canada Border Services Agency, the Ontario Provincial Police, the Cornwall Community Police Service and the Akwesasne Mohawk Police Service.
In my opinion, that is a good example of co-operation between all stakeholders in order to enforce various laws that fight contraband.
In conclusion, I would like to point out that the NDP takes the problem of tobacco contraband in Canada seriously. I mentioned this in my introduction and I am saying it again now.
Tobacco contraband is a problem that affects health and public safety, tax revenues and the profitability of small businesses, as I already pointed out. For that reason, the NDP has asked the federal government to take action on this issue and to co-operate with the communities affected the most. That is very important.
The government must provide the necessary resources to the Canada Border Services Agency and the RCMP in order to properly deal with the problem because it is also an international issue.
Unfortunately, as we saw in the most recent budget, the government did not. The cuts will hinder the fight against counterfeiting and contraband.
Kennedy Stewart NDP Burnaby—Douglas, BC
Mr. Speaker, I listened with great interest to my colleague's speech. I would really like to thank her for the wonderful work she does leading us in industry committee and as our NDP industry critic.
We on the west coast have some real concerns about counterfeiting, mainly because the port of Vancouver is the top entryway for contraband cigarettes in Canada and we have just eliminated the Coast Guard station there. Now we have no Coast Guard presence at all monitoring these ships that are coming in.
We are supporting sending the bill to committee to look at this issue. I would like to ask my colleague how, in light of these facts, we might expand our investigation here to include issues like Coast Guard presence on the west coast.
Hélène LeBlanc NDP LaSalle—Émard, QC
Mr. Speaker, I thank my colleague, who does an excellent job as our science and technology critic. He raised a very important point about good intentions. Having good intentions is commendable.
However, we have questions about how the bill will be enforced. My colleague raised the point that contraband cigarettes are no longer a local issue, but that they have become national and international issues. How can we successfully tackle contraband?
I want to point out that it will be the same thing with Bill C-56, which deals with counterfeit goods, if we do not come up with measures to back up our plans.
Christine Moore NDP Abitibi—Témiscamingue, QC
Mr. Speaker, I thank my hon. colleague for her speech. She began by calling tobacco use a real scourge. I have been a smoker for a very long time, many years in fact, and I regret ever starting. Right now, I have not had a cigarette in 10 days, and I hope to successfully quit.
I studied the bill and did not see any measures to address the issue of demand. When we talk about contraband, it is a question of supply and demand. If people continue to demand these products, others will produce them.
I would like to know if my colleague thinks the bill includes any specific measures to stop people from smoking or at least to ensure that there is no demand for contraband products. Does the bill contain any measures of a more social nature related to health, or is it a strictly justice-related or technical bill?
Hélène LeBlanc NDP LaSalle—Émard, QC
Mr. Speaker, I thank my hon. colleague for the question.
She raised the issue of prevention. I agree that one of the problems is indeed supply and demand. She also mentioned the health aspect. As another member mentioned earlier, the federal government cut funding for anti-smoking programs.
This bill is more about simply amending the Criminal Code. However, we need to take a holistic approach in order to determine who is involved in this market on both ends—both the buying and selling. That is a very good point, and it also relates to our economy.
Second readingTackling Contraband Tobacco ActGovernment Orders
Conservative
Patrick Brown Conservative Barrie, ON
Mr. Speaker, I am sharing my time with the very hard-working member for Wetaskiwin.
I am pleased to say a few words about Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco)
This bill contains a number of very important amendments to the Criminal Code aimed directly at the criminals who are flooding Canada with illicit tobacco products that undermine the Canadian economy, fuel addiction, and add to the already serious long-term health issues associated with smoking.
As we have heard, this is not the first time that Canada has faced the challenge of contraband tobacco. When the problem first arose some two decades ago, it had to do with our own legally manufactured and exported tobacco products being smuggled back into our domestic market at greatly reduced prices. Through a combination of tax policy and enforcement measures, we were able to stem the tide of this early onslaught of contraband tobacco.
Since then, the primary legislative vehicle for controlling this illegal trade has been the Excise Act. This legislation combines fines, jail terms and forfeitures to enforce the prohibition against selling tobacco products that have not been stamped. Stamping indicates that the excise tax has been paid. Unfortunately, despite this legislation and despite the efforts of dedicated law enforcement officials, contraband tobacco remains a serious threat to the public safety of Canadians, their communities and the Canadian economy.
Although there are several sources for the contraband tobacco products that are entering Canada, the illicit trade is driven largely by illegal operations run by criminal organizations in both Canada and the United States. In this regard, the provinces of Ontario and Quebec have the highest concentration of illegal manufacturing operations, the majority of the high-volume smuggling points and the largest number of consumers of contraband tobacco.
In response, the government launched the RCMP contraband tobacco enforcement strategy in 2008 with a focus on reducing the availability and demand for contraband tobacco and on weakening the involvement of organized crime in this illegal industry. At the same time, the task force on illicit tobacco products was formed to identify concrete measures to disrupt or reduce the trade in contraband tobacco. The next year, the task force presented a lengthy report to the Minister of Public Safety in which it noted that at least 30% of Canadian tobacco purchases involved contraband tobacco.
One of the primary drivers of this illicit trade, aside from the willingness of consumers to pay markedly reduced prices, has been the shift from single individuals or small groups conducting sporadic smuggling to organized crime groups doing the smuggling and distributing the illicit tobacco through their criminal networks.
Clearly, the time has come to take steps to come to grips with the growing nature of this illegal activity and the growing involvement of criminal organizations whose related activities include the smuggling of other items into Canada using the same networks, which is particularly alarming.
This is the context in which we must evaluate Bill S-16.
Briefly, the bill is one part of a two-part response to the issue I have described. The first part is the bill itself. It proposes to amend the Criminal Code to create a new hybrid offence of trafficking in contraband tobacco, with mandatory minimum penalties for repeat offenders. The second part of the response is the implementation of a strengthened anti-contraband enforcement strategy that includes the establishment of an anti-contraband force made up of 50 RCMP officers. Both of these proposals respond to the 2011 election platform commitments of this government.
I will go into a bit more detail on exactly what is contained in Bill S-16.
First, the bill would create a new offence in the Criminal Code to deal with contraband tobacco trafficking. Indeed, the bill would prohibit the possession for the purpose of sale, offer for sale, or the 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”, “package” and “stamped” have the same meaning as in section 2 of the Excise Act, 2001. This would ensure consistency in our national enforcement efforts.
Pursuant to these proposed amendments, the maximum penalty for a first offence would be up to six months' imprisonment on a summary conviction and up to five years' imprisonment if prosecuted on an indictment.
Repeat offenders, convicted of this new offence in cases involving 10,000 cigarettes or more, 10 kilograms or more of any other tobacco product or 10 kilograms or more of any raw leaf tobacco would be sentenced to a mandatory minimum term of imprisonment of 90 days on a second conviction, a mandatory minimum of 180 days on a third conviction and a mandatory minimum of 2 years less a day on subsequent convictions.
The amendments proposed in the, appropriately titled, tackling contraband tobacco act would not only respond to our domestic problems but would equally respond to the broader international efforts to combat trafficking in tobacco. Let us recall in this context that tobacco smuggling by definition means the illegal movement of goods over national frontiers. Tobacco smuggling is a particularly widespread illegal activity and has an impact on a great number of countries. Thus, Canada is not alone in wanting to put an end to this illicit commerce.
In any attempt to combat organized crime's involvement in tobacco smuggling, one must recognize that organized crime adopts all forms of corruption to infiltrate political, economic and social levels all over the world. This issue has been addressed at both global and regional levels and continues to receive substantial domestic and international attention.
The international community has adopted many international instruments dealing with criminal law. These international agreements attest to a country's recognition of the need for international co-operation to tackle international crime. One aspect of international co-operation that is repeatedly found in these instruments deals with mutual legal assistance. This form of international co-operation is one of the most powerful tools employed by governments to reduce the incidence of international crime.
Therefore, not only does tobacco smuggling necessarily contain an international dimension, one that sometimes involves several countries and the crossing of several borders; it also involves, as our own law enforcement representatives have informed us, significant organized crime group participation. Bill S-16 would not exist in isolation. While this new legislation would help Canada combat tobacco smuggling, it would also help us combat tobacco smuggling and organized crime outside our own borders, not just in Canada alone.
In closing, I thank hon. members for their attention and urge them to consider the broad context in which Bill S-16 must be assessed. Once they have done that, I am convinced they will agree with me that this bill ought to be passed and implemented without delay.
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Speaker, in the context of contraband tobacco, forgive me, but every time someone mentions organized crime I tend to think of the tobacco industry as organized crime, having lost my grandfather to lung cancer at a time when cigarette companies advertised tobacco as safe and recommended by doctors despite the U.S. surgeon general's warning.
However, in this case, we know we are fighting contraband tobacco, and the bill would be helpful. However, I am concerned about some aspects of it, and I wonder whether the hon. member thinks there will be room for amendments in committee.
Second readingTackling Contraband Tobacco ActGovernment Orders
Conservative
Patrick Brown Conservative Barrie, ON
Mr. Speaker, I am not on the committee dealing with this bill, but I know these bills get looked at very seriously in committee.
I would agree with the hon. member on her concern about the importance of combating the dangers associated with tobacco. That is why, with the five-year renewal of the federal tobacco strategy in 2012, Health Canada will continue its very dedicated work on tobacco control initiatives that are aimed to preserve the gains we have made in the last 10 years, which are quite significant.
Second readingTackling Contraband Tobacco ActGovernment Orders
Conservative
Blaine Calkins Conservative Wetaskiwin, AB
Mr. Speaker, I am glad to rise in my place today and speak to this legislation. I would like to thank my colleague the member of Parliament for Barrie for sharing his time with me, for his excellent speech and for his support of the bill.
I rise to speak in favour of Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco). This enactment proposes amendments to the Criminal Code to create new offences for trafficking in contraband tobacco and to provide minimum penalties of imprisonment for persons who are convicted of a second or a subsequent time for this offence.
This legislation would prohibit possession for the purpose of sale or offer to sale, the transportation of or the delivery or distribution of a tobacco product or raw leaf tobacco that is not packaged, unless it is officially stamped. The terms “tobacco product”, “raw leaf tobacco”, “packaged” and “stamped” have the same meanings as in section 2 of the Excise Act, 2001.
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 by way of indictment. Repeat offenders convicted of this new offence in cases involving 10,000 cigarettes or more, 10 kilograms or more of any other tobacco product, or 10 kilograms or more of raw leaf tobacco would be sentenced to a minimum of 90 days on second conviction, a minimum of 180 days on a third conviction and a minimum of two years less a day on all subsequent convictions.
Overall, the proposals represent a tailored approach to the imposition of mandatory minimum penalties for serious contraband tobacco activities. The bill proposes mandatory minimum penalties only in cases where there are certain aggravating factors present.
Trafficking in contraband tobacco is a serious problem that requires serious remedies. As some members will recall, a contraband tobacco market became a significant issue in Canada in the late 1980s. During that period, more and more legally manufactured Canadian cigarettes destined for the duty-free market began making their way back into the Canadian underground economy. The high retail price of legitimate cigarettes made the smuggling of cigarettes across the border a striving and lucrative illicit business.
The Royal Canadian Mounted Police and Canadian customs seized large quantities of contraband tobacco. The RCMP was also engaged in investigating this illegal activity at its source. These investigations eventually led to several tobacco companies having to pay more than $1.5 billion in criminal fines and civil restitution.
While this type of smuggling activity largely has subsided, the illicit tobacco market in Canada has rebounded in recent years, involving contraband tobacco that is primarily connected not to the diversion of legally manufactured products but to the illegal manufacture, distribution and selling of contraband tobacco products. It also includes to a lesser degree the illegal importation of counterfeit cigarettes and other forms of illicit tobacco from abroad.
Organized crime groups play a central role in the contraband tobacco trade in Canada, and this means that this illegal activity is linked with other kinds of crime. Most of the organized crime gangs that are involved in the illicit tobacco market are also active in other forms of criminal behaviour.
The problem is further complicated and exacerbated by the fact that some of the illegal manufacturers that supply the Canadian market are on the U.S. side of the Akwesasne Mohawk territory, which spans the border between Quebec, Ontario and New York state.
Members should know that transnational crime of the type found in contraband tobacco smuggling is considered a threat to public safety and national security and has a direct impact on individual Canadian businesses and our economy. It also has implications for relationships with our international partners, especially the United States. In this regard, however, Canada and the U.S. share a long history of law enforcement co-operation across our shared border.
Contraband tobacco is driven largely by illegal operations on both sides of the border. The provinces of Ontario and Quebec have the highest concentration of contraband tobacco manufacturing operations, the majority of high volume smuggling points and the largest number of consumers of contraband tobacco.
Criminal organizations are motivated by the lure of significant profits and relatively low risks in this sphere of illegal activity. Enforcement actions are, therefore, directed at increasing the risks associated with contraband tobacco activities: dismantling illegal manufacturing facilities, disrupting distribution supply lines, apprehending key figures and individuals, confiscating conveyances such as trucks and boats, and seizing the proceeds of crime. These actions have the dual goals of disrupting the illicit flow of tobacco and weakening the organized crime groups involved in the production, distribution, smuggling and trafficking of contraband tobacco.
To achieve these goals, the RCMP has engaged in joint targeted initiatives with law enforcement partners and other stakeholders across Canada and even, as mentioned earlier, internationally. These initiatives, varying in their degree of complexity, include short- and long-term joint investigations, outreach and awareness campaigns and active participation in inter-agency contraband tobacco task forces and groups. Unfortunately, contraband tobacco remains a serious threat to our communities, and if left unchecked, organized crime will continue to profit at the expense of the health and safety of Canadians.
Recent intelligence indicates a rise in counterfeit tobacco products entering the Canadian market. These illegal products are then transported through nationwide networks for sale to consumers as a cheaper alternative to legitimate tobacco products, thereby making them more accessible to Canadian youth.
Protecting society from criminals is a responsibility our government takes very seriously. Overall, the proposals represent a tailored approach to the imposition of mandatory minimum penalties for serious contraband tobacco activities. This bill proposes minimum penalties only in cases where there are certain aggravating factors present.
This bill is part of the government's continued commitment to take steps to protect Canadians and to make our streets and communities safer. Canadians want a justice system that has clear and strong laws that denounce and deter serious crimes, including illicit activities involving contraband tobacco. They want laws that impose penalties that adequately reflect the serious nature of these crimes, and this bill would achieve that.
I encourage all of my colleagues and members on each side of the House to fully support Bill C-16. It is high time we made this the law of the land.
Jean Rousseau NDP Compton—Stanstead, QC
Mr. Speaker, I would like to thank my colleague for his speech, and I commend him for it. As was already mentioned, the NDP will support this bill at second reading.
I am still wondering about how effective the bill will be and what impact it will have on the tax evasion associated with contraband cigarettes in Canada, which deprives the government of over $2 billion in tax revenue a year.
I would like my colleague to share his thoughts on that.
Second readingTackling Contraband Tobacco ActGovernment Orders
Conservative
Blaine Calkins Conservative Wetaskiwin, AB
Mr. Speaker, I appreciate the question that is being asked. In my riding, there are a lot of great folks who live on first nations territory. Some time ago, a seizure was made at one of the bands, where 14 million contraband cigarettes were seized on that reserve. This particular group of reserves is quite notorious across Canada, sometimes for good reasons but also sometimes for bad reasons, with its links to organized crime. The Alberta government stepped in and confiscated this illegal tobacco due to the fact that it did not have a provincial stamp, which resulted in a loss of revenue in just that shipment alone of several million dollars of taxes that should have been collected.
This is a very serious issue. We cannot have a situation where there are two different streams, one of contraband and one of a legal flow of goods and services in this country. Not only is the contraband not a healthy choice and not inspected by the appropriate authorities, but it evades the taxes that are duly imposed upon these goods in order to address the serious issues that we have as a nation.