Canada
According to a recent KPMG study, Ontario is second only to Panama when it comes to selling illegal tobacco in the Americas. The KPMG report found that 31% of tobacco sold in Ontario is illegal, putting the province on par with El Salvador. In Panama, 60% of tobacco sales are illegal. The report also says 12% of illegal tobacco products sold in Mexico now come from Canada. Imperial Tobacco says the Canadian government loses $2 billion a year in unpaid tobacco taxes.
Caroline Ferland, vice-president of corporate and regulatory affairs for Imperial Tobacco Canada commented: “The sale of illegal cigarettes in Ontario has not only continued to infiltrate communities across the country, but the criminals who produce these illegal products have expanded into new markets throughout the Americas.”
The police say the illegal trade has been linked to human trafficking and drug and arms trading, and that illegal cigarettes are often sold to minors.
Most illegal tobacco is from First Nation reserves, many of which have opposed legislative attempts to crack down on the trade. They argue smoke shops provide employment on reserves, where work is often hard to find.
What’s more, they say trading tobacco is within their rights because they were using it long before the commercial manufacturing of cigarettes.
Canadian and provincial laws reflect this, to a degree. Ontario’s Tobacco Tax Act gives First Nations the right to sell cigarettes, allocated from government-approved wholesale providers, tax-free on reserves, but they can only be sold to First Nations people for personal use.