A national coalition to encourage the public to report incidents of trafficking contraband tobacco products was formally launched on October 29th by a group of 18 of the nation’s largest retailer associations and tobacco companies, much to the chagrin of tobacco-producing First Nation groups. The National Coalition Against Contraband Tobacco (NCACT) is a Canadian advocacy group concerned about the dangers of contraband tobacco and criminal activity. NCACT is composed of groups such as the Canadian Convenience Stores Association, the Canadian Tobacco Manufacturers Council, the National Convenience Stores Distributors Association, the Retail Council of Canada, and the Canadian Chamber of Commerce.
The initiative comes as police are set to get new powers of arrest under Bill C-10, an omnibus crime bill that passed third reading in the Senate in mid-October and is set to become law. The controversial bill will make trafficking in contraband tobacco a criminal offense, a move heavily criticized by First Nations.
The Six Nations Council of the Grand River says that Bill C-10 is a direct attack on their economy. They argue that the Native tax-free tobacco trade has been well established for over 30 years, and their producer, the Haudenosaunee Trade Collective (HTC), reports that Six Nations territory has over 2,000 jobs linked directly or indirectly to the tobacco industry that could be at risk. The HTC says that some smoke shops have already shut down in fear of the bill’s implications.
Jacqueline Bradley, executive director of NCACT, said contraband tobacco makes money for organized crime and gangs and is part of the same trafficking network that moves drugs and guns. Bradley claims there are at least 50 illegal manufacturing plants and some 300 illegal smoke shops on reserves in Canada. “As soon as it leaves the reserve, it’s contraband,” said Bradley in an interview with the Hamilton Spectator.
The NCACT says that contraband tobacco is a serious problem that is getting worse each day. They are cheap, easily bought, and lack any government inspection, control, or taxation. They say that it greatly contributes to young people’s addiction to cigarettes because cheap prices, easy access, and no age checks means that youth are having no trouble getting tobacco through the contraband market. From 2007-2009, the Canadian Convenience Stores Association conducted a major study into the proliferation of contraband tobacco at high schools in Ontario and Quebec. After surveying hundreds of sites, the study found that nearly one-third of the cigarettes found at Ontario high schools and 40% at Quebec high schools were contraband.
In late September, the NCACT called on the government of Ontario to finally take the contraband problem seriously, in light of new information about the trade of illegal cigarettes in the province that confirms 42% of cigarettes purchased in the province in July were contraband. “We’ve long known that Ontario has the worst contraband tobacco problem in Canada, but now we know just how extreme the challenge is,” said Gary Grant, a 39-year veteran of the Toronto Police Service and national spokesman for the NCACT. “This challenge is created by low price and easy availability of illegal cigarettes, with a baggie of 200 cigarettes costing as little as $8.”
Organized crime groups are using the trade in contraband tobacco to finance other more serious criminal activities. As of 2011, the RCMP has identified over 175 organized crime groups involved in the trafficking of contraband cigarettes. The NCACT also says that contraband cigarettes are killing small businesses and threatening the livelihoods of thousands of convenience store owners. These contraband cigarettes, which are being smuggled throughout Canada in record numbers, now represent one out of every three cigarettes sold. This means that legitimate retailers are losing tens of thousands of dollars in sales each year, but its not just First Nations cigarettes. The NCACT says most of these contraband cigarettes are being illegally imported from places like China or illegally sold—tens of thousands of cartons each day. This all happens with no government inspection, testing, oversight or taxation. CTV’s investigative news program W5, reported in 2011 that contraband tobacco is robbing the federal government of as much as $2 billion in taxes each year.
On September 22nd, Six Nations Chief Ava Hill made a presentation about the impact of Bill C-10 on the community of the Six Nations of the Grand River. Chief Hill said the bill will have a devastating effect on their economy and the local non-Aboriginal economies like Branford and Hagersville and criminalizes an inherent right to a traditional trade activity. Hill said the bill is not about crime but about lost tax revenues. “This connection to crime is a red herring and part of a fear mongering strategy used by this government to scare legislators into passing this bill,” said Hill. Hill said Six Nations acknowledges that there may be a criminal element in many sectors of business and society, but they do not support or condone any connection with criminal activity relating to the tobacco industry. Hill added that federal scare tactics that claim First Nations cigarettes contain dangerous or unhealthy additives. She said many manufacturers grow their own tobacco to be used in the final product. As such, there is more quality control, and First Nations cigarettes are often a more pure product than those produced by multibillion dollar manufacturers.
In her presentation, Hill asked the government to withdraw its bill or make First Nations exempt from the law. She also asked the government to refer it to the Supreme Court of Canada as a violation of section 35 of the Constitution, the Canadian Human Rights Act and the duty to consult. Hill said this is a jurisdictional issue, as the Six Nations have pre-confederation treaties with the Crown that are recognized and protected by Canada’s Constitution of 1982 and now form part of the rule of law in Canada. She said she will be talking to other Iroquois First Nations, the HDC, and other allies to work on a strategy to fight the implementation of the bill. Hill commented in an interview with the Branford Expositor, “We’re not just going to accept it. We’re looking at options to fight this.” The bill has yet to receive royal assent that will create minimum sentences for various crimes relating to the sale of contraband tobacco.