Mr. Speaker, I wish at some time we might have an easy issue to debate in Parliament but this certainly is not one. What is the problem we are addressing? It is a major health problem and there is no question about that.
I for one would be most happy if the federal and provincial governments never got one penny more in taxation from cigarettes. Many Canadians feel the way I do. The reality is however that there are people who smoke and will continue to do so. As a result that habit has created a problem. Looking at this rationally and reasonably we have to deal with that health issue and this legislation is attempting to do that.
The problem is not only a health issue, it is an enforcement issue. An underground economy, an illegal business or trade, is being carried out in this country in monumental proportions. There is absolutely no question when looking at the facts. In Quebec over the last four years this contraband trade has gone from 9 per cent to 60 per cent. In Ontario it has risen from 13 per cent to 35 per cent. In the Atlantic provinces it has risen from 12 per cent to 40 per cent. Just last year in the west it increased from 9 per cent to 15 per cent, which is a 60 per cent increase.
There is an illegal trade going on which is very damaging to the country. It is also providing megadollars to those people who carry out many other illegal illicit trades.
When we hear about millions of dollars being made overnight in illegal tobacco and the expansion of this across the country, I do not think there is anyone in Canada who does not want to see very strong measures brought against that trade to stop it from continuing. Therefore there are certain steps to be taken which everybody in the House can agree to.
There are other problems involved in dealing with this trade. Number one is enforcement. How on earth do we stop this illegal trade and at what costs do we carry out that enforcement?
This problem is certainly mixed up with many things. I have received letter after letter from the cancer society, the medical associations and different groups concerned about the health of Canadians. They are very concerned that the excise tax has been removed from cigarettes.
Let us look at what taxation has been put in place and the reason for it. The federal government in looking at the problem has thought the only way to stop the illegal trade in cigarettes is to cut the profits of those organizations carrying out this activity. The only way to cut the profits is to bring enforcement upon them so strongly they can no longer function and to take away their profit base.
The cutting of taxes takes away the profit base of the contraband trade. Looking at the ability for them to function, when we remove from a carton of cigarettes $10 of provincial tax and $10 of federal tax taking the gross sale from $43 down to $23, we reduce their profits substantially.
It is true that the Canadian government does not take in as much revenue. However as this contraband trade has been increasing the federal revenues have been declining dramatically. When we talk about the percentage of losses in Quebec and Ontario and other provinces, those are all losses in tax dollars.
In reducing the excise tax on cigarettes we are reducing the profits of those people who sell illegal cigarettes.
When looking at the health problem we have to realize there are implications for all of our communities. Smoking cigarettes causes health problems in old and young people alike. Certainly the government has moved to correct some of that problem.
Looking at the health problem in general stopping young people from smoking is a major goal of this government. In order to prevent young people from smoking, a regulation has been brought in increasing the age for purchasing cigarettes up to 18 years. That makes it impossible for young people to buy cigarettes legally.
Members might say in some cases they can get cigarettes anyway. I would submit if contraband cigarettes are easily available, kids 11, 12, 13 and up will buy illegal cigarettes very easily. The resultant factor is as long as we allow the illegal trade to flourish and continue, more availability will be made for young people to purchase those cigarettes.
Therefore continuing along the same line as in the past would be counterproductive to health. There is no question it would diminish our ability to control the commodity and therefore allow more and more young people to get cigarettes at a very low price and to purchase them at any age they wish. The two major attacks on health would be gone.
The minister has also taken other steps to make certain there are more controls which brings me to the enforcement level. The RCMP has been given the power to work in larger numbers along with Revenue Canada customs officers. They will work against organized crime groups trying to stop the major suppliers of these cigarettes at any point. They will better patrol the borders by making certain there is 24-hour surveillance at many border crossings where there is only short-time surveillance now.
There are steps to very carefully check the sale of cigarettes across the counter within our communities in order to make it more difficult for traffickers at the street level.
There is no question that it has to be a strong policing action with the RCMP as well as strong policing action with Customs Canada to create better enforcement. At the same time the bill is trying to open up that enforcement to provincial scope as well.
Provincial officers in the province of Ontario and in Quebec will be able to work hand in hand with the RCMP and customs officers to try to curb this growing illegal industry. I might remind people in this House as well that the profits of that illegal trade do go into organized crimes. There have been very strong suggestions that groups from Montreal and Toronto such as Mafia organizations and Hell's Angels bicycle groups have all been involved with the illegal trade of cigarettes.
When it is stated that 95 per cent of the profits of illegal cigarettes goes into organized crime and works against Canadian society, we must take every measure we can to stop that from occurring.
There is absolutely no question when we look at the health problem and solutions to the health problem, they are not easy but the plan that has been put forth by the government is very logical. It is not easy to suggest that we reduce taxes and look as if we are caving in to organized crime.
At the same time it is taking the profits away from organized crime and creating an environment where their sales will not destroy more and more of the normal trade and therefore allow organized crime to totally control cigarette sales in this country.
It is important to realize too that there has been a manufacturers' tax placed on exported cigarettes to control the flow of cigarettes out of this country which are being recycled back into the country. The extra $8 on export tax will cost anybody who is trying to buy those and bring them back into the country more money to operate that illegal trade.
As we look at the whole picture, the government has tried to take into account health measures, enforcement measures and tax measures in order to resolve a problem, hopefully bringing us to a more prosperous future.