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

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, it is not very often that I agree with my colleague.

Indeed, there is a very significant lack of co-operation and synergy between all governments and between the different levels and departments of government. In fact, no one has been able to connect the dots between the tax hikes, the costs of health care and the impacts on consumption.

When taxes on legal cigarettes are increased, there is more and more contraband tobacco. Even if taxes were substantially increased, the resulting benefits would never be enough to counteract the impact and effects of smoking on health.

As I said, prevention and good co-operation are the way to go.

I am really quite surprised and amazed to agree with my colleague. Obviously, the focus should be on promoting a relationship of synergy and co-operation.

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

Mr. Speaker, I thank my colleagues.

I would like to ask my colleague's opinion on the fact that we are members elected by the people. We are here to legislate. We were elected as legislators, but the last word goes to the other chamber, the Senate, which was not elected but can make the final decisions.

This bill, which would amend the Criminal Code, comes from the unelected other place.

What does he think of that?

[Jean Rousseau, NDP, Compton—Stanstead, QC]

I thank my excellent colleague for her question.

I took notes about why this came from the Senate.

I spoke about leadership earlier. Once again, the government is not showing any leadership in protecting the health and safety of Canadians. It just repeals a little section of the Criminal Code here in the House, no problem. It adopts a time allocation motion for this bill.

This bill originated in the Senate. How many bills have we seen from the Senate this week and last? This shows that the government is running out of steam and has no respect for the chambers. Members of the House of Commons are elected. This is the chamber that should be introducing bills that affect the lives of Canadians, especially when we are talking about protecting health and safety.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I am pleased to speak to Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco). As has been stated very clearly, the NDP is in support of sending this bill to committee and having a closer look at it, a bill that aims to address a very serious issue. Contraband tobacco is an extremely serious problem, both in public health and safety and of the lost revenue for the various levels of government.

However, the bill raises certain issues that need to be clarified in relation to the government's chosen approach. Another issue that is very important to address is the need for consultation with the provinces, territories and first nations communities. We are also concerned about the issue of minimum mandatory sentences that are provided in the legislation. Therefore, we believe this requires further study in committee.

In its 2008 report, the RCMP stated that its:

—key concern is the increased involvement of organized crime implicated in illegal tobacco activities for monetary gain. The public needs to be aware that profits from illegal tobacco products are also funding other criminal activities, such as drug and gun trafficking.

In terms of public health, contraband tobacco and the use of tobacco products are interconnected. We know tobacco seriously harms the health of Canadians. Because contraband cigarettes are available at a lower cost than cigarettes sold in stores, they can encourage consumption, especially for young people who might find it more difficult to obtain legal tobacco products. Furthermore, because the quality of illegal tobacco products goes unchecked, these products may have an even more harmful impact on the health of consumers.

In understanding the bill, and it is very clear to us that it requires more study, the NDP believes that various key aspects of this need to be examined further. A key aspect that must be examined is the need for the government to invest resources in policing and in the Canadian Border Services Agency to properly address this issue. Unfortunately, all we have seen from the government are reckless border cuts and a refusal to renew the funding that allows for more police officers on our streets.

I recognize that cuts to policing and investigative resources began under the Liberal government, when the port of Vancouver, for example, and other entry ports lost policing and investigative capacities as a result of the Liberals budget cuts. Unfortunately, the Conservative government has very much continued this trend. We know of cuts, certainly in the last year, to the Canadian Border Services Agency. This affects the capacity Canadians have in ensuring that what is coming through the border is not contraband tobacco and the serious stopgap to the kind of illegal trafficking in general that we know takes place across our borders.

It is absolutely critical for the Conservative government to go back on the kinds of cuts we have seen and seek to invest in policing capacity, both in terms of the CBSA and more broadly in terms of police services.

I want to speak briefly to what it means to have a lack of policing services in communities that wrestle with contraband and broader security issues.

As the MP for Churchill, I represent one of the largest ridings in Canada in terms of geography and size. What that means is we have massive expanses of territory and an RCMP and police force that are stretched to provide critical policing services.

I have had the pleasure of meeting women and men who are part of the RCMP working in communities across the north. I have great admiration for the work they do, but I recognize they often do it for longer periods of time, putting in overtime and sometimes exposing themselves to risk because they do not have the kind of staffing complement they need.

I also know in the investigative capacity they are often overstretched. I will use the example of a recent murder in one of the northern first nations I represent. It is an isolated community and the ability to get in and conduct a proper investigation was hampered by the fact that the RCMP could not send the right people in at that time. There was a waiting list for the specialists who needed to come in, owing to the fact that the RCMP was short staffed, especially when it came to the north.

I also want to note that first nations communities often struggle with social challenges and some very difficult situations. They want to better police their communities. Band constables are often the go-to people in this case.

Unfortunately, the Government of Canada has pulled away from the kind of commitment first nations want to see when it comes to band and aboriginal policing. Certainly in our province of Manitoba, I know first hand that RCMP officers often depend on band constables to go out and do that initial investigative work and build those relationships that need to be had to get to the bottom of what has happened and to begin the process of seeking justice.

Unfortunately, I have been in many communities where band constables have had to be laid off because the funding has dried up. I know most recently that the Island Lake communities, the Island Lake First Nation, and particularly in Garden Hill, were very concerned about their loss of band constable funding coming into this fiscal year.

I heard from leaders and community members who wanted to ensure that the violations of public unrest, incidents of vandalism or abuse were dealt with properly. The issues they raised were the fact that in Garden Hill, for example, the RCMP had to fly over the lake in a helicopter when the lake was not frozen to undertake its policing duties.

Without band constables, that takes a long time. RCMP officers are not always able to make it over the lake in a helicopter. Therefore, instead of depending on band constables who are on-site in the community, the community is being put further at risk as a result of the government's failure to come to the table and find a solution to policing issues that work for communities like Garden Hill.

First nations and northern communities want to make a difference, whether it is on issues of contraband or criminal behaviour. However, the reality is that policing needs support from the federal government. Communities deserve to have support from the federal government in bolstering the police presence in their communities, whether it be the RCMP or band policing.

It is of grave concern that despite the government's rhetoric of being tough on crime, when we actually look at the figures and the reality in northern regions like the one I come from and I represent, has not translated into a difference of supporting first nations, hiring band constables, ensuring that the RCMP has the support and the investigative capacity required in northern regions when something as serious as a murder takes place. They need to speedily react and start a longer term investigative process.

I also want to speak to the need to support our border service agents. That, to me is an important point that unfortunately is missed in Bill S-16, and we hope to raise it at committee. Anybody who has gone through the border, and I had the opportunity to travel to the states through the Manitoba border crossing at Emerson, would have seen CBSA agents doing very important work, ensuring that our provinces and all Canadians are being looked after as people travel back and forth through the border.

It is unfortunate that the government has not recognized the need to keep CBSA agents safe, to make sure they have the staff complement and backup they need in order to truly react to issues of contraband and other aspects of illegal trafficking.

With that, I am open to questions and comments.

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

Mr. Speaker, I guess I should start by saying that I have been a member of the public safety committee for approximately seven years now. We are looking into the economics of policing. I wonder if the hon. member is aware that there has actually been a significant increase in first nations policing over the last several years. As a matter of fact, it is somewhere close to 30%. Also, I wonder if the hon. member is familiar with some of the statistics surrounding first nations policing.

Having served in the north of Ontario, I understand completely that there is a difference in policing in those remote communities and that the cost of providing policing is significantly higher than that of almost any other police department in Canada.

If the hon. member wants to tell Canadians the facts, she might want to revisit the fact that we have not cut back on first nations policing. As a matter of fact, the federal government has increased its commitment by somewhere in the vicinity of $600 million.

The hon. member might want to consider rephrasing some of the information she has just given to the country.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I struggle with the member's tone because I actually know the facts. I live in the north and I see the reality. I have been to communities where band constables have been laid off. I have spoken to leaders who, at the last minute, at the eleventh hour, have been trying to get the federal government to the table to support their band constable program.

I will share a little anecdote. I used to teach for the University College of the North. It used to offer a policing program for band constables. As a result of a lack of government funding, funding that was cut off by the Conservative government, the program was eliminated. People who wanted to be band constables could no longer get the training to provide that service. People could not get the kind of expertise and could not be recognized as band constables as a result.

What ended up happening is that in communities like Lac Brochet, the RCMP had to shut down the trailer that was used as a holding cell because there was no band constable trained in the community to provide safety to the person in the holding cell, but more importantly to the people in the community. What ended up happening was an isolated community had to wait for a plane, if the weather was good, to come and pick up someone who had been accused of a crime, however long that might take, which put the community into a very vulnerable position.

I would welcome the member, and certainly ministers of the crown, and members of the government to spend some time in our north and in isolated communities that depend on an RCMP service and need that support, first nations that depend on support for the band constable program. That support is clearly not there from the federal government.

If the government truly believed in building safer communities, it would invest in policing in the north the way it should be.

[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.