News Releases

December 18, 2006

doctors propose methods to
reduce tobacco smuggling.

  (Ottawa) – A national health charity has released an analysis showing that cigarette smuggling is a growing threat to Canadian health, and that the losses to the federal treasury more than offset the costs of restoring control over the tobacco market.  To address this problem, the group is proposing reform of the way cigarette taxes are collected and increased controls over raw tobacco and other ingredients used in the manufacture of cigarettes.

“Our analysis confirms that cigarette smuggling has become a significant health and fiscal challenge for government,” said Dr. Atul Kapur, president of Physicians for a Smoke-Free Canada. “There is a growing gap between the amount of cigarettes that Canadians say they are smoking and the tobacco tax revenues collected by federal and provincial governments.”

By analyzing Health Canada surveys on smoking, federal and provincial reports on tax revenues, municipal garbage audits and tobacco industry surveys, Physicians for a Smoke-Free Canada estimates that the market for illegal cigarettes was at least 10% in 2005 and is likely higher this year. The problem is worst in Ontario and Quebec, where PSC accepts industry estimates that 16% of smokers purchase black market cigarettes.

The estimates of this health charity are consistent with the report by Imperial Tobacco in October 2006 suggesting that one-quarter of cigarettes smoked in Ontario and Quebec were supplied through the black market and also with the estimates published this week-end in the Toronto Star, whose reporters used secret shoppers to demonstrate the ease with which untaxed cigarettes could be purchased in Toronto. “Where our estimates are lower,” said Dr. Kapur, “it is likely because the more recent data available to us was from 2005.”

“It is very disturbing that tobacco companies, newspapers and non governmental organizations are the only agencies producing estimates of the scope of the smuggling problem,” said Dr. Kapur. “Of the several government agencies involved in this issue – provincial and federal health ministries, revenue and finance departments, police agencies and customs departments – none has undertaken to systematically monitor the sale and use of untaxed tobacco.”

 “Because smuggling leads to higher smoking rates, it is a significant health risk,” said Dr. Kapur. “Communities are hurt in other ways as well – there are economic losses for governments and for businesses operating legally, the black market recruits more people into criminal work, and there is increased disrespect for the law.”

Illegally sold cigarettes harm health by increasing the number of cigarettes smoked. They also harm public finances by reducing tax revenues.  PSC estimates that in 2005 losses to governments increased by $280 million for the federal government and around $150 million each in Ontario and Quebec. The black market in cigarettes harms retailers and penalizes those who respect the law.

Last year, one-sixth of Canadian smokers admitted to government surveyors that they had traveled to a reserve to buy cheaper cigarettes. “Cheap cigarettes are bad for everyone,” said Dr. Kapur.  “The health of Aboriginal Canadians, on whom the burden of disease is already unfairly high, is particularly harmed by the widespread availability of cheap cigarettes and weak controls over commercial tobacco in their community.”

“We believe that there are ways that governments can reduce smuggling and improve relations between first nations and other Canadian communities, and that this can be done in ways which respect aboriginal self-government” said Dr. Kapur.  “The World Health Organization has provided guidance on how trans-boundary tobacco smuggling can be managed; these lessons can be applied to the borders within Canada as well.

PSC has proposed that federal governments, provincial governments and first nations governments implement measures to:

·      put conditions of license on tobacco manufacturers to ensure full collection of taxes and revoke licenses of manufacturers to fail to comply or fully cooperate

·      allow first nations communities to collect, retain and benefit from taxes on cigarettes

·      improve tax marking on cigarettes and implement effective ‘track and trace’ technologies on tobacco products

·      restrict the supply of raw materials for cigarette manufacture (tobacco, specialized filters, papers, machinery, etc) to legal manufacturers only.

·      provide first nations governments with assistance in meeting international treaty standards for tobacco control (i.e. by assisting the implementation of measures outlined in the World Health Organization’s tobacco treaty, the Framework Convention on Tobacco Control).

Dr. Kapur, an emergency physician in Ottawa, is calling on governments to quicken their response to this public health problem. “The best way to reduce wait times for health services is to protect people from becoming ill,” he advised. “Reducing tobacco use is the single most effective policy governments can put in place to reduce the demand for health care services.”

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For information:             Cynthia Callard, executive director
613 233 4878, 613 850-5594