Bill S-16 (Historical)

Tackling Contraband Tobacco Act

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

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.

Tackling Contraband Tobacco Act

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I thank my colleague from Churchill for her very accurate, though unfortunately disappointing, account of the reality on the ground.

How ironic that we are in the middle of National Public Service Week. Look at how poorly the government treats our public service and our public servants. There is a complete disconnect between the government's intentions and what actually goes on on the ground.

I would like to hear what my colleague has to say about how the government does not value its human resources and even has contempt for them.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I thank my hon. colleague for the question.

It is ironic that the government is talking about the importance of security and the importance of the police and telling Canadians that it is in control of the situation, when the reality on the ground is quite different. Police officers are asking for more support and the leaders of aboriginal and rural communities are saying they need more security and more police officers. These people want to change things and work with their fellow citizens to create better communities for everyone.

The reality is that despite what the federal government thinks and says, it is just not at the table to offer any support and co-operate with these communities.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Mr. Speaker, I am pleased to be sharing my time with the member for Northumberland—Quinte West. It is particularly apropos to be doing so. He is a former police officer who has served in remote northern communities, as many members in the Conservative caucus have. I believe there are 14 former police officers in our caucus, among them are the member for Northumberland—Quinte West, the member for Kootenay—Columbia, the member for Yukon, the Minister of International Cooperation. All of them have served this country well. They have put their lives on the line to protect ours. They certainly have the on-the-ground experience which the member for Churchill was just referring to, so I will certainly take my lead from the member for Northumberland—Quinte West and look forward to his speech.

I appreciate the opportunity to talk about this important issue. This is a piece of legislation that concerns cracking down on the illegal trafficking of contraband tobacco. Like most Canadians, unfortunately, members of my family have been touched by cancer as a result of smoking tobacco. My grandfather died at the age of 57 after having taken up smoking when he joined the air force in World War II. He smoked for 40 years and he was taken away from my family far too soon. My wife's aunt just passed away this last year. It was the same situation. For 40 years she was addicted to cigarettes. It took her from our family far sooner than we would have liked.

We need to continue our efforts to convince Canadians that smoking is a bad thing in all its forms and that contraband tobacco is particularly nefarious. Not only does it contain all the negative factors associated with smoking, but it also deprives the government, which has to look after people who become ill from smoking cigarettes, of tax revenue. I heard a colleague in the NDP mention the figure of $2 billion a year. The member for Churchill, another NDP member, also mentioned the lack of revenue being a key concern when dealing with contraband tobacco. That is where I am going to focus my speech.

Contraband tobacco is not only illegal, but it is detrimental to the health and safety of Canadians. In addition, as I said, the trafficking of contraband tobacco deprives the government of important revenue that is earned through the sale of legal tobacco products, revenue that helps fund programs aimed at stopping the use of tobacco, particularly among youth, and that funds health care for those who need it.

As I said, I am going to focus my comments today on what our government is doing to protect government revenues and the Canadian tax base. Since coming to office in 2006, our government has taken a number of steps to improve the integrity of the Canadian tax system and make it stronger and fairer for all Canadians. In an uncertain global environment, the most important contribution the government can make to help create jobs, growth and long-term prosperity is to maintain a sound fiscal position. Managing tax dollars wisely ensures sustainable public services and low taxes for Canadian families and businesses.

Our government is committed to responsible fiscal management, which includes returning to balanced budgets in the medium term. Also, we are controlling spending. It also includes continuing to enhance the integrity of the tax system to ensure that everyone pays their fair share of taxes. Such actions help keep taxes low for Canadian families and businesses, thereby improving incentives to work, save and invest right here in Canada.

In past budgets, our government adopted tough rules to close tax loopholes and prevent a select few businesses and individuals from avoiding taxes. Since 2006, including measures proposed in economic action plan 2013, the government has introduced over 75 measures to improve the integrity of the tax system. Economic action plan 2013, in fact, takes several important steps to improve the integrity of our tax system and to close tax loopholes. The measures include strengthening compliance with the law, and fighting international tax evasion and aggressive tax avoidance.

In economic action plan 2013, our government announced a new stop international tax evasion program, which would enable the Canada Revenue Agency to pay individuals with knowledge of major international tax non-compliance a percentage of tax collected as a result of information they provide.

We would require certain financial intermediaries, including banks, to report their clients' international electronic fund transfers of $10,000 or more to the CRA. In addition, we propose new reporting requirements for Canadian taxpayers with foreign income or properties and have streamlined the process for obtaining information concerning unnamed persons from third parties, such as banks.

Again, this speaks to our desire to make sure that everyone is paying a fair share and not skipping out on tax bills or using aggressive tax avoidance schemes. We are doing our best as part of our effort to get back to a balanced budget in the medium term, and this is part of our plan to do that. Fighting things like contraband tobacco and the loss of revenues through contraband tobacco will help us meet that goal.

In May of this year, our government announced a $30 million investment to target international tax evasion and aggressive tax avoidance.

This investment includes new resources of $15 million through economic action plan 2013 to establish the necessary systems for the CRA to receive reports from banks and other financial intermediaries on international electronic fund transfers of $10,000 or more, and an additional $15 million in reallocated CRA funds that will be used to bring in new audit and compliance resources dedicated exclusively to issues of international compliance and revenue collection that were identified as a result of measures outlined in our last budget.

To ensure that these activities move forward quickly, the government announced the creation of a dedicated team of CRA experts responsible for the implementation of the international tax evasion and aggressive tax avoidance measures announced in that budget. It would ensure that the full force of the agency's international compliance and auditing resources are brought to bear on individuals or businesses seeking to hide money or assets offshore.

Again, a key part of this bill is to ensure that are we cracking down on the organized crime that uses contraband tobacco as a revenue source and deprives the Government of Canada of a revenue source as well.

I will give a bit more background on what Bill S-16 does.

First of all, the bill fulfills a platform commitment. In 2011, our government made a commitment to establish a mandatory jail time for repeat offenders. Bill S-16 would bring amendments to the Criminal Code to establish a new offence of trafficking in contraband tobacco, with mandatory jail time for second and subsequent convictions.

It is important that we send the message that if one is going to break the law, one would not get repeated slaps on the wrist and be allowed to walk away and treat the justice system as a joke. There will be real penalties. The primary target of this new offence is organized crime and those who are involved in the trafficking of contraband tobacco in large volumes.

The definition of trafficking would include sale, offer for sale, possession for the purposes of sale, transportation, distribution and delivery of contraband tobacco. The penalty for the first offence would be up to six months of imprisonment on summary conviction and up to five years of imprisonment if prosecuted on indictment.

The bill also proposes that repeat offenders convicted of this new offence on indictment would be sentenced to a mandatory minimum penalty of 90 days on a second conviction, 180 days on a third conviction and two years less a day for any subsequent convictions.

We are taking action and fulfilling our campaign promises. We are targeting organized crime and working to ensure that the revenues would be going into government coffers at all levels to promote smoking cessation programs, reach out to our youth and fund health care and other services that we have grown to rely on. An important part of maintaining those important services is passing this bill and cracking down on contraband tobacco.

I urge all members of this House to support the bill.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, I would point out to my hon. colleague that an increasingly large proportion of contraband tobacco is coming in from other countries, but maybe he already knows that.

Was that taken into consideration in the drafting of this bill? If so, exactly which clauses refer to that fact?

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Mr. Speaker, obviously we work not only with our partners at all levels of government but also with the RCMP and our international partners as well to tackle this important issue.

If the member refers to the speech of the Parliamentary Secretary to the Minister of Public Safety, she will see that the parliamentary secretary gave a comprehensive analysis of the work we have done with the cross-border group and U.S. authorities to ensure that we are able to respond when there is suspicion of smuggling of goods or suspicion that contraband tobacco may be crossing an international border.

Certainly that is something we are aware of and something we are working on proactively. I hope we can count on the hon. member's support when we bring forward measures to tackle that sort of activity.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, as I indicated earlier, illegal importation of cigarettes is very costly in different ways. The most obvious ones would be the potential loss of revenue, the health care impacts of having cheap cigarettes on the market and the activities of gangs in selling illegal cigarettes.

One of the issues that is really important for us to recognize is that the government needs to be more proactive in dealing with the number of people who take up smoking.

I see that $90,000 can be spent on just one economic action plan ad. That 30-second ad could be put into our high schools to promote and encourage young people against even taking up smoking in the first place. That would have an impact on illegal cigarettes and the demand for illegal cigarettes.

I am wondering if the member would agree that the government could be doing more and could even use some of the resources it is currently using in the exploitation of tax dollars to finance advertising for its economic action plan. Does he not agree that there is some benefit in reallocating those dollars and putting them into ways to decrease the demand for cigarettes in general?

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Mr. Speaker, our spending to promote government initiatives is much lower than the last year of Liberal government. We have also increased our spending on health transfers. It will be up to $40 billion by the end of this decade. Members can contrast that with the Liberal Party record of cutting $25 billion in health and social transfers.

Young Canadians know the dangers of smoking, but we need to reach out to them where they live. The way we could do that is at the local, provincial and local school board levels. Those are the levels that are going to reach out with an individual plan that will work best for those communities. To have a one-size-fits-all approach from Ottawa is not the best way to do it.

We have given an unprecedented level of resources to the provinces to deal with education and health care. They are in the best position to direct those dollars.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, my colleague has pointed out some personal stories of people who have been impacted by addictions to tobacco. All of us could share too many of those, unfortunately, and too often the stories start with an introduction to tobacco at a very young age.

I would like my colleague to comment again on the importance of dealing with contraband tobacco as it relates to high school students and even younger students becoming addicted to tobacco because it is so readily available through the contraband route.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Mr. Speaker, when we were talking about young people, both of the individuals I referred to started smoking early in their teens, and it led to tragically shortened lives. One of the things that we know affects youth smoking rates is the cost of cigarettes and whether they are available at a cheap rate.

The Parliamentary Secretary to the Minister of Public Safety pointed out that one-third of the cigarette butts found at Ontario high schools are contraband. The reason is that young people generally cannot afford to pay for regulated tobacco products, so they look to a cheaper product.

Contraband tobacco is actually targeting our young people. It makes it easier for them to get into this highly addictive and deadly habit. We need to stop the supply of contraband tobacco, which will reduce youth smoking going forward.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, it gives me great pleasure to offer my support of Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco). It is another example of the commitment of this government to the safety and security of Canadians.

I am pleased to speak to the merits of the bill for two main reasons. First, by creating a new Criminal Code offence regarding the sale and distribution of contraband tobacco with mandatory minimum penalties for repeat offenders and by establishing a 50-officer RCMP anti-contraband force, the government is fulfilling the commitment it made to Canadians in its 2011 election platform.

Second, by carefully tailoring the measures in the bill, especially those related to the penalties provisions, the government has created an effective vehicle to stem the tide of illicit tobacco that is washing over Canadian society.

As I will discuss, this tide of large-scale criminal activity raises serious concerns not only for Canada's fiscal health but also for the physical health of Canadians.

Before I describe in more detail the measures proposed by Bill S-16, allow me to provide a bit of context for hon. members that may help them to appreciate the gravity of the problem that Bill S-16 seeks to address as well as the careful way in which the bill has been drafted to accomplish its goal.

At the outset, it should be noted that according to Health Canada figures, in 2011 Canada's approximately five million declared smokers consumed between 125 million and 150 million cartons of legal cigarettes. Given the illegal nature of the manufacture and distribution of contraband tobacco, it is very difficult to estimate how much market share is occupied by these illegally produced tobacco products in Canada. Studies of the issue provide figures ranging from as low as 12% to as high as 33%, with significant provincial variations.

Some of the human costs associated with illicit tobacco trade have already been mentioned. The first and most obvious is the serious health risk associated with smoking, which is exacerbated by the fact that much of the contraband tobacco is of very poor quality and contains harmful contaminants.

In the 1980s and 1990s, the trafficking problem resulted from our own legally produced and less harmful tobacco products being smuggled back into Canada after they had been exported to the United States. While this still happens, although on a smaller scale than 20 years ago, the present problem is that much of the illicit tobacco being consumed in Canada was either illegally manufactured in Canada for the United States in less than ideal conditions or is made up of counterfeit tobacco products imported from abroad.

We know that smoking legally produced tobacco products is dangerous; it is even more dangerous to smoke the adulterated or contaminated products that are provided by illegal sources.

Who is smoking contraband tobacco? Here we come to another of the human costs to which I referred.

At a time in Canadian history when smoking is declining, we find that two of the groups most likely to purchase illicit tobacco products are teenagers and young adults. These, of course, are the very people we wish to most discourage from smoking at all.

In short, the illicit tobacco industry is not only supplying an existing clientele; it is also cultivating a new clientele base that will enable it to flourish into the future.

This leads me to another and more dangerous human cost associated with contraband tobacco that I wish to mention. It has to do with the respect for the law and the attitudes that allow illicit tobacco sales to thrive in this country.

In a 2009 report to the Minister of Public Safety, the task force on illicit tobacco products pointed to four reasons that illegal tobacco products are in such demand in Canada: first, the motivation of smokers of all ages to find low-cost options to satisfy their tobacco cravings and addictions; second, low public appreciation for the harmful consequences of illegal tobacco markets; third, the ease of access to illegal tobacco products; and fourth, the fact that illicit manufacturing and sale of tobacco products was not only tolerated on first nations reserves, but was an important source of revenue there.

There is something wrong when Canadians think it is acceptable to purchase an illegal product, especially when its production and distribution is so intimately connected to organized crime activity in Canada and abroad.

One of the benefits of Bill S-16, aside from curbing the illicit production and sale of contraband tobacco would be to help raise public awareness that these are crimes that will not go unpunished.

To date, law enforcement in this area has relied on the Excise Tax Act with its focus on fines and seizure of illegal tobacco products and vehicles. While there have been some high-profile seizures, I think it is fair to say that it has not stemmed the illegal trade in any significant way. Sterner measures are clearly called for.

This is especially so in light of the known involvement of organized crime groups in this illicit trade and the fact that tobacco smuggling is often accompanied by human, drug and weapons smuggling.

In this regard, it is well accepted that the effectiveness of sanctions depends on their severity, their swiftness and their certainty. Bill S-16 would ensure severity by making the trade in illicit tobacco a criminal offence. A new Criminal Code provision would therefore outlaw possession of tobacco for sale, and the sale, the offer for sale, the transport, the delivery or distribution of a tobacco product that has not been stamped in accordance with the Excise Act.

Criminal law is a powerful tool. It would be utilized by federal prosecutors who would have concurrent jurisdiction with provincial Crown prosecutors to enforce this new sanction. The swiftness of criminal sanctions would be enhanced by the creation of a special 50-officer RCMP task force that would focus on the eradication of illicit tobacco trade.

As we know, better and swifter enforcement begins with the investigation and the arrest stage of criminal proceedings. With these new ressourses, the authorities should be able to make a real dent in the illicit tobacco industry. Mandatory minimum penalties for repeat offenders would ensure the certainty of punishment, the third criterion for effective law enforcement.

The maximum penalty for a first offence would be up to six months' imprisonment on summary conviction or up to five years' imprisonment in the case of an indictment. However, repeat offenders in cases involving 10,000 cigarettes or more, 10 kilograms or more of another tobacco product, or 10 kilograms or more of raw leaf tobacco would be sentenced to a mandatory minimum of 90 days' imprisonment on a second conviction, a mandatory minimum of 180 days on the third conviction and a mandatory minimum of 2 years less a day on any subsequent conviction.

These are serious offences. Let us recall that they are minimums. Sentencing judges are free to go beyond them on a second, third or subsequent conviction, depending on the circumstances of any individual case.

In closing, Bill S-16 deserves the support of this House and of Canadian society in general. It would tackle a serious and growing problem that deserves our immediate and focused attention. I therefore urge all hon. members to join me in supporting this worthwhile and carefully crafted legislation.

I remain ready, willing and most desirous to answer any questions members may wish to pose.

[Ted Menzies, Conservative, Minister of State (Finance)]

Mr. Speaker, I found it most interesting, listening to this member speak on this particular subject.

As far as all caucus members on this side know, this member knows a lot about this issue. In fact, he has been raising it, time and time again, with all of us in different meetings. I am sure he is very pleased that we are finally moving forward on this.

It is a challenge, and he has shared the challenges in his region of Canada. We all share this; even in my riding of Macleod we face this challenge. I will never forget one evening, walking down one of the main streets here in Ottawa, walking home and seeing the trade in plastic Ziploc bags of contraband tobacco. It was in full sight.

I wonder if the hon. member can provide some of what is in this piece of legislation that would perhaps help us stop this illicit trade in contraband tobacco.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, the hon. member from Macleod is very right. I have been pushing, shoving and stomping my feet with regard to our government taking some action in this regard. I know we have taken many steps, but to me this is one of the most significant steps because it now makes it a criminal offence to be engaged in the sale, delivery, distribution, transportation and possession of these illicit cigarettes.

Representatives of the confectionery industry have, I am sure, come to most of the members in this place and told us of many of their members having to close their doors because the sale of legal tobacco has now ended or been significantly reduced in their particular area because of illicit tobacco, most of which is distributed by and has been backed by organized crime.

We have outlined this and we have had questions. Children in primary and secondary school are buying cigarettes at five cents apiece, being hooked on illegal tobacco. I wish the government received zero dollars from the sale of legal tobacco. That would be a huge benefit to this country in the health care costs. However, it is a legal drug, this nicotine that we are stuck with, and we need to at least curtail its growth. We have been somewhat successful. By this illicit trade in illegal tobacco, we are now hooking children—I say “we” because we have not done enough. Our government is doing as much as it can, and this legislation would push that, but we need to do more.

With this legislation, my constituents would begin to see that they are pushing their member of Parliament, and this government has gotten somewhere.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, of course I work with the hon. member for Northumberland—Quinte West on the public safety committee, and I have enormous respect for his experience in this field.

I think the member knows from being in policing that one of the best ways to make progress is through knowledge of the community and consultations with members of the community. What this looks like to me is the same old Conservative playbook on contraband tobacco. I wonder how many consultations were done with first nations, with the provinces and with others involved in this area, before producing this bill.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, the first area of consultations is with our own constituents. In the last seven years, almost every second month someone has come to me and asked what I am going to do about the people who are selling illegal cigarettes out the back door and closing legal businesses, in particular the corner stores that we all go to on a Sunday afternoon when most of the big stores are closed, where we go to buy our chocolate bars or lottery tickets or whatever we are going to buy. These stores are drying up around my area, especially the little “mom and dad” operations that are not associated with the big chains. They are the people being put out of business by the sale of illegal cigarettes.

We all know where most of them are emanating from, and I have to say it in this House that they are emanating from mostly first nations territories where somehow, some way, these illegal cigarettes are being sold. What is more, they are now being sold in our schoolyards.

This very House, in a previous Parliament, did an exhaustive study on the sale of illegal and illicit cigarettes. It is out of that study that this legislation emanates. I mentioned in my speech that there was a panel that advised the Minister of Public Safety on it; so we have done those consultations.

The time for consultations is over, and the time for action is now. That is why we ask that Bill S-16 be supported.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I want to start with a bit of personal history. Many lives were saved in my family by my grandfather. In 1964, there was the release of the report of the U.S. surgeon general on smoking and health. It was a U.S. report, yes, but a very influential one throughout North America. That report really changed opinion on smoking in North America. Before that report, there was still a debate about the dangers of smoking, which was fuelled by the propaganda of the tobacco companies against the research that was beginning to show the serious harms to health. That report demonstrated a causal link for the first time with incontrovertible evidence that there was a 70% increase in mortality rates for smokers over non-smokers and a 9 to 10 times higher risk of lung cancer.

My grandfather, whose name was John Garrison, put out his last cigarette. He had smoked since he was a kid. More importantly, he said any family member who went to his house would also stop smoking that day. He enforced that on everyone in our family. At the time, I was 13 and it made a very big impact on me. I have never been a smoker as a result of that very strong role modelling he did in the family. There were a few of my cousins who still sneaked around out back, I admit, but he saved many family members. There were many heavy smokers in my family at that time and his influence was very important. At that time, we saw the beginning of a change in social attitudes toward smoking.

A second report I also want to give credit to is the 2009 report of the Canadian Expert Panel on Tobacco Smoke and Breast Cancer Risk. This demonstrated the link between breast cancer and smoking, but it did something even more important. The report showed incontrovertibly the link between second-hand smoke and breast cancer. It was very important in changing people's attitudes about smoking, important in their accepting that second-hand smoke was dangerous, particularly for women, and that the risk of breast cancer increased between 10% and 30% for those exposed to second-hand smoke. We have seen the social mores change to where smoking has been banned in bars, pubs and restaurants, not just to protect smokers but, in fact, to protect those who have never smoked from that increased risk of cancer.

There is no doubt about the seriousness of this issue and the social concern in Canada regarding the issue of smoking. As my hon. friend from Northumberland—Quinte West said in his speech, the biggest impact we are seeing is on young people, and the biggest impact of contraband tobacco is definitely among young people. We on this side are supporting this bill going to committee because we believe that this is a serious problem and that we can change social attitudes about contraband tobacco. Again, my hon. friend made reference to that in his own speech. People need to understand the reasons why contraband tobacco has to be limited or wiped out in this country.

My hon. friend will not be surprised that New Democrats will be asking some serious questions when the bill goes to committee about the effectiveness of the measures proposed in this bill. Members speaking previously, in particular the Parliamentary Secretary to the Minister of Public Safety, have pointed to this bill as targeting organized crime. I have questions that I know we will be asking in committee. We need to ask the experts whether higher penalties and mandatory minimum sentences actually deter people involved in organized crime. Frankly, I do not know the answer to that with regard to contraband tobacco, but I do know that the evidence in almost all other areas of law enforcement is that organized crime carefully counts the risk when it gets involved in crime. However it is not counting the risk of longer penalties or minimum sentences; it is the risk of getting caught that is calculated.

Is a mandatory minimum sentence really going to deter organized crime? Most people involved in organized crime are not the people actually transporting the goods and not the ones who are going to end up with the sentence. They are the people organizing and profiting from it. I do not really know in the case of contraband tobacco, because I am not as familiar with that, as it is not as large a problem in my own community as it is in many others in Canada.

In every other area, as I have said, we have seen the impact of mandatory minimum sentences and longer sentences. It usually happens to the little guys, as I mentioned, the people who are carrying out the orders of the organized crime syndicate, the people who, for whatever reasons, are living in near-poverty, perhaps affected by mental health problems or addiction or having problems getting by and supporting a family, and taking the opportunity that is offered by organized crime to make a little extra money in participating in the smuggling of contraband tobacco. I believe they are the people who are going to get hit with longer sentences and mandatory minimums.

One very serious question that we will be posing in committee is whether this is the right tool to get at organized crime as the government has claimed and what consultations did the government do with experts in the area to find out whether this is the right hammer to use for this nail, if I can use that analogy, which gets overused many times in this House.

Another question we will be asking is whether the government has looked carefully at sentences that have already been given out for repeat offenders in the area of contraband tobacco. We could look at the bill and it might say that for this amount of tobacco and this many offences there would be a mandatory minimum of x amount of time. What I suspect we would find, as with many other bills the government has introduced, is that judges already hand out far longer sentences than the mandatory minimums. There is a kind of perverse effect in some areas where mandatory minimums may actually have driven down the amount of time some people are spending in jail. That is for some people. They will increase the time most people are spending in jail. However, have we actually looked at what judges are doing in this area before we brought legislation in to establish these mandatory minimums?

There is a very interesting study that was done quite some time ago in Canada where the public was given the facts of a crime and asked to assign a sentence for it. In something over three-quarters of the cases, the public assigned lighter penalties than the judges had actually assigned in the cases.

Therefore, one of my questions is, after seven years of the government appointing judges, why does it not trust the judges it is appointing? What is wrong with the judges it is appointing? Does it not trust them to make decisions, in these cases where they have to establish mandatory minimums and take away that discretion from judges? We will be asking what the real situation is for sentencing at the present time in cases dealing with contraband tobacco and who is getting sentenced. Is it the kingpins of organized crime who are getting sentenced? I doubt it. We need to ask those questions, such as is this the right hammer for this particular nail? We have some doubts on this side as to whether that is true.

However, recognizing the importance of this issue, again we are supporting this to get it to committee, to try to find out from expert witnesses the best ways of tackling this problem, of keeping contraband tobacco out of the hands of our kids and of reducing the social impacts of this tobacco. I guess I can say that I cannot wait, although there are many of us who would like to speak to this bill and I am not sure that we needed time allocation to get through a bill like this. However, it is not the first time it has been used in the House

When we look at what is happening with the Canada Border Services Agency, we see enormous cuts. The government likes to tell us there have been increases in first nations policing and in border services funding. However, if we go back to year zero and calculate the increases from the very beginning, there are always increases. What we have seen in the last two budgets is reality. We have seen severe cutbacks in the funding for CBSA and for public safety in general. Budget 2012 announced a cut of $687.9 million to the public safety expenditures. The RCMP saw cuts of $195.2 million. Let us think back to how organized crime calculates: it calculates the chances of getting caught. Let us cut the RCMP. Let us reduce its ability to do enforcement work and see the impact that would have on contraband tobacco.

The CBSA saw cuts of $143 million. Those are spread across the country; when we do that it may not sound like much. According to the union, it may result in 325 positions across the country, and in British Columbia that would be something like 50 positions. Those are front-line positions. The rest of the cuts are in the back office. That sounds good. It makes us think of an accountant or someone doing photocopying. What are the back office functions in the CBSA? The union has estimated that this would cost 100 jobs in the intelligence functions of the CBSA because that is a back office function. Therefore, there would be 100 fewer people analyzing the data, looking at the patterns and trying to figure out where contraband tobacco is coming from and working on problems like that.

That was the 2012 budget. These cuts continued in 2013 and additional cuts were applied on top of those.

Most important probably in 2013 was the failure to renew the police officer recruiting fund. The issue of first nations policing was raised earlier. Cancelling that fund caused the loss of 30 front-line first nations police officers in Ontario.

In addition, the 2013 plan and priorities for public safety announced an increase of $20 million in countering crime and a $2.4-million decrease in national security. Even in its own report, the department said “That the Government Operations Centre infrastructure may be unable to support a coordinated response to large-scale or multiple significant events affecting the national interest [and] that current policies and strategies may be insufficient to address the evolution of organized crime”. The government made cuts to the funding of the fight against organized crime, the very people the government said are responsible for contraband tobacco.

One of the things we are going to be asking in committee is why not apply the needed resources for enforcement. I am going to make the same argument that is made everywhere else, and that is, if organized crime is calculating its risks, then let us make it calculate that risk at the front end by putting resources into enforcement where they are really needed.

The last speaker, and this time I will not name him, said, and I am not sure the term he actually used but I think he said that most of the contraband tobacco is coming from first nations. I met with the tobacco companies and I asked them that question. They admitted to me that they estimate that over 50% of the contraband tobacco coming into this country is coming through the Port of Vancouver from China. Often we focus too much on what is only one single source of contraband tobacco and we ignore the large one.

Why is it coming from China through the Port of Vancouver? There are two reasons for that. The first reason is that there is a huge illegal tobacco manufacturing industry in China. It is underground and it avoids Chinese taxes and regulations. Producers are already producing illegally. The second reason is that the cuts that we have made to the Canada Border Services Agency mean that not one single container coming through Vancouver port is actually opened and inspected unless there is a specific tip or piece of information about something illegal being in it.

Containers coming through Vancouver are not inspected anymore. Many of them are loaded on trains and arrive at a large rail yard in Ontario where there is one inspector for containers. While I have not been told directly, I am sure the same policies are in effect. One person cannot open and inspect all the containers. I suspect the policy in place in Vancouver is probably also in place at the rail yard Ontario: that containers are not opened unless somebody has said that X is going to be found in one. Who would say in that container we are going to find this? That would be done by those intelligence officers with the Canada Border Services Agency who are being laid off.

The situation in Vancouver with contraband tobacco is going to get worse. Probably what is most shocking about contraband tobacco in Vancouver is that it is high-quality fake. I have actually seen some of it. We cannot tell these packages from legitimate cigarette packages, including the fake excise stamps on them. They are almost impossible to distinguish. When we are trying to discourage the public from buying contraband tobacco, this is a problem.

How does one get hold of these cigarettes? I do not smoke, as I have said. I do not buy cigarettes, but I do know some people very close to me who unfortunately do smoke. In Vancouver, one can go to any number of corner stores and ask for the special or the cut-rate cigarettes and they are brought out from underneath the counter. They look just like regular cigarettes but people pay a lot less.

The other thing about those Chinese contraband cigarettes is that we do not know what is in them. As a result of being produced illegally and without inspection in China, I would hate to think what kind of things get put into those cigarettes as filler. There are probably very large health risks involved.

When we are talking about this issue we are going to have to pay attention to what tobacco companies will say is becoming an increasingly large part of the problem, and that is contraband cigarettes coming in from China. I do not see anything in this legislation that would do anything about that very large problem in terms of contraband tobacco.

A contributor to this, of course, was the Liberal Party in the 1990s. We used to have federal ports police in Vancouver. They were funded. They did inspections on containers and had people working intelligence on the illegal goods coming in.

I am going to have to include our friends down at the far end here who have been very sanctimonious on this but who have actually contributed the initial problem in the Vancouver port with all kinds of counterfeit and illegal goods by eliminating the ports police. They said to the municipalities of Vancouver and Burnaby, “It's up to you, boys. We're just leaving it to you. No funding. No assistance. You now police the port”, so what do they do? They maintain their highest priority, which is protecting their citizens, and they do very little in the area of the ports in Vancouver and Burnaby because it is not really their responsibility as civic police to do that.

Are there better ways to tackle this question of contraband tobacco? I believe there are.

The hon. member for Northumberland—Quinte West came with the public safety committee to visit Prince Albert, Saskatchewan and Calgary. We saw some very impressive things going on in those police forces. On a very regular basis, in the case of Prince Albert a weekly basis, the police were brought together around the table with social service, mental health, addictions and child protection agencies, and a representative of the Grand Council of First Nations. They tackled individual high-risk, high-demand on the police system cases on a family basis and delivered services to those families. Prince Albert has a very impressive record for the first year of this new system, which is called the HUB system. They have reduced violent crime by 38% in a year in a community that has high rates of poverty, addiction and alcoholism. They have made very significant progress in building a better community, the most important thing, but also in reducing the demand and costs for policing and allowing them to reallocate police resources to things that we would think of as normal policy duties rather than social order kinds of responsibilities.

When we are thinking about contraband tobacco and needing police resources, which I believe we do, to do the enforcement work in this area, where are we going to find them if we do not free up resources in policing?

Our committee is working on a report that we will be done in the fall. I know that members of all parties were very impressed with this model of policing. Rather than more mandatory minimums and longer sentences for these kinds of things, maybe we need to look at that new model of policing. This would free up resources so that we could do the enforcement that would be really effective in getting at the real causes of problems with contraband tobacco and the largest problem, which I would assert is China and the lack of inspections in our port in Vancouver.

I know I am probably getting close to the end of my time. Let me wrap by saying, once again, we on this side do acknowledge contraband tobacco is a problem. We would have liked to have seen the government consult more, work with first nations communities, work with others who have been involved in this field to find what things would be really effective instead of going back to the old playbook and bringing out increased sentences and mandatory minimums as the only solutions.

In committee, we will be asking government members those questions. If they can show us the evidence that these are going to be effective, they might able to get our support. The problem is they are not effective anywhere else. They are not effective in any other area of law enforcement.

In any event, let us have that debate. Let us see what the experts say about contraband tobacco. Let us see what they suggest would be good solutions to this when we get to committee. Then I hope the government will be open to some other approaches to this kind of problem and not what we have seen too often in this House, which is, “Take or leave it. Here's the legislation. We've introduced it. You've only got, let's say, four hours to debate it. We're not going to amend it and we're going to pass it”. To me that is not the way this House of Commons should work.

I have to say to my colleagues from Medicine Hat and Northumberland—Quinte West and the public safety committee, we have tried to have a more consultative model. We have tried to work together to find common solutions. I would like to see that happen, not just in our committee, but also on the floor of this House of Commons.

My hope for Bill S-16 is that we will be able to work together on what is really effective and accomplishes what we need to do to keep contraband tobacco off of our streets, out of the hands of our kids, and from making negative contributions to our health in this country. I look forward to having that debate with the Conservatives and working with them to find the real solutions to the problem of contraband tobacco.