Illegal Smoke Shop Bait For Recognition

By Lloyd Dolha

A small southwestern Manitoba First Nation has opened an illegal smoke shop and unlicensed blackjack gambling lounge in hopes of generating much needed revenue and sparking a legal battle with the province and Ottawa over its treaty status. The Canupawakpa First Nation opened the Dakota Chundee Smoke Shop on November 9th, selling Mohawk cigarettes, with plans for a casino-style poker lounge with video lottery terminals operating outside provincial tobacco and gambling tax laws and regulations. “This is the reason we are practising our sovereignty,” said Chief Frank Brown of the Canupawakpa First Nation. “To generate some kind of revenue to sustain the health of our people, to [deal with] housing problems we have, the poverty, the education problems, the contaminated water we live with.”

The Canupawakpa First Nation made a deal with Rainbow Tobacco, a Kahnawake, Quebec tobacco company already fighting tax authorities in three other provinces. The smoke shop is selling Wolfpack and Deerfield cigarettes for $5 per pack or $40 per carton to the general public—less than half the price of a legal carton in Manitoba. The off-reserve tobacco shop sold out its supply of cheap cigarettes on the first day and had to close and wait for another shipment the following week. Brown said the First Nation will levy their own taxes on the cigarette and casino operations to generate revenue for the cash-poor community of about 600. Brown said the Canupawakpa First Nation is in a rare position in Manitoba. The First Nation has a treaty with the British, but no official treaty status with the federal government and are considered refugees within Canada. The reserve’s funding hasn’t changed since 1980, though its population has doubled since then. The Canupawakpa has filed a claim against the federal government, but nothing has come of it. That’s the reason for forcing the issue through illegal activity. Brown said a charge would allow them to argue their case in court with the goal of some kind of legal recognition of their treaty status.

Following the successful opening of the illegal smoke shop near Pipestone, Manitoba, the Canadian and Western Convenience Stores Associations called on Manitoba Premier Greg Selinger to “enforce current laws and avoid setting a dangerous precedent in the province in the sale of contraband tobacco.” In November, the associations warned that the opening of the first illegal smoke shop selling contraband cigarettes will open up the floodgates for dozens of other illegal shops, leading to increasing smoking among minors, lost revenue for the province, and the closure of local convenience stores as happened in Ontario and Quebec. “We are certainly sympathetic to Native rights, but not at the mercy of hardworking and law-abiding convenience store owners who follow strict tobacco regulations and remit taxes but simply cannot compete with the illegal trade of contraband tobacco,” said Doug Hartl, vice-chair of the WCSA.

According to the RCMP, close to 300 illegal smoke shacks currently operate in Quebec and Ontario selling tobacco products produced in some 50 illegal manufacturing plants. All these plants have operated illegally for the past decade without interference from the provincial governments. Since 2008, hundreds of convenience store owners in those provinces who have been in business for years have either shut down or continue to struggle to survive because governments are not enforcing current laws. “It’s absurd that we must beg governments to enforce their own laws, but sadly, that’s how little attention is given today to the issue of contraband tobacco,” added Michel Gadbois, vice president of the CCSA.

On November 15th, Manitoba government officials confiscated more than 89,000 cigarettes from the First Nation-run smoke shop. Manitoba Finance said its special investigations unit, along with the RCMP, seized the contraband cigarettes. The cigarettes seized are federally stamped under the Excise Act 2001 but are not marked or stamped for sale in Manitoba. The investigation is continuing and charges are pending. Chief Brown immediately pledged to restock the store’s shelves as soon as possible.

Rainbow Tobacco cigarettes have been seized in Alberta, British Columbia, and Saskatchewan. Craig Blacksmith, who helped open the shop, said he and other operators are hoping to be arrested when they reopen the shop. “We want to get arrested, actually, so we could prove our point in court,” Blacksmith told CBC News. “We were ready to do that. We’re going to fight for our people until things get settled.