Are higher prices leading Canadians to fund organized crime?
In response to the Government of Canada's 2024 budget, the National Coalition Against Contraband Tobacco (NCACT) issued a warning regarding the rise of organized crime linked to the illicit tobacco industry.
Rick Barnum, NCACT's Executive Director and former Ontario Provincial Police (OPP) Deputy Commissioner, highlighted the detrimental impact of tax hikes on cigarettes, driving more Canadians towards illegal markets.
“The illicit market for tobacco is enormous and growing," said Barnum. "By raising taxes on cigarettes, the federal government is only pushing more struggling Canadians into the illegal market, it’s bad for health, and good for organized crime.”
The Royal Canadian Mounted Police (RCMP) estimate there are over 175 organized crime groups involved in the illicit trade.
Failing to tackle the growing illicit tobacco industry not only allows criminal activity to flourish, but it denies the provincial and federal governments much-needed tax revenue.
A recent report by Ernst & Young (EY) focusing on the cost of the illicit tobacco trade in Newfoundland, Ontario and British Columbia found that the estimated tax revenue loss is up to $2.47 billion in Canada over the last several years alone.
Compounding the problem, the profits from the illegal trafficking of tobacco funds other criminal activities, hurting the safety of Canadians.
“In addition to higher taxes pushing more Canadians to the illegal markets, there is no commitment in the federal budget to tackle the growing illicit industry from a policing perspective," said Barnum.
"It is time for the federal government to take the illicit market seriously, and dedicate funding to police forces to focus on curbing the illicit tobacco industry. Without action now, the illicit trade will continue to grow and fund other illegal activities that are hurting communities."