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EDITORIAL: Tax revenue up in smoke with contraband tobacco sales
The proliferation of contraband tobacco in Canada is nothing new, but it’s often an overlooked crime in the public realm.
It’s no surprise to smokers, but tax revenue on legally purchased cigarettes has been steadily rising for the past few decades with an average pack now costing $10.
Advocates like the B.C. chapter of the Canadian Cancer Society say the increased cost is a win-win, as it boosts government revenue while incentivizing more people to quit the destructive habit because of prohibitive cost.
Kathryn Seely, the non-profit organization’s chief advocate for healthy public policies, told the Vancouver Sun in 2013 that higher prices can be particularly effective in quashing youth smoking.
“The youth who are price sensitive — it can cause them to not take up the habit,” Seely said.
Yet it appears more people are finding alternative ways to satisfy their nicotine habit by avoiding government gatekeeping altogether.
An analysis of hundreds of cigarette butts at five sites in Victoria and Saanich found up to 25 per cent were contraband, or illegal products. Finding a thrifty supplier seems to be the easy part, according to Andrew Klukas, president of the Western Convenience Stores Association, who conducted the analysis.
Klukas also pointed out 22 per cent of cigarette butts collected at Vic High were classified as contraband, which suggests teens are finding ways to avoid expensive legal cigarettes in favour of illegal products as well. A baggie of 200 cigarettes can sometimes cost only $10, Klukas said.
Klukas and his colleagues have a vested interest in locals purchasing cigarettes from their retailers, but the research suggests the B.C. government may be losing $120 million a year in tax revenue to illegal tobacco dealings.
That’s money going into the pockets of organized crime from elsewhere in the country and as far away as Asia, and it needs renewed focus from both federal and provincial governments.
This editorial appeared in the July 16 edition of Saanich News, and the July 18 edition of Victoria News.