Thank you, Mr. Chair and members of the committee. My name is Satinder Chera, and I am the president of the Canadian Convenience Stores Association.
Our association is proud to represent 27,000 small business owners across Canada who serve 10 million customers each and every day. As you will note from the materials in your kits, our channel provides employment opportunities for over 234,000 Canadians and collects over $22 billion in taxes for all levels of government. Our stores ensure that Canadians have access to necessities and basic groceries wherever they live, and a third of them serve rural and remote regions of the country. In our vast country it is our distributors who provide this critical link of getting those necessities to our stores, which is why I am joined by Anne Kothawala, who represents that part of our industry.
Our industry is much more than our contribution to the economy. We support local sports teams and charities. Last year we held our first ever national Convenience Store Day, during which politicians and community leaders worked a shift in our stores and helped us to raise over $80,000 for charity. Our channel is constantly changing and adapting. You can buy food-service items like samosas and healthier snack options such as energy bars. Twenty years ago newspapers were a significant part of our sales; today they are not.
Tobacco sales have also declined, just as the number of Canadians who smoke has declined. This is a good thing; however, those sales have moved to the illegal market. Across Ontario, one in every three cigarettes sold is illegal, and it's as high as 60% in some markets throughout the province. Please find more information regarding contraband in your kits.
Just so we are very clear, we're not here to defend the tobacco industry. After all, tobacco is a cause of serious diseases. That said, so long as Canadians choose to smoke this legal product, our retailers continue to represent the most responsible avenue for them to buy tobacco products. We are the most responsible safeguard to keep tobacco products out of the hands of children. It is in this context that we work with the tobacco companies, along with confectionery, snack, and beverage manufacturers, who are all non-voting members of our association.
My colleague and I are both parents. As any parent, we don't want our kids, or any kids, to get their hands on tobacco products. In fact, retailers play an important role in keeping these products out of the hands of youth to begin with through display bans and with identification checks through our We Expect ID program that is included in your kits. Convenience retailers are part of the solution to preventing kids from smoking, not in opposition to it.
We are here today to raise the concerns of our members about the impact that the proposed plain-packaging legislation will have on our stores. We fear that despite the intent of the legislation, efforts to reduce tobacco consumption will be wasted and, ultimately, worsened by this bill. We will also talk about the vaping side of Bill S-5, where we fully support the government's finally stepping in to regulate this promising development for consumer choice.
Our channel has proven to be the best at age testing when measured against the Beer Store or the government-owned LCBO in Ontario. According to data from Smoke-Free Ontario, public health units have conducted over 20,000 underage mystery shops, with a pass rate of 96% by convenience stores in Ontario.
Committee members may be asking why, if 75% of the package is already covered by warning labels, it would matter if the remaining 25% were covered too? There are three reasons.
First, as with any product, branded packaging gives consumers assurances of quality and reliability and helps them distinguish one product from another. Standardizing cigarette packaging will make it much more difficult to differentiate legal from non-legal products. Moreover, Bill S-5 allows for the standardization of the cigarettes themselves. Forcing legal products to look like their already-standardized illegal counterparts will only further encourage consumers to make their purchasing decisions on price alone. The cheapest products will always come from the black market, free from any tax or ID check.
Second, we already compete with an illicit market that is double the global average. With plain packaging, we can expect to see counterfeiting become a bigger problem than it already is.
Third, because of the black market, law-abiding convenience stores lose not only the tobacco sales, but also the purchases that go along with them—milk, bread, lottery tickets. Governments lose tax revenue, and no one is there to prevent children from buying illegal tobacco.
We know that committee members have heard a lot about the black market and contraband lately, having just studied Bill C-45. Many witnesses have remarked on the importance of addressing the black market when it comes to cannabis, and several have pointed to branding to visually separate these products and provide consumers basic information about them as well as a quality guarantee.
Our members cannot understand why, when the government is trying to curb black market cannabis, it chooses to proceed with plain packaging for tobacco, which will be a boon to the already thriving black market. If the shared problem between tobacco and cannabis is the black market, why are we treating these products so differently?
This is compounded by stories from retailers in other countries where they have adopted plain packaging. Our Australian retail counterparts have struggled with inventory control, staff training, and customer transactions without any of the intended benefits. Contraband rates increased by 20% in that country after plain packaging was introduced. More recently, the Australian and French governments have both stated that plain packaging did not have the desired impact on smoking rates. As you can imagine, our retailers and distributors hear these stories and are naturally questioning whether we should expect to see any different outcome for plain packaging if implemented here in Canada.
I'll now turn it over to my colleague to conclude our remarks.
