Good morning, Mr. Chair.
Good morning, everybody.
I am Gary Grant, and I'm the national spokesperson for the National Coalition Against Contraband Tobacco, the NCACT.
I'm a thirty-nine-year veteran of the Toronto Police Service, and I'm also the founder and chair of Toronto Crime Stoppers. My involvement with Crime Stoppers also means that I'm one of the coalition's members.
The NCACT is a non-profit, non-partisan organization that works to make the public more aware of the problem of illegal cigarettes and contraband tobacco. The coalition is made up of 16 organizations from across Canada representing industry, business, and law enforcement. Beyond Toronto Crime Stoppers, these organizations include retail organizations such as the Canadian Convenience Stores Association and the Retail Council of Canada, chambers of commerce at the federal and provincial levels, and the Customs and Immigration Union. A full list is available on our website at www.stopcontrabandtobacco.ca.
I became involved in the coalition because the growing accessibility of illegal cigarettes is a serious problem in all communities across Canada, big and small. Whether it's along the St. Lawrence River, in southwestern Ontario, the rural areas of northern New Brunswick or the Gaspé, illegal cigarettes are flowing freely from the hands of criminals directly into the hands of Canadians.
In fact, it may surprise some members of the committee where we have seen busts in recent months. In Charlottetown in January of this year, police seized more than 100,000 contraband cigarettes. In February, a Moncton man was arrested near Edmunston, New Brunswick, with 200,000 illegal cigarettes and pills believed to be methamphetamines. In October two men from Magog, Quebec, were fined more than $100,000 for smuggling tens of thousands of illegal cigarettes, and in western Canada, particularly Alberta and Manitoba, millions of cigarettes have been seized in raids over the past several years.
Just a few weeks ago Quebec newspaperLa Presse highlighted the involvement of Hells Angels in the illegal cigarette trade in Montreal. It outlines the elaborate criminal distribution network these gangsters use to move, distribute, and sell cigarettes in Quebec. It also makes clear how the Hells Angels were being supplied by an illegal cigarette factory. The Hells Angels still have a major presence in Canada. This was reinforced through police raids in Gatineau last week, and they are being funded in part by illegal cigarettes. I brought copies of this La Presse article in English and French for members of the committee.
I think it's worthwhile to outline what we mean when we refer to contraband. It's any tobacco product that has not followed proper government regulations or properly paid federal and provincial tobacco taxes. Illegal cigarettes are often sold in transparent plastic baggies where 200 cigarettes can cost less than $15. These are smuggled through criminal distribution networks across the country. They are all sold via hundreds of smoke shacks that are located near major Canadian cities. These smoke shacks have become more elaborate in recent years demonstrating just how profitable they are. However the product they sell still does not pay both federal and provincial taxes so it's still contraband tobacco.
Why should we be concerned about contraband tobacco? Well, as I've already suggested, it is a cash cow for organized crime. The RCMP has estimated there are about 175 criminal gangs that use the trade in illegal cigarettes to finance their other activities including guns, drugs, and human smuggling. We cannot tolerate some of the worst elements of Canadian society being allowed to effortlessly profit from this criminal activity.
Contraband tobacco is also a prime source for youth smoking. Criminals who sell illegal cigarettes don't care how old their customers are, and they certainly don't check for ID. Given the ridiculously cheap price of contraband cigarettes, these are readily accessible to our teenagers. Remember, a baggy of 200 illegal cigarettes can cost less than the price of a movie ticket.
Tobacco smuggling also has a negative impact on good government. It makes a mockery of tobacco control efforts. If bags of cigarettes can be bought from dealers on street corners easily, all of our efforts to restrict youth access are undermined. Similarly, governments in Canada lose an estimated $2.1 billion a year in tax revenue as a result of tobacco smuggling. That's a lot of money that could be better spent in the government treasuries such as on roads, police, and health. It's money that belongs to the Canadian taxpayers.
The National Coalition was very happy to see this legislation reintroduced as quickly as it was. It is an important step in the fight against contraband tobacco, and a reminder that this issue remains a significant and growing problem in Canada.
There are still 50 illegal cigarette factories operating in this country. There are more than 300 smoke shacks. In Ontario some are even now operating off reserve. Meanwhile, organized crime benefits from the proceeds of contraband tobacco. Government tobacco control regulations, especially those focused on youth, are undermined.
The bill shows that the government is listening to the appeals of the public, law enforcement, the provinces, and retailers with regard to illegal cigarettes. The government's announcement earlier this year that a special task force of 50 RCMP officers will be deployed to deal with tobacco smuggling is most welcome. But more remains to be done; government action can't stop here. Remember, contraband arrests represent only the tip of the iceberg of the larger problem. The RCMP estimates that they capture as little as 5% of the total trade.
There are a number of things that the government can do.
Contraband tobacco is an issue that reaches across political and jurisdictional boundaries. The organized crime groups that benefit from contraband cigarettes operate without any regard for political, departmental, or territorial boundaries. We should work together. Smugglers do not stop at provincial borders. They benefit every time the different levels of government fail to work together to stop tobacco smuggling. All levels of government will also need to remain diligent and continue to monitor and act on this problem. With so much money involved, criminals are bound to innovate and we must be ready to respond.
To conclude, the NCACT is very pleased to see that the government is taking this issue seriously. We are confident that this legislation will make a difference.
Thank you for your time.