Every Little Bit Helps

Group finds $2.4 billion in new economic stimulus funds for Finance Minister Flaherty
March 9, 2009 –

Toronto – While Finance Minister Flaherty looks for quicker ways to get stimulus dollars flowing into the economy, a group has located an extra $2.4 billion the government could use for roads, bridges and to get people back to work. The National Coalition Against Contraband Tobacco (www.stopcontraband.ca) is reminding the government that an estimated $2.4 billion in tax dollars is being lost each year to the trade in illegal cigarettes.
“In the economic climate we’re in, every dollar in stimulus can make a difference,” said Dave Bryans of National Coalition Against Contraband Tobacco (NCACT). “Imagine the good that could be done across Canada if the government were only collecting the taxes that are due on tobacco sales. We could be helping laid-off workers out through more retraining programs, more infrastructure needs could be met and provinces could get more help with growing health care costs. Now’s the time to shut off the illegal market in cigarettes and get these lost billions to work on good projects.”
In late 2008, Ontario’s auditor, Jim McCarter, revealed in his annual report of provincial finances that Ontario was losing at least $500 million yearly in provincial taxes because of illegal cigarettes and called upon provincial officials to do a better job of collecting tobacco taxes. McCarter noted that problems persist with smuggling and sales of illegal cigarettes, and the government should crack down and better control purchases of tax-free cigarettes and cigars on First Nations reserves and smuggled cigarettes off reserve.
Recent studies have shown that Canada-wide over one-third of all cigarettes smoked are illegal with no government testing, regulation and no age-restrictions on their sale. In Ontario, illegal cigarettes have captured almost 50% of the market. A study by the Canadian Convenience Stores Association also showed that contraband has taken root in schoolyards at high schools throughout Ontario and Quebec. A study where over 22,000 cigarette butts were collected from 155 schools in those provinces showed that 26% of those in Ontario and 32% of those in Quebec were contraband.
Contraband is also dealing a knock-out blow to convenience stores, particularly in Ontario. Ontario Convenience Stores Association (OCSA) data show that in the 7 months from May 31, 2008 until January 31, 2009, 765 convenience stores, or about 10% of the industry in Ontario, have permanently shut their doors. Another 1,246 families (14% of Ontario store owners) have exited the industry and sold their stores.

About NCACT
The National Coalition Against Contraband Tobacco is a new Canadian advocacy group formed with the participation of businesses, organizations and individuals concerned about the growing danger of contraband cigarettes. NCACT members share the goals of working together to educate people and urge government to take quick action to stop this growing threat. The founding members of the NCACT include: Canadian Convenience Stores Association (CCSA), Retail Council of Canada, National Convenience Stores Distributors Association (NACDA), Canadian Chamber of Commerce, Canadian Tobacco Manufacturers Council, Duty Free Association, Fédération des Chambres de Commerce du Québec (FCCQ),
Conseil du Patronat du Québec (CPQ), l'Association des marchands dépanneurs et épiciers du Québec (AMDEQ) and now Toronto Crime Stoppers. More information about NCACT can be found at www.stopcontraband.ca.
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