Mr. Speaker, I am very pleased to be here tonight to speak to Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco).
This important legislation would fulfill our 2011 platform commitment to address trafficking in contraband tobacco by creating mandatory minimum terms of imprisonment for repeat offenders and establishing a new dedicated RCMP anti-contraband force of 50 officers.
This commitment was not made in a vacuum. The illicit trafficking of tobacco is a multi-billion dollar business that fuels organized crime and corruption and leads to addiction to what is widely accepted to be a deadly product. The illegal commerce in tobacco is so profitable that tobacco is well on its way to becoming the world's most widely smuggled legal substance.
If passed, Bill S-16 would equip the RCMP and our courts to deal more effectively with the scourge represented by the proliferation of these illicit tobacco products in Canadian society. These products, many of which are counterfeit or manufactured in unregulated and illegal facilities, often contain impurities and contaminants that add to the dangers already posed by smoking.
These illicit tobacco products are being sold in great quantities to teenagers and younger Canadians at a time when we as a society are strongly discouraging smoking due to the long-term and serious health risks it poses. The sale of illicit tobacco continues to represent a source of danger to the health of Canadians. This alone argues for strong measures of the type proposed in Bill S-16.
Importantly, the illegal nature of the production and distribution of contraband tobacco products means that they also escape Canadian taxes. This is one reason why they can be sold at discount prices. Clearly, this undermines the capacity of our tax system at the very time that the Government of Canada is working hard to balance our books in a responsible and effective way.
Before I get into the details of Bill S-16, I propose to give members a brief background on how the current law operates, why it needs to be changed and what the bill would do.
At the outset, I would observe that there are at present no provisions in the Criminal Code dealing directly with trafficking in contraband tobacco. Instead of being prosecuted under the criminal law, contraband tobacco is dealt with under the Excise Act. Although it contains prohibitions and penalties, the primary focus of this legislation is on revenue-related issues.
The range of tobacco-related activities the Excise Act prohibits includes the possession and sale of tobacco products not properly stamped. This means tobacco products for which the appropriate taxes and duties under subsection 32(1) have not been paid.
Contravention of this provision is punishable by fine. The size of the fine depends on the amount of tobacco involved. A jail term may also be imposed and may be up to a maximum of five years on indictment or 18 months on summary conviction.
While there have been successful prosecutions and seizures of illicit tobacco products and the vehicles used to transport them, it is indisputable that the problem persists and that it continues to grow despite the best efforts of law enforcement. In short, the strong measures proposed in this bill are necessary due to the serious nature of the challenges posed by trafficking in contraband tobacco.
Allow me to remind members that the current challenges are different from those of 25 years ago when the problem first gained national prominence in Canada. At that time, the issue was the criminal diversion of legally produced and exported Canadian tobacco products back into Canada at discounted prices.
Although the problem abated temporarily, it has returned over the past 10 years in the renewed form of the illegal manufacture of tobacco products and the illegal importation of foreign tobacco products.
There are many sources of illegal tobacco products on the Canadian market now: counterfeit cigarettes imported from overseas; cigarettes produced legally in Canada, the United States or abroad and sold tax-free in Canada, which is a recurrence of the issue we faced 25 years ago; and fine-cut tobacco imported illegally, mostly from the United States.
Most of the illegal activity involved in trafficking contraband tobacco in Canada occurs in Ontario and Quebec, and involves various organized crime groups that have established distribution networks that use violence, intimidation and bribery. They also use the income generated from contraband tobacco production and distribution to fund other criminal activities and to establish links with other criminal organizations. Clearly, strong measures are required.
This brings me back to the details of Bill S-16, also known as the tackling contraband tobacco act. What does this important bill propose?
First, it would create a true criminal offence by amending the Criminal Code to include a provision to deal with activities ranging from the sale, offer for sale, possession for the purpose of sale, transportation, distribution and delivery of contraband tobacco.
Second, it would set out a series of escalating penalties to send the message that this form of illicit trade will be dealt with sternly. The maximum penalty for a first offence would be up to six months of imprisonment on summary conviction and up to five years of imprisonment if prosecuted on indictment. However, repeat offenders convicted on indictment of this new offence would be sentenced to a mandatory minimum jail term of 90 days on a second conviction, a mandatory minimum jail term of 180 days on third conviction, and a mandatory minimum jail term of two years less a day on subsequent convictions.
The triggering quantity of contraband tobacco for this new offence and these new penalties would be an amount equal to or greater than 50 cartons or 10,000 cigarettes, or an equivalent amount of other unstamped tobacco products. This threshold has been chosen on the basis of the experience of the RCMP in dealing with tobacco smuggling.
Generally, only the provinces prosecute Criminal Code offences. However, in order to allow federal prosecutors to prosecute this new offence, a concurrent jurisdiction clause is proposed to be added to the Criminal Code. This is true criminal law. It is strong medicine for a serious national disorder. The primary target of this new offence and penalty scheme is organized crime groups and their associates who are involved in the large volume trafficking of contraband tobacco. In short, this important bill proposes a strengthened anti-contraband enforcement strategy that includes real jail time for repeat offenders in order to address the growing contraband tobacco market in Canada. These measures are timely and would be an effective way of dealing with this illicit and dangerous commerce.
In closing, I thank members for their attention and urge them to support this bill in the interest of the health and safety of Canadians.
