Evidence of meeting #30 for Public Safety and National Security in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cigarettes.
A recording is available from Parliament.
Conservative
The Chair Conservative Garry Breitkreuz
No one from the Liberal side has indicated that they have more questions.
Ms. Priddy.
NDP
Penny Priddy NDP Surrey North, BC
There was an article in a national paper this morning about taxes that first nations could place on tobacco, and proceeds of crime that could be put to good use. I wonder if that was anything you'd heard about or wanted to comment on. Did you see the article?
Senior Policy Analyst, Canadian Cancer Society, Canadian Coalition for Action on Tobacco
Yes, I saw it. It's an innovative idea. When a police authority, including an aboriginal police authority, participates in a seizure and there's a fine or there are proceeds of crime that arise from a prosecution, where does that money go? This is an issue that's often raised by different police forces.
If there's an opportunity to put some of these fines or proceeds back into supporting further aboriginal policing, I think that's something to be considered.
Director, Quebec Office of the Non-Smokers' Rights Association, Canadian Coalition for Action on Tobacco
In the international protocol that's being negotiated by the World Health Organization, they're looking seriously at adopting a measure dealing with the proceeds of crime.
Bloc
Serge Ménard Bloc Marc-Aurèle-Fortin, QC
Witnesses have expressed views that differ from your own, it would seem. However, I would like you to provide a further clarification. I questioned them about the usefulness of electronic marking, and they basically said that it was effective in cases involving counterfeit cigarettes, but that those cases only represent 3 per cent of the illegal market. I am wondering whether you share that opinion.
I would also like to talk about vehicle seizure. I checked this in the legislation. It seems that vehicles can be seized, even in cases involving people who bought cigarettes and are transporting them illegally. However, my impression is that once the vehicle has been seized, the owner can regain possession by putting up a bond. So, the seized vehicle is really nothing more than a security deposit. However, I noted that in the United States, vehicle seizures for all kinds of different offences are an effective punishment.
Do you think that, if we were to seize vehicles systematically and publicize the information, there would be fewer people buying cigarettes on the reserves?
Director, Quebec Office of the Non-Smokers' Rights Association, Canadian Coalition for Action on Tobacco
In terms of electronic marking, I would just like to give you an example. Counterfeiting is a problem that has been observed primarily in the western provinces. However, this carton was manufactured on the Six Nations Reserve by GRE, which has a federal and provincial licence. Although it is subject to the federal excise tax, this product ended up on the contraband market. The provincial tax on this product has not been paid. A system of electronic marking would provide a means of tracing the product, by going back up the chain and determining who supplied the individual and who acted illegally. It would make it possible to carry out investigations. That is currently an important source of the difficulties being experienced in Ontario. No mention was made of that in Monday's testimony. In any case, such a system would help to resolve part of the problem.
At the same time, we would have to be in a position to force manufacturers on the reserves to use the electronic marking system, so that authorities could trace all of their products. Even if we managed to resolve the current problem, how can we be sure that another kind of problem will not present itself later on? Imperial Tobacco is no longer manufacturing cigarettes in Canada; it moved all its manufacturing plants to Mexico and has kept only its head office in Montreal. What guarantee do we have that products coming out of Mexico will not end up on the contraband market through other channels? With a tracing system, we could ensure that this would not happen. While it would not solve all of our problems, it would solve a good many of them. I can assure you that federal and provincial police authorities would be very happy to see such a system implemented.
Senior Policy Analyst, Canadian Cancer Society, Canadian Coalition for Action on Tobacco
In answer to your question about vehicle seizure, we have no specific recommendation to make in that regard, but Mr. Gadbois may want to comment on this from his perspective. I believe the content of provincial laws varies when it comes to tobacco, but I do know that issue has already been raised.
Executive Vice-President, Canadian Convenience Stores Association
To be perfectly honest, I have no expertise in that area. Do you mean that anyone buying cigarettes in one of the shacks on the reserves would automatically be liable to having his vehicle seized on the highway?
Executive Vice-President, Canadian Convenience Stores Association
Well, that would be great, and we believe that would be perfectly normal and justified; however, there are a heck of a lot of smokers out there who are going to hate you. The problem is not with them, but with the people making the cigarettes. That would be my initial reaction.
Bloc
Executive Vice-President, Canadian Convenience Stores Association
They will just have the merchandise delivered to their home.
Bloc
Executive Vice-President, Canadian Convenience Stores Association
All that will do is eliminate some of the small resellers. The distribution network is very well developed. At the level it is at now, it operates inside apartment buildings—indeed, quite openly. Whatever system we decide to use, if people know that being in possession of an illegal product could end up costing them a lot of money, that will certainly help. In terms of whether it's preferable to reduce demand or reduce supply, there is really a problem at both ends. I don't know which method would really work best, so why not use both of them.
Director, Quebec Office of the Non-Smokers' Rights Association, Canadian Coalition for Action on Tobacco
I would like to refer to comments made by the RCMP in front of the Standing Committee on Health two years ago, as well as I can recall them. It had been suggested that measures be taken particularly with respect to smokers who buy illegal cigarettes. The RCMP pointed out at the time that, because of resource issues, it would be impossible to catch all the people buying these cigarettes. Catching one person would certainly have a deterrent effect, but then we would simply be moving the problem somewhere else. The real problem is not the smoker, but the people manufacturing these illegal cigarettes.
As Mr. Norlock pointed out earlier, these people are dealing with an addiction. That is why we would like to see strategies that focus on the source of the problem, and not the individual.
Conservative
Conservative
Peter Goldring Conservative Edmonton East, AB
Thank you, Mr. Chairman.
On the distribution angle, reading through the material here--and that's why I kind of alluded to it with your association and 31,000 stores--it takes an awfully large distribution to be able to distribute the amount of product being made. Rather than looking at the distribution or the retailing of it, I have a question on it. If this were happening in any other part of Canada, where the manufacturing was done in Canada, it would be shut down in a heartbeat. The real problem seems to be tracking the product, the tobacco, into the U.S. territory and back again as a finished product. So the problem really seems to be the porous border.
If you have a porous border, how much emphasis is being put on the United States cleaning up the border, or is there anything we can do on a reserve that has a border down the middle of it? Is the real difficulty here the geography of the situation? You really have an identifiable, or uncontainable, porous border down the middle of the reserve. Is that what's being taken advantage of?
Director, Quebec Office of the Non-Smokers' Rights Association, Canadian Coalition for Action on Tobacco
There have been some examples where the RCMP has shut down some illicit manufacturing. For example, in Quebec they cracked down on that right away. They were not just cells of illegal tobacco; it was manufacturing.
I think the Akwesasne situation is very regrettable. It's not being condoned. A lot of people on the reserves are really against what's going on. There's organized crime taking advantage on both sides, because it's being distributed out of there through Canada. It's very unfortunate that this situation is going on, which is why a plan to deal with this issue has to be thought through.
We should also look at the people who are providing the raw materials to those reserves. GRE made that comment. They said you have to take a look at the people who are providing it. They're as guilty as those who manufacture on the reserves. We shut down the manufacturing in Quebec--I think it was near Repentigny or Sorel. Why can't we address this issue by shutting down the people who are providing these products? We would be addressing it outside the reserve.
Conservative
Peter Goldring Conservative Edmonton East, AB
But the secondary or maybe primary crime is smuggling illegal items back across Canada's border.
Director, Quebec Office of the Non-Smokers' Rights Association, Canadian Coalition for Action on Tobacco
But you have to cut off that source before it comes over the reserve into Canada.
Conservative
Peter Goldring Conservative Edmonton East, AB
That's not necessarily so, because you're having difficulty identifying where the tobacco is coming from--foreign tobacco, Ontario tobacco, or American tobacco. The paper products can come from anywhere around the world. The real common denominator is the illegal product--the cigarettes coming back across that border, and what can be done at that border to stop it.
Senior Policy Analyst, Canadian Cancer Society, Canadian Coalition for Action on Tobacco
It's urgent that the Canadian government, with the United States government, diplomatically find a solution and insist that this is a problem for both our countries and we have to find an end to it.
Conservative
Peter Goldring Conservative Edmonton East, AB
We have to get into it with all these other things. It's an illegal product crossing the border into Canada.