The Ontario Convenience Store Association has delivered 20,000 postcards signed by voters to Ontario Premier Kathleen Wynne urging her not increase taxes on tobacco. An increased tax on cigarettes would hurt convenience stores, but would be a boon to the so called “contraband” tobacco market that already flourishes in many First Nations communities.
The Association believes the Ontario Liberals are “seriously considering” increasing the tax on tobacco products in the provincial budget, which will be revealed on May 1st. This would follow a similar increase to federal tobacco taxes announced in February’s federal budget.
“A tobacco tax at this very crucial time will only drive this problem even bigger and further into the underground economy,” says David Bryans the CEO of the Ontario Convenience store association. “I think there is a reluctance to face the aboriginal issues” says Bryans, “We see an awful lot of non-taxed aboriginal production facilities that the Ontario government has continued to ignore for years.” He advocates giving municipal police and the OPP seizure powers and the power to keep the proceeds of crime, as well as stronger penalties for those involved in the delivery of contraband.
Trafficking in contraband tobacco is currently a tax offence but Steven Harper’s federal Conservatives are currently trying to pass Bill C-10, an act that addresses some measure Bryans is calling for. It would make trafficking in “contraband” tobacco a Criminal Code offence allowing local law enforcement and the OPP to make arrests. The law also includes mandatory minimum sentences for repeat offenders.
The Ontario Convenience Store Association is an affiliate of the Canadian Convenience Store Association, which is in turn a member of the National Coalition Against Contraband Tobacco, a group that has vigorously lobbied the federal government to pass Bill C-10. The coalition also includes an association representing the three major corporate tobacco manufactures, chambers of commerce, taxpayer groups, and crime stoppers.
Bryans is skeptical that government is committed to actually stopping the contraband Tobacco trade. “[They] may never enforce it, [They] don’t want to get off side with the aboriginals.”
Bryans believes an increased provincial tax on cigarettes would lead many of 7,500 convenience stores his association represents to go out of business. He claims cigarettes account for 50% to 75% of sales of a family owned convenience store that doesn’t sell gasoline.
According to a press release, a study by the convenience store association found “illegal tobacco rates as high as 46.6% at certain locations across the province. The provincial average of illegal tobacco usage throughout Ontario was 21%.”
In addition to signing 20,000 postcards to Premier Kathleen, the Ontario Convenience Store Association has launched a website, created YouTube videos, hired a PR firm, and met with leaders of both the provincial government and the opposition parties.