This bill was last introduced in the 41st Parliament, 2nd Session, which ended in August 2015.
Peter MacKay Conservative
This bill has received Royal Assent and is now law.
This is from the published 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 the Library of Parliament. You can also read the full text of the bill.
The House proceeded to the consideration of Bill C-10, an act to amend the Criminal Code (trafficking in contraband tobacco), as reported (without amendment) from the committee.
The Deputy Speaker Joe Comartin
There being no motions at report stage on this bill, the House will now proceed, without debate, to the putting of the question of the motion to concur in the bill at report stage.
Some hon. members
Agreed.
Some hon. members
Agreed.
Tackling Contraband Tobacco ActGovernment Orders
Mississauga—Erindale Ontario
Conservative
Bob Dechert ConservativeParliamentary Secretary to the Minister of Justice
Mr. Speaker, I am pleased to speak today in favour of Bill C-10, an act to amend the Criminal Code (trafficking in contraband tobacco). This bill proposes amendments to the Criminal Code to create a new offence of trafficking in contraband tobacco and to provide minimum penalties of imprisonment for persons who are convicted for a second or subsequent time of this offence.
To help reduce the problems of trafficking in contraband tobacco, the government committed, among other things, to establish mandatory jail time for repeat offenders of trafficking in contraband tobacco in its 2011 election policy platform. This bill would fulfill that commitment.
Indeed, the bill prohibits the possession for the purposes of sale, offer for sale, transportation, delivery, or distribution of a tobacco product or raw leaf tobacco that is not packaged unless it is stamped. The terms “tobacco product”, “raw leaf tobacco”, “packaged” and “stamped”, have the same meanings as in section 2 of the Excise Act.
The penalty for a first offence would be up to six months imprisonment on summary conviction and up to five years imprisonment if prosecuted on indictment. Repeat offenders convicted of this new offence in cases involving 10,000 cigarettes or more, or 10 kilograms or more of any other tobacco product, or 10 kilograms or more of raw leaf tobacco would be sentenced to a minimum of 90 days on a second conviction, a minimum of 180 days on a third conviction, and a minimum of two years less a day on subsequent convictions. Overall, the proposals represent a tailored approach to the imposition of mandatory minimum penalties for serious contraband tobacco activities. The bill proposes minimum penalties only in cases where there are certain aggravating factors present.
The contraband tobacco market first became a significant issue in the late 1980s and early 1990s, when the taxes on cigarettes were increased sharply to raise government revenue and deter individuals from taking up or continuing smoking. During that period, more and more legally manufactured Canadian cigarettes destined for the duty-free market began to make their way back to the Canadian underground economy. The high retail price of legitimate cigarettes made the smuggling of cigarettes across the border a lucrative illicit business.
The RCMP and Canada Customs seized record quantities of contraband tobacco. The RCMP was also engaged in investigating this illegal activity at its source. These investigations eventually led to negotiated settlements involving certain tobacco companies, a landmark agreement signed in July 2008 that set a combined total of $1.15 billion in criminal fines and civil restitution, to be paid by the companies over 15 years. Also, two guilty pleas entered in April 2010 by JTI-Macdonald Corp. and Northern Brands International resulted in $550 million in criminal fines and civil restitution.
By the mid-1990s, this type of smuggling activity largely came to an end, and there followed a period of relatively low levels of illegal activity related to contraband tobacco.
However, the illicit tobacco market in Canada has rebounded in recent years, rising rapidly since 2004 to become an acute problem once again. Today, the illicit manufacturing, distribution, and selling of contraband tobacco products is different from that of the 1980s and 1990s. Now illegal activity in Canada is primarily connected not to the diversion of legally manufactured products but to illegal manufacture, although it also includes to a lesser degree the illegal importation of counterfeit cigarettes and other forms of illicit tobacco from abroad.
Organized crime plays a central role in the contraband tobacco trade in Canada, and that means that this illegal activity is linked with other kinds of crime. Most of the organized crime groups across the country involved in the illicit tobacco market are also active in other forms of criminality. What we have in Canada is a situation where illegal contraband tobacco products are sold to children in schoolyards, because they are less expensive. It is a way of getting young people hooked on nicotine and tobacco, which is obviously very injurious to their health and contrary to Canada's long-standing commitment to reduce smoking in our society.
They also allow those people who sell cigarettes individually or in small quantities to students to get them onto other drugs as well. The organized crime groups such as the Hell's Angels and other motorcycle gangs will provide them with tobacco now, and then maybe in a few months' time, will slip in a marijuana cigarette, and then maybe sell them some more of that and perhaps other drugs too. The profits from contraband tobacco fuel all that other criminal activity. That is one of the reasons we need to be vigilant and we need to pass this bill to crack down on the trade in contraband tobacco.
The problem is further complicated by the international aspects of the illicit tobacco trade. For example, some of the illegal manufacturers that supply the Canadian market are on the U.S. side of the Akwesasne Mohawk territory, which spans the borders between Quebec, Ontario, and New York State. The contraband tobacco market is driven largely by illegal operations in both Canada and the United States. The provinces of Ontario and Quebec have the highest concentration of contraband tobacco manufacturing operations, the majority of the high-volume smuggling points, and the largest number of consumers of contraband tobacco.
There are approximately 50 contraband manufacturers operating on first nations territories in Kahnawake, Quebec, and the Six Nations reserve in Ontario. As I mentioned earlier, there are also manufacturers on the American side of the Akwesasne Mohawk territory, which is uniquely located at the confluence of borders between Ontario, Quebec, and New York State, giving rise to jurisdictional and legal challenges between federal, provincial, and state laws.
Organized crime networks are exploiting First Nations communities and taking advantage of the jurisdictional and politically sensitive relationships between those communities, governments and enforcement agencies.
The 2012 National Threat Assessment on Organized and Serious Crime prepared by the Criminal Intelligence Service of Canada has identified 58 organized crime groups that are involved in the contraband tobacco trade throughout Canada, 35 of which are currently operating in Central Canada. These criminal networks re-invest profits from the manufacture and distribution of contraband tobacco in other forms of criminality, including the trafficking illicit drugs, firearms and human smuggling. Furthermore, the RCMP reports that violence and intimidation tactics continue to be associated with the contraband tobacco trade.
It is clear that the illicit tobacco market is dominated by criminal organizations motivated by the lure of significant profits and relatively low risks. 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, confiscating conveyances such as trucks and boats, and seizing the proceeds of crime. These actions have the dual goal of disrupting the illicit flow of tobacco and weakening the organized crime groups involved in the production, distribution, smuggling, and trafficking of contraband tobacco.
Contraband tobacco is a serious threat to our communities if left unchecked, and organized crime will continue to profit at the expense of the health and safety of Canadians and government tax revenues.
Recent intelligence indicates a rise in counterfeit tobacco products entering the Canadian market as well as the diversion of some raw leaf tobacco grown in southwestern Ontario to illegal manufacturers in and around first nation territories in Ontario and Quebec. These illegal products are then transported through nation-wide networks for sale to consumers as a cheaper alternative to legitimate tobacco products, thereby making them more accessible to youth.
The Government of Canada recognizes that contraband tobacco smuggling has become a serious problem in the last several years. Certainly, Canadians want to be protected from offenders involved in these contraband tobacco smuggling operations, which threaten their safety and that of their families as well as the health of our youth. They also want to be protected from organized crime associated with contraband tobacco activities...
Protecting society from criminals is a responsibility this government takes seriously. Accordingly, this bill is part of the government's continued commitment to take steps to protect Canadians and 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...
This bill, in my view, achieves that.
Françoise Boivin NDP Gatineau, QC
Mr. Speaker, I would like to thank the Parliamentary Secretary to the Minister of Justice for his speech on Bill C-10. The Standing Committee on Justice and Human Rights worked extremely hard on this file. I enjoyed working with my colleague on it. Contraband tobacco is not a straightforward topic.
However, I am wondering about something. The opposition we heard in committee came from first nations chiefs who are concerned because they were not consulted about this, despite the fact that they are often the ones who are most affected by tobacco smuggling. It sometimes happens on their land.
According to clause 4 of the bill, the legislation will come into force on a date to be fixed by order in council, so I am wondering if the parliamentary secretary knows if his government intends to use the time it has before the bill's implementation to have those extremely important conversations with first nations in the areas that are plagued by tobacco smuggling. It is unfortunate that it would be happening after the fact, when it should have happened beforehand.
Bob Dechert Conservative Mississauga—Erindale, ON
Mr. Speaker, I appreciate the NDP justice critic's question. I do appreciate her hard work on the justice committee, and I enjoy working with her on that committee.
The member will remember that when we were at committee, there were a number of representatives of native communities from across Canada, especially those straddling the borders between Ontario, Quebec, and New York.
They told us about the illegal activity that is brought into their communities by organized crime groups that are largely not first nations-related groups. They take advantage of the people living there. They drag them down this road into illegal activity with the promise of easy money.
We were told by one chief that his Mohawk community had a very proud tradition of working in the construction industry, in high steel, in places like New York City and other places around the United States. Unfortunately, the lure of this easy money from smuggling illicit tobacco products across the St. Lawrence River was dragging his people away from that legitimate proud tradition and bringing them into areas of criminality.
We listened very closely to what the leaders had to say. This bill has been crafted largely in consideration of their views. We will always take the opportunity to listen to first nations communities about how this bill should be implemented.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, contraband cigarettes are indeed a serious problem in many different regions in Canada. In fact, in certain areas it does fuel a significant amount of organized crime because of the amount of revenue that can be generated.
The negative impacts of that organized crime are fairly profound and have a serious impact on many communities throughout Canada.
My question is for the minister. Has the department done any sort of any analysis, or can it provide us with any information in terms of the degree to which contraband cigarettes are on the market in different regions of the country? Does the minister have that type of information? If so, I would personally be quite interested in receiving it. If he could make it available, that would be greatly appreciated.
Bob Dechert Conservative Mississauga—Erindale, ON
Mr. Speaker, that information was largely supplied at the justice and human rights committee during their study of this bill. It comes from various sources, the government as well as other NGO organizations.
I am sure the member has heard similar stories in his constituency. In my constituency, in Mississauga, there is a secondary school called Erindale Secondary School. There was an analysis done of the tobacco butts lying around the school yard and just off the school property where young people smoke. It was found that a significant percentage, more than 30% of those cigarette butts, came from illegal contraband tobacco.
That indicates that across Canada there is a problem with very cheap cigarettes being sold to young people in very small quantities that they can afford, maybe four or five cigarettes at a time. It gets them started down that road, which is a very serious health risk to young Canadians across Canada.
Dave MacKenzie Conservative Oxford, ON
Mr. Speaker, coming from Oxford, which is one of the five counties where tobacco is grown in southwestern Ontario, we know we have a problem.
The legitimate industry is looking for serious help from all levels of government to try to work with this issue. Being a former parliamentary secretary to the minister of public safety and dealing with the aboriginal community, I know many of them are concerned about the guns, drugs, and gangs that are involved in this.
As the Parliamentary Secretary to the Minister of Justice knows, they use the young people in the aboriginal communities as a shield.
This legislation will be welcome. I am wondering if the parliamentary secretary could elaborate a little on where the penalties will go. We see illicit growing of tobacco. Recently there have been large seizures of leaf. Certainly that is the beginning of the process.
I am wondering whether the parliamentary secretary has some information for us.
