Public Safety Committee on May 7th, 2008

[The Vice-Chair, Liberal, Roy Cullen]

Thank you, Ms. Priddy.

We've come to the end of the four rounds. We have the witnesses until, I believe, 5:30 p.m. and there are bells at 5:15 p.m.

I have a question for Chief Superintendent Cabana. You talked about how some of the contraband tobacco is coming from offshore, but that some of it is being manufactured in Canada, the bulk of it on reserve. We understand the sensitivity about enforcing laws on reserve. There are, I gather, first nations police forces and there's a lot of coordination between those police forces, provincial police forces--as and when they apply--and the RCMP.

How realistic is it to say--and have you done it to date--that if you become aware that someone is operating illegally on reserve, you'd actually take enforcement action on reserve, working with other law enforcement agencies or whatever you have to do?

[C/Supt Mike Cabana]

It's actually quite realistic. Again, going back to my earlier comment about the impact this phenomenon is having on the native communities, there's a willingness by these communities to collaborate and participate in some of our enforcement efforts.

I can't speak specifically to the day-to-day type of activities that we have with aboriginal police services, but I can confirm that we're actually very proud of the cooperation that we have and the relationship that we have established with many of the aboriginal law enforcement services. An example would be a partnership that we have with the Akwesasne Mohawk Police Service, which participates full-time in our joint investigative teams, which are comprised of Canadian and American enforcement partners, targeting serious crimes within their territory.

Now, understanding the sensitivities that the tobacco trade has in some of those communities--again, I go back to my earlier comment--we do not target the communities themselves; we target the criminal organizations that have, for a lack of a better term, infiltrated those communities, and in that scope the aboriginal police services are more than happy to collaborate.

[The Vice-Chair, Liberal, Roy Cullen]

Sir, you mentioned that there'd be impacts in the communities--and communities reacting somewhat negatively--but would it also be true that there'd be a large number of vested interests? There is economic activity, there are jobs, there are profits, there is cash, so wouldn't there be competing interests within these aboriginal communities?

[C/Supt Mike Cabana]

Very much so. Absolutely, there are competing interests, but as I said, there's a realization that the collateral activities are probably more costly than whatever economic activity is generated within the community.

[The Vice-Chair, Liberal, Roy Cullen]

I have one final question and then we'll all go.

The Canadians who are smoking these contraband cigarettes.... My understanding is that Canadians like a Virginia-type tobacco product, so that you don't see many Canadians rushing down to the United States to buy Philip Morris or Kools or anything. Maybe some of the snowbirds do, but even the snowbirds--we made provisions in the legislation some time ago to allow, I think, 1.5% of production to accommodate the snowbirds--generally like Virginia tobacco.

So the cigarettes that are being manufactured on reserve--or the tobacco products that are coming in from offshore--are they dealing with a tobacco that Canadians enjoy? Or are they just making anything and putting it into the market, and the market is there; people are buying it?

[C/Supt Mike Cabana]

As I mentioned earlier, it's price driven. The market is there. Some of the organizations might put a focus on trying to please the customers, but the reality is that the discrepancy in prices is driving the market.

[The Vice-Chair, Liberal, Roy Cullen]

Okay.

Ms. Brown.

[Bonnie Brown, Liberal, Oakville, ON]

I have one question.

There's a period in your chart showing the apprehensions going way, way down, and then they started to go up again. Is that tied to the lowering of the tax that we did in the nineties?

[C/Supt Mike Cabana]

If you look at the chart contained in the book, yes, it clearly.... If you look at the taxation levels over the years, you can actually follow the curve. Taxation is clearly one issue, but I would suggest it's not the only issue.

[Bonnie Brown, Liberal, Oakville, ON]

Well, it looks to me, from this chart, that it is a very serious issue, because the apprehension numbers were up here, and then suddenly they went down here. And now they have started to go up again at the very moment the taxes have gone up again.

So I think the only policy question for us, this being a price-driven commodity, is whether we want to reduce the illegal activity around it and reduce the appeal to the marketplace of these cheap prices by lowering the federal tax again.

It worked the last time, Mr. Chair.

[The Vice-Chair, Liberal, Roy Cullen]

Well, I can tell you on good authority that when the government increased those taxes during our mandate, there was a very real recognition that it would create more opportunities and more risk for contraband.

[Bonnie Brown, Liberal, Oakville, ON]

Exactly.

[The Vice-Chair, Liberal, Roy Cullen]

The idea or objective, I guess, was to try to deal with the hazards of smoking and other matters. But I'm sure all of this will be discussed by the committee.

I'd like to thank all the witnesses for coming today. Thank you for your very informed presentations.

The meeting is adjourned.