Evidence of meeting #12 for Public Safety and National Security in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was illegal.
A recording is available from Parliament.
5 p.m.
Director, Non-Smokers' Rights Association
That is your next question. We are talking about...
5 p.m.
Director, Non-Smokers' Rights Association
Not entirely. In terms of loose tobacco, he said it was effectively impossible and they hoped there would be controls. Even the government of Quebec, in its Tobacco Tax Act, has controls on the delivery of loose tobacco. We do not necessarily share its opinion on other raw materials, because there...
5:05 p.m.
Director, Non-Smokers' Rights Association
Yes, I'll be very quick.
There are harmonized customs tariffs for cigarette paper and filters. There are about five cigarette filter manufacturers in the world. It would be possible to control that market. We don't know why they don't want to do it. They say it is used for a lot of other products, but we don't believe that.
5:05 p.m.
Conservative
5:05 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Thank you, Mr. Chairman.
I'm going to quote the same thing the Public Safety minister and this government said in May 2008:
...we're going to get very serious about the manufacturer, distribution, and the sale of these cigarettes.
This was meaning contraband cigarettes.
I have a question to all of you. Are any of you happy with the progress that's been made on the contraband tobacco issues in the last two years?
5:05 p.m.
President, Canadian Convenience Stores Association, National Coalition Against Contraband Tobacco
I'll try first.
Not at all. We've seen this grow from 15% to, now, up to 48%, and it continues. There's no plan to correct contraband in this country. I think this committee is the first chance we've ever had an opportunity to talk about it, and we implore you to work with us to try to correct it.
5:05 p.m.
Senior Policy Analyst, Canadian Cancer Society
We do have good news. Contraband has gone down compared to what it was 12 months ago. I think changing the border post location is key in that. Certain enforcement strategies have complemented that.
But with respect to illegal manufacturing, we have not made the progress. There are more factories than before, and we really do need to target the source.
5:05 p.m.
Director, Non-Smokers' Rights Association
I just have another piece of information.
Of course, we're concerned for the public health side of the issue, because we're seeing a levelling off of smoking prevalence across the country. We made great strides in lowering tobacco consumption in this country for many years, and now we're hitting a plateau, which is why we have to take care of this issue so that we can get back into a downward trend.
5:05 p.m.
First Vice-President, Customs and Immigration Union, National Coalition Against Contraband Tobacco
Yes. Thank you very much.
I can tell you that I agree with my colleagues here that the Cornwall thing did slow down the contraband to a certain extent, but believe me, it's a very lucrative business, and you can be sure that they will adjust their strategy accordingly. They're sold out in the street. You've heard numbers from Quebec and Ontario, where they went into certain schools, and they've been identifying that around 50% of cigarettes that are out there in the field are still contraband. So are we effective?
5:05 p.m.
First Vice-President, Customs and Immigration Union, National Coalition Against Contraband Tobacco
We are not really.
5:05 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Okay, thanks.
I also want to explore something that I think differed among the testimony and materials of some of the witnesses, which is the relationship between price and contraband tobacco. In fact, quoting from the Canadian Convenience Stores Association submission, at page 2, you say that, “The problem has been escalating since 2006 partly”, you say, “as a result of increased taxation”. Yet I am told and have read material that makes it very clear to me that there's a clear connection between the price of cigarettes and rates of smoking and uptake; namely, the higher the price, the lower the smoking rates.
Is anybody here suggesting that we should be lowering the price of cigarettes, tax for cigarettes, in order to deal with contraband?
5:05 p.m.
President, Canadian Convenience Stores Association, National Coalition Against Contraband Tobacco
I think when you look at the whole tax...tobacco taxes have the consumer looking for alternate products, and we've seen that. We're not here to advocate a tax rollback or a tax reduction. It is part of any longer-term solution. The government, in the nineties, decided on their own to roll back taxes. We didn't, as retailers, come forward. It is one of the solutions, but it is not the only solution. There are many we should sit down and talk about and decide where to go.
5:05 p.m.
Senior Policy Analyst, Canadian Cancer Society
A tobacco tax rollback would be a public health disaster and governments would have a reduction in revenue. Instead of some people having cheap cigarettes, everyone would have cheap cigarettes.
5:05 p.m.
Director, Non-Smokers' Rights Association
Just to give you an example, in Quebec, when we had the tax rollback, smoking prevalence amongst teenagers went from 19% in 1991 to 38% in 1996, which was a disaster in terms of public health. The federal government, when they lowered taxes in the first year alone, in 1994-95, lost a billion dollars, even though the contraband was there. So that, for us, is a non-option, which was the focus of my presentation.
I think you're on the right track. There are other things that need to be done, but you're on the right track. Internationally, that's also recognized. You have to go ahead with the policies and shut down the illicit manufacturer.
5:05 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I have to declare my bias. I agree with Mr. Cunningham. I think any attempt to lower the price of cigarettes in any way, tax or otherwise, is a public health disaster.
This question is for the Canadian Convenience Stores Association. In your own material you say, at page 4, that contraband cigarettes are priced cheaply, often selling for a dollar a pack. If that's the case, then how, possibly, is lowering the price of cigarettes, unless you're going to get down to a dollar a pack, ever going to stop that type of approach, as opposed to simply keeping taxes and the price high and instead going at it from an enforcement point of view?
5:10 p.m.
President, Canadian Convenience Stores Association, National Coalition Against Contraband Tobacco
I agree with you. We're not here to advocate a tax rollback. I think the gap, compared to the nineties, is much bigger than we've ever seen. All we have to face is the reason the consumer is changing. It's no different on July 1 in Ontario. More consumers will be looking for alternate sources of cheap cigarettes because of a new tax. We have to sit down. If that's not the answer and that isn't the solution, I'm advocating that there have to be many ways of moving forward with all of our colleagues at the table here.
5:10 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Okay, good. I think I have that clear.
Any of you, give us some advice. What's the number one thing you would like to see the government do? If we leave this meeting and there's one action item, what would each of you suggest we should do to deal with this problem?
