Ottawa, ON – A new report reveals a disturbing trend: illegal tobacco sales are surpassing legal sales in several Canadian provinces, fueling organized crime and depriving governments of vital tax revenue.
The study, conducted by EY Canada for the Convenience Industry Council of Canada (CICC), paints a stark picture of the contraband tobacco market’s grip on the nation. Using sales data from 2019 to 2023, the report estimates that illegal tobacco now accounts for a staggering percentage of total tobacco sales in several provinces:
- Alberta: 29%
- Nova Scotia: 38%
- Manitoba: 45%
- New Brunswick: 52%
This means that in these provinces, at least one in four cigarettes sold is illegal, unregulated, and likely linked to organized crime. Only Quebec, with its proactive measures to combat the illicit market, has managed to keep the illegal share below 20%.
The Cost to Canadians
The financial implications are significant. In 2023 alone, the five provinces mentioned above lost a combined $316 million in tax revenue due to illegal tobacco sales. This lost revenue could have funded essential public services such as healthcare and education.
“The illegal tobacco industry isn’t a victimless crime,” says Anne Kothawala, President and CEO of CICC. “Contraband costs us all and is taking money out of the pockets of law-abiding Canadians.”
Beyond the financial impact, the illegal tobacco trade has strong ties to other criminal activities. RCMP Insp. Etienne Thauvette warns that profits from contraband tobacco often fund drug trafficking, human trafficking, and firearms smuggling.
CICC Calls for Action
To combat this growing crisis, CICC recommends:
- Increased resources and funding for law enforcement: To effectively disrupt illegal tobacco networks.
- Stronger penalties for offenders: To deter individuals from participating in the illicit trade.
- Enhanced federal-provincial coordination: To improve enforcement efforts across jurisdictions.
- Crackdown on online sales: To disrupt the growing online market for illegal tobacco, particularly among young people.
The report serves as a wake-up call, highlighting the urgent need for a comprehensive strategy to address the illegal tobacco epidemic in Canada. Failure to act will not only perpetuate financial losses but also endanger public safety and community well-being.
