Mr. Speaker, I am pleased to participate in the second reading debate on Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco). The bill proposes amendments to the Criminal Code to create a new offence of trafficking in contraband tobacco and to provide minimum penalties for imprisonment for persons who are convicted for a second or subsequent time of this offence.
To help reduce the problem of trafficking in contraband tobacco, the government committed to establish mandatory jail time for repeat offenders of trafficking in contraband tobacco in its 2011 election platform. The bill would fulfill that commitment.
There are no offences in the Criminal Code dealing with contraband tobacco at the present time. While there exists an offence of selling contraband tobacco in the Excise Act, 2001, that offence exists in support of our fiscal policy in the area of tobacco. This government believes that something more is required to deal with the problem that has become trafficking in contraband tobacco.
The proposed bill prohibits the sale, offer for sale, transportation, delivery, distribution or possession for the purpose of sale of tobacco product or raw leaf tobacco that is not packaged, unless it is stamped. The terms “tobacco product”, “raw leaf product”, “packaged” and “stamped” have the same meaning as in section 2 of the Excise Act, 2001.
The penalty for a first offence is up to six months imprisonment on summary conviction and up to five years imprisonment if prosecuted on indictment. Repeat offenders convicted of this new offence and where 10,000 cigarettes or more, or 10 kilograms or more of any tobacco product, or 10 kilograms or more of raw leaf tobacco is involved would be sentenced to a minimum of 90 days on a second conviction, a minimum of 180 days on a third conviction and a minimum of two years less a day on subsequent convictions.
In order to place this bill in context, it is important to describe the serious problem that has become the trafficking in contraband tobacco.
As members will recall, the contraband tobacco market first became a significant issue in Canada in the late 1980s and early 1990s. During that period, more and more legally manufactured Canadian cigarettes destined for the duty-free market began making their way back into the Canadian underground economy. The high retail price of legitimate cigarettes made smuggling them back across the border a lucrative illicit business.
The Royal Canadian Mounted Police and Canada Customs seized record quantities of contraband tobacco. The RCMP was also engaged in investigating this illegal activity at its source. These investigations eventually led to negotiated settlements involving several tobacco companies paying more than $1.5 billion in criminal fines and civil restitution.
However, the illicit tobacco market in Canada has rebounded in recent years and once again has become an acute problem.
Tobacco is not just a Canadian problem. The illicit trafficking of tobacco is a multi-billion dollar business worldwide today, fuelling organized crime and corruption and spurring addiction to a deadly product.
Last year smuggling experts, customs officials and diplomats of nearly 160 countries, including Canada, gathered in Geneva, Switzerland to finalize the development of what had eluded governments for decades, and that was an international instrument allowing for a global crackdown on the black market in tobacco.
Under the auspices of the World Health Organization Framework Convention on Tobacco Control, a global treaty to curb tobacco use, delegates worked to complete protocol to stop cigarette smuggling.
Illicit tobacco feeds an underground economy that supports many of the most violent actors on the world stage. Organized crime syndicates and terrorist groups facilitate global distribution and use the profits to finance their activities.
Perhaps even more troubling is the impact that smuggling has on the public health crisis caused by tobacco. Worldwide, one out of 10 adults dies prematurely from tobacco-related diseases such as lung cancer, emphysema, cardiovascular disease and stroke. If the trend continues to hold, tobacco will kill about 500 million people.
By 2030, that figure will reach eight million deaths a year and with cigarettes being heavily marketed in poor countries, 80% of those deaths will be in the developing world. Over the 21st century, an estimated one billion people could die from tobacco use.
In Canada today, illegal tobacco activity is primarily connected to illegal manufacture and not to the diversion of legally manufactured products as it was in the past. I should point out also that it includes, to a lesser degree, the illegal importation of counterfeit cigarettes and other forms of illicit tobacco from overseas.
Organized crime plays a central role in the contraband tobacco trade in Canada and that means this illegal activity is linked with other kinds of crime. Most of the organized crime groups across the country involved in the illicit tobacco market are also active in other forms of criminality.
The problem is further complicated by the international aspect of the illicit tobacco trade. Transnational crime of the type found in contraband tobacco smuggling is considered a threat to public safety and national security and has a direct impact on individual Canadians, small businesses and the economy. It also has implications for relationships with our international partners, especially the United States.
On this issue, I would like to point out that Canada and the United States share a long history of law enforcement co-operation across the border. Recent and ongoing threat assessments have identified that organized crime is the most prevalent threat encountered at the shared border. This includes significant levels of contraband trafficking, ranging from illicit drugs and tobacco to firearms, notably handguns, and human smuggling. In this regard, Canada and the United States have explored the concept of integrated cross-border maritime law enforcement operations. Joint maritime law enforcement vessels, manned by specially trained and designated Canadian and U.S. law enforcement officers, have been authorized to enforce the law on both sides of the international boundary line in the course of integrated cross-border operations.
The contraband tobacco market is driven largely by illegal operations in both Canada and the United States. The provinces of Ontario and Quebec have the highest concentration of contraband tobacco manufacturing operations, the majority of the high-volume smuggling points and the largest number of consumers of contraband tobacco.
The 2012 Criminal Intelligence Service Canada National Threat Assessment on Organized and Serious Crime in Canada identified 58 organized crime groups that were involved in the contraband tobacco trade throughout Canada, 35 of which were currently operating in central Canada. These criminals networks reinvest profits from the manufacture and distribution of contraband tobacco into other forms of criminality, including trafficking of illicit drugs, firearms and human smuggling.
Furthermore, the RCMP reports that violence and intimidation tactics continue to be associated with the contraband tobacco trade. Since 2008 and up to May 2012, the RCMP has laid approximately 4,925 charges under the Excise Act, 2001, and disrupted approximately 66 organized crime groups involved in the contraband tobacco trade throughout Canada. During that time period, approximately 3.5 million cartons, unmarked bags of cigarettes, were seized nationally by the RCMP, along with numerous vehicles, vessels and properties.
It is clear that the illicit tobacco trade is dominated by criminal organizations motivated by the lure of significant profits and relatively low risks. Enforcement actions are therefore directed at increasing the risks associated with contraband tobacco activities: dismantling illegal manufacturing facilities; disrupting distribution supply lines; apprehending key figures; confiscating conveyances such as trucks and boats; and seizing the proceeds of crime. These actions have the dual goal of disrupting the illicit flow of tobacco and weakening the organized crime groups involved in the production, distribution, smuggling and trafficking of contraband tobacco.
Contraband tobacco remains a serious threat to our communities and if left unchecked, organized crime will continue to profit at the expense of the health and safety of Canadians. Overall, the proposals in Bill S-16 represent a tailored approach to the imposition of mandatory minimum penalties for serious contraband tobacco activities. The bill proposes minimum penalties only in cases where there are certain aggravating factors present, such as a conviction for a second or subsequent time.
The Government of Canada recognizes that contraband tobacco smuggling is a serious problem. Canadians want to be protected from offenders involved in these contraband tobacco smuggling operations, which threaten their safety and that of their families. They also want to be protected from the violence that is associated with contraband tobacco activities.
Protecting society from criminals is a responsibility the government takes seriously. Accordingly, this bill is part of the government's continued commitment to take steps to protect Canadians and make our streets and communities safer. Canadians want a justice system that has clear and strong law that denounces and punishes serious crimes, including illicit activities involving contraband tobacco. They want laws that impose penalties that adequately reflect the serious nature of these crimes. This bill would do that.