Thank you very much, Mr. Chairman and members of the Committee, for giving us this opportunity to present our views on this important health and public safety issue.
My name is François Damphousse. I am Director of the Quebec office of the Non-Smokers Rights Association.
I have two basic messages for you today. First, it is important to reiterate that taxation is the most effective means of reducing tobacco use. That is why we are asking you today to do whatever you can to protect that public health policy.
Second, it is untrue that high taxes on tobacco products automatically result in contraband. The problem is much more closely linked to a lack of effective measures to control illicit sources of tobacco. To illustrate that point, I would like to refer to events that occurred in the early 1990s. Tobacco smuggling did not continue in the western provinces and Newfoundland and Labrador, despite the fact that they had not followed the lead of the federal government and other provinces, which drastically lowered their tobacco taxes in February of 19994.
We now know that the problem was due, to a much greater extent, to the fact that the three main tobacco manufacturers in Canada were, at the time, freely and deliberately supplying the contraband market, and that they simply stopped doing that once taxes went down in 1994.
In our view, it was a lack of action to control manufacturers' activities that caused an explosion of controls and activity, which has had serious negative impacts in terms of public health and government revenues. I am not exaggerating when I say that it took many years of sustained effort on the part of the federal government and the health community to recover from that crisis.
The current situation is no different now, other than the fact that, as mentioned last week by the RCMP, contraband cigarettes are no longer being produced by the major tobacco manufacturers; rather, the source is illegal manufacturing operations located in a number of different Indian reserves.
Once again, we are seeing that contraband products are more readily available in Quebec and Ontario, compared to other provinces, which have much higher levels of taxation. If the problem has continued to expand in the last six years, it is because more effort was focused on intercepting contraband cigarette runners, rather than on the real source of the problem.
Without appropriate action on your part, the contraband problem will continue to compromise much of the work that has been carried out—both yours and ours—to reduce smoking in Canada.
It is also important to point out that the effects of the contraband market are even more serious in Aboriginal communities, where smoking rates are already two or three times higher than in the rest of Canada. For several years now, we have been asking for a comprehensive package of measures to be developed to control the problem.
To talk about what that could include, I would now like to turn it over to my colleague, Rob Cunningham.