Smoking legal tobacco just got a whole lot pricier.
Light-headed and disoriented, smokers stumbled out of convenience stores across the country Feb. 12 with a whole new problem. An excise tax increase of 24 per cent on all tobacco products in Canada came bundled in this year’s federal budget.
“Taxing tobacco products at a sustainable level is an important element of the government’s health strategy to discourage smoking among Canadians,” the budget says.
The average price of a carton of legal cigarettes in Ontario is now about $85. Around 70 per cent of that number is made up of federal and provincial excise taxes.
The federal government expects to make $3.3 billion in revenue by the 2018 fiscal year as a direct result of this increase.
It’s estimated that tobacco-related illnesses in Canada are responsible for $17 billion per year in social costs, and another $4.4 billion in direct health-care costs. Only 17.3 per cent of the Canadian population smokes tobacco.
In a recent study conducted by the University of Toronto’s Dr. Prabhat Jha, it was concluded that the best way to reduce death rates caused by smoking, particularly in developing nations, is to dramatically increase excise taxes on tobacco products, thus making cigarettes virtually impossible to purchase.
Increased taxes are especially suited to young smoker cessation because for them money is already limited. They usually react quickly to even nominal fluctuations in price, says Jha. However, analysts worry that the increased tax rate may push low-income, dependant smokers into buying untaxed contraband tobacco instead of quitting altogether.
Nearly half of the cigarettes smoked in Ontario are contraband according to a survey conducted by the National Coalition Against Contraband Tobacco. The study showed that contraband cigarettes are in widespread use in high schools across the province too, representing around a third of consumption.
According to an Onondaga tobacco retailer, who wanted to remain anonymous for legal reasons, “a manufacturers’ increase happened about a week and a half ago and it ranges anywhere from $1.20 a carton to $5 a carton, than the budget came down adding another four bucks.”
For a 10th of the legal price, a “buttlegger” can buy cigarettes from an Indian reserve, sell them at a 100 per cent profit and still provide a half-off deal to the buyer. This extremely high return on investment has made cigarettes the most widely smuggled legal substance in the world, let alone Canada.
Canadian law states that anyone found with up to 200 duty-free cigarettes and is unable to produce an Indian Status card will face a minimum set fine of $100 plus three times the tax. For anyone in possession of 1,000 or fewer cigarettes, the fine is $250.
“A person convicted of possessing more than 10,000 illegal cigarettes or any number of illegal cigarettes for the purpose of sale is subject to the current minimum fine of $500 plus three times the tax,” says Ontario’s Ministry of Finance website.
“(Ontario Premier Kathleen) Wynne is going to stop what she refers to as contraband cigarettes,” the retailer said. “She’s making Ontario tobacco-free, you know? Ontario’s going to be the first tobacco-free province. Obviously she doesn’t smoke.”
Apparently upset with the tax hike, the smoky voiced retailer said “we get a lot of seniors asking where they can buy marijuana, but I have no idea, so I’m going to start asking around to find out how much marijuana is in comparison, because I bet it’s cheaper now.”
Entire cartons of tax-free “Indian smokes” can be bought in Onondaga for as little as $10.
On Highway 54, leading into Six Nations of The Grand River, Onondaga, “smoke shacks” line the street. Many of the shops advertise discounts like “buy nine cartons, get one free,” and retailers regularly hand out free cigarette samples to customers.
Cigarettes are bought and sold tax free regardless of status on most Indian reserves in Canada.
“In 2011, the RCMP seized approximately 598,000 cartons/unmarked bags of contraband cigarettes, 2,200 kg of raw leaf tobacco and 38,000 kg of fine cut tobacco,” says the most recent RCMP fact sheet on illegal tobacco.
The RCMP does not have jurisdiction on Indian land, and is, therefore, limited in the amount of action they can take.
Near the entrance of Six Nations of The Grand River, there’s a little trailer on a gravel drive owned by Grand River Enterprises (GRE), a local cigarette manufacturer and distributor. A huge illuminated sign is attached to the front of a large carport-like wooden structure which towers over the small trailer conversion. Inside, thousands of contraband cigarettes are stored and ready to be sold.
The sign was apparently owned by Brantford’s Putt Hutt, a children’s glow-in-the-dark miniature golf course, but was recently sold and repurposed by GRE. A burning cigarette now dangles from the lips of the smiling golf ball head that hovers in the space between the apt words Puff and Hutt.
An All Nations Security pick-up truck parks beside the Puff Hutt around the clock. Its inhabitant, a haggard man soaked in smoke, can be seen glaring at apprehensive and anxious visitors who hurry in and out of the tiny smoke shack on the edge of town.
A cloud of tar vapour with hints of brandy escaped as the guard manually rolled down the Silverado’s window to mumble a few words. The powerful scent was unmistakably that of cheap cigarillos, aged and pressurized inside the cab
With a cigarillo dangling from his lips, like the Puff Hutt’s golf ball head mascot, hollow-eyed and dreary, he said, “Someone comes and robs them once in a while. They all have security. It’s all over.”
As the day of the smoker burns closer to an end, many non-smokers now pity the last of a dying breed compelled by that no longer timeless James Dean cool, enveloped in smoke and free like the wind in Marlboro country.
“Canada is not a good country to be a smoker,” said National Post commenter “Noahbody.” “Besides the weather, the government makes sure that smoking will be an unpleasant experience. Every time I see packs of freezing, miserable, stinking, smoking addicts huddled together outside some building, their faces pinched in discomfort, I feel bad for them.”
In the haunting and evermore prophetic Marlboro ads of the 1970s, Marlboro man actor Eric Lawson famously said, “No, you don’t see many wild stallions anymore. Even if he did run off three of your best mares, he’s one of the last of a wild and very singular breed. Come to where the flavour is. Come to Marlboro country.”
Lawson, the wild stallion, died in January 2014 from chronic obstructive pulmonary disease and will be forever immortalized in those now infamous words, “come to where the flavour is. Come to Marlboro country.”