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Logo of bmjThis ArticleThe BMJ
BMJ. 2007 May 12; 334(7601): 974.
PMCID: PMC1867879

Sharp rise in sales of untaxed cigarettes in Canada threatens public health

The 70 member Canadian Coalition for Action on Tobacco has launched a national campaign to persuade the provincial and federal governments to crack down on the illegal tobacco market. Cigarettes can be bought easily for about a 10th of the price of their legal counterparts on the streets of Canada's major cities.

Early release articles on the website of the Canadian Medical Association's journal show that the illegal cigarettes are typically sold in plastic bags, with no health warnings, for as little as C$8 (£3.60; €5.30; $7.20) for 200 cigarettes, whereas legal brands cost as much as C$80 ( dois: 10.1503/cmaj.070562 and 10.1503/cmaj.070609).

Canada's largest legal cigarette manufacturer, Imperial Tobacco, estimates that 95% of the illegal trade originates on First Nations (aboriginal peoples') reserves. Federal taxes do not apply to cigarettes made or sold in the reserves, and these cigarettes are often smuggled out of these areas.

The coalition argues that the cheap cigarettes are seriously undermining public health initiatives to restrict smoking. The measures it proposes include a ban on the supply to unlicensed tobacco manufacturers of raw materials such as paper, filters, and raw leaf tobacco and raising the minimum bond for a tobacco manufacturing licence from C$5000 to C$5m.

Neil Collishaw, research director for Physicians for a Smoke-Free Canada, says the availability of cheap tobacco “is completely illegal, all of it without taxes at all, and now with distribution networks quite widespread in Ontario and Quebec and rapidly spreading elsewhere.” He added, “We can see our whole policy [of reducing tobacco consumption through high taxes] being eroded.”

The coalition says the permanent solution lies in structural, legislative, and regulatory reforms, including new laws that would enable reserves to levy a First Nations tobacco tax, with the revenues being ploughed back into social and economic projects on their reserves.

Also needed is a major diplomatic initiative to convince the US government to shut down illegal, unlicensed manufacturing operations on the US side of the Akwesasne reserve straddling the Ontario, Quebec, and New York state border.

Indicating how the illegal trade in cigarettes is growing, Superintendent Joe Oliver, director of the Royal Canadian Mounted Police's customs and excise programme, said, “[Since 2001] we have seen a 1700% increase in the number of tobacco products the Royal Canadian Mounted Police has seized. In 2001 we seized around 29 000 cartons. Last year we seized 502 000.” Nearly all of these came from the US side of the Akwesasne reserve.

Grand River Enterprises, a legal manufacturer located on the Six Nations Reserve near Brantford, Ontario, is now Canada's third largest tobacco company. Annual sales have been estimated at hundreds of millions of dollars, indicating that many of the cigarettes are bought by people other than the residents of the reserves who are entitled to buy them.

The prevalence of smoking among First Nations peoples is “more than double the rate for the rest of Canada,” says a 2001 report by the Assembly of First Nations. “First Nations girls between 15-17 years old have a smoking rate of 61%—four times the national smoking rate of girls in the same age group.” And almost 60% of pregnant First Nations women smoke.

Articles from The BMJ are provided here courtesy of BMJ Publishing Group