Public Safety Committee on April 27th, 2010

[Maria Mourani, Bloc, Ahuntsic, QC]

Fine.

All the surveys show that people are not aware of this; they think contraband is normal.

[Barry MacKillop]

Thank you for your question, but I would like to make a clarification. It isn't the Minister of Public Security who made the announcement; it was the Minister of National Revenue at the time, Jean-Pierre Blackburn.

In terms of the details about the money for the cases you cited, I will let my colleague Pierre Bertrand reply to that.

In terms of the $20 million, that was money from...

[Maria Mourani, Bloc, Ahuntsic, QC]

The $100 million?

[Barry MacKillop]

...from the $100 million allocated to fighting contraband.

For the rest, I will let Pierre reply.

[Pierre Bertrand, Director General, Excise and GST/HST Ruling Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency]

Good afternoon, Ms. Mourani.

When we started negotiating an agreement with RBH and Imperial Tobacco Canada Ltd., one of the terms was that neither the companies nor the government would identify the amounts of money that were then paid under the agreements as money that was to be specifically allocated to fighting contraband.

The negotiations provided for the money to be divided among the provinces, first. Second, it was put into the government's consolidated fund so the government could decide what it would be spent on.

[The Chair, Conservative, Garry Breitkreuz]

Thank you very much.

Mr. Davies, please.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman, and thanks to the witnesses for coming here today.

I'm reading from the executive summary of your report. It says:

In May of 2008, the Minister of Public Safety launched the RCMP’s Contraband Tobacco Enforcement Strategy, which set out eight priorities for its objective of reducing the availability of, and decreasing the demand for, contraband tobacco nationwide....

I don't know who wants to answer this. Would anybody here tell me if they think that objective has been met?

[C/Supt Joe Oliver]

The strategy is a multi-year strategy, and I think it would be premature for us to estimate whether or not we've met that objective. I think we're having an impact, but I would say that we have not achieved that outcome at this point. We're hoping to track the data, to monitor our enforcement actions, to monitor our demand reduction efforts to see whether or not we're having an impact.

[Don Davies, NDP, Vancouver Kingsway, BC]

Let me break that down. Would you say, two years later, approaching May 2010, that the availability of contraband tobacco is down or up?

[C/Supt Joe Oliver]

I don't have any precise information on it, but I think we're still at around the same level.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay, and would you say that you've decreased the demand for contraband tobacco in those two years? Not you, but has it been decreased, would you say?

[C/Supt Joe Oliver]

Well, I wouldn't say that the RCMP strategy alone.... The sense I'm getting, based on what I've heard from my colleagues, is that there may be a shift in the market; that if there's no greater number of smokers but there are increased sales, then it would appear that the market is changing.

[Don Davies, NDP, Vancouver Kingsway, BC]

Again, in reading your report, I'm a little unclear about this. You say, “Overall, these efforts have achieved significant success in disrupting illegal tobacco-related activity.” But I read at page 2, in the second paragraph, and when I listened to your remarks today you said, that “the availability of contraband is at a historical high”. I'm wondering how we square those things. If you're achieving significant success in disrupting that activity, how is it that we have the availability of contraband at a historical high?

[C/Supt Joe Oliver]

Well, compared with the early 1990s, I think it is the highest level we've seen of contraband, and our seizure rates are at record levels as well. In the 1990s, at the time when it was seen to be epidemic—and that was at the time—I think we seized around 450,000 cartons of cigarettes.

[Don Davies, NDP, Vancouver Kingsway, BC]

I understand the numbers. I'm just wondering how we square those two things. If contraband is at a historical high, I don't know how we can get success out of that situation.

[C/Supt Joe Oliver]

I think the fact that we've disrupted 25 organized crime groups is a bit of an achievement.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay.

I'm quoting from former minister, Stockwell Day, who said in May 2008, “...we're going to get very serious about the manufacture, distribution, and the sale of these cigarettes.”

We've heard your own figures that you estimate approximately 50 factories manufacture illegal cigarettes. How many of those illegal factories have been shut down in the past two years?

[C/Supt Joe Oliver]

None. We've attacked the organized crime groups, as I mentioned.

[Don Davies, NDP, Vancouver Kingsway, BC]

None have been?

[C/Supt Joe Oliver]

None.

[Don Davies, NDP, Vancouver Kingsway, BC]

Does the government have a plan that you can share with us that would make some sense of Minister Day's statement that “we're going to get very serious about the manufacture” by these factories? Is there anything in the works to deal with those factories?

[C/Supt Joe Oliver]

As I mentioned, the RCMP is targeting organized crime groups that are involved in the manufacturing of tobacco products. We continue to do that. We continue to partner with aboriginal communities in trying to eliminate organized crime in those communities.

I can turn to my colleague at Public Safety to talk about the work that is under way in terms of the task force.

[Don Davies, NDP, Vancouver Kingsway, BC]

Okay. Do you know where any of these factories are?

[C/Supt Joe Oliver]

Do you mean precisely where they are?

[Don Davies, NDP, Vancouver Kingsway, BC]

Precisely or any other way, do you know where they are?