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www.oakvillebeaver.com · OAKVILLE BEAVER Friday, June 4, 2010 · 14 Convenience store owners decry sales of illegal smokes By Tim Whitnell METROLAND WEST MEDIA GROUP Despite his assertion that south Halton has the lowest rate in Ontario of high school students puffing on illegal cigarettes, contraband tobacco remains a problem, says the head of the national convenience stores organization. At a recent press conference, Dave Bryans, president of the Oakville-based Canadian Convenience Stores Associations (CCSA), said the continuing problem causes public safety concerns, deprives the federal government of massive tax dollars and threatens the livelihood of thousands of variety store owners. Speaking outside his Burlington convenience store, Bryans decried what he calls the inaction of the provincial and federal governments in preventing the distribution and sale of illegal tobacco products. The CCSA is on a 25-city Ontario tour discussing contraband tobacco. The CCSA says illegal cigarettes comprise anywhere from 20-50 per cent of the cigarette market across Canada, depending on the region. The CCSA estimates that nearly half of cigarettes sold in Ontario are illegally produced. The CCSA 2009 Status Report says illegal cigarettes are those that avoid taxation and do not come with health warning labels, product testing and reporting, or government controls on their importation, stamping, manufacturing and distribution. Illegal smokes are often sold on the street or by the roadside in loose bags for $1 for a pack of 20, compared to $8 for a pack of government-regulated cigarettes, according to the CCSA. Bryans says they want to see the contraband figure reduced to 10 per cent in 2010. "By reducing smuggling to 10 per cent, the CCSA believes there will no longer be enough of a market to sustain the smugglers and that they will quickly stop investing time and money in this illicit trade which, in practice, should bring smuggling to zero." About 2,400 mainly family-run convenience stores have closed in Ontario in the last two years, said Bryans, noting there are about JAMES HOGGETT / SPECIAL TO THE BEAVER WHERE THERE'S SMOKE: Dave Bryans, president of the Canadian Convenience Stores Association, discusses the sale of illegal cigarettes. 9,000 in the province and 27,000 in Canada. He estimated there are about 150-170 convenience stores throughout the region. Bryans believes illegal cigarettes are not only a danger, but cost convenience store owners huge at the cash register. According to the CCSA, the sale of tobacco products can account for as much as 60 per cent of a variety store's sales. Even though the CCSA gives regular retail business training to its variety store owner members, Bryans said steep declines in overall sales might tempt "smaller, family-run businesses to start selling illegal products, which happened in Québec in the early 1990s. "We're a businesses licensed to sell tobacco legally to adults. And the fact is that contraband is causing us to lose droves of customers. This isn't just about tobacco sales, because when the adult smoker doesn't come into a store, we lose all the other business that comes with them: food, drinks, lottery tickets, snacks, etc.," said Bryans. "Kids shouldn't smoke -- period," he added. "And convenience stores are tasked by the government to keep tobacco out of the hands of kids. We take that responsibility seriously, and when we see kids getting tobacco freely from these contraband smugglers, we feel it's our obligation to sound the alarm. The CCSA-commissioned an independent research firm to collect cigarette butts from public areas where smokers gather at 55 high schools in Ontario and 50 in Québec. The 2007 Youth Contraband Study said that more than 11,000 cigarette butts (5,457 in Ontario and 5,810 in Quebec) were collected and examined and classified into three categories: legal, contraband or unknown. The study revealed that, in Ontario 24 per cent of cigarette butts collected from high schools were contraband, while in Québec contraband made up 35 per cent of those collected. The good news for Halton is that Burlington and Oakville had the lowest incidences of contraband, at nine per cent and eight per cent respectively, with the highest found in Newmarket and Aurora at 50 and 47 per cent. Bryans' press conference came on the same day that the Canadian government announced more initiatives to combat contraband tobacco and provide awareness of its "damaging effects" on communities. "Our government is taking further action to disrupt contraband tobacco, which undermines the safety and security of our communities," Minister of Public Safety Vic Toews said in a press release. "The importing, manufacturing and sale of illegal cigarettes has a significant impact on our economy, and fuels organized crime in our country." Minister of National Revenue Keith Ashfield added, "Enhancements to tobacco tax compliance programs and enforcement actions will help reduce contraband tobacco in Canada. In addition, the Canada Revenue Agency (CRA) will soon be launching a major advertising campaign to inform Canadians about the negative consequences of participating in the contraband tobacco market by purchasing illegal products." The Government of Canada website says that in July 2008 it joined with all provinces in a landmark settlement concerning tobacco smuggling that saw two major Canadian tobacco companies agree to pay $1.15 billion in fines. As a result of this settlement, the Minister of National Revenue announced a $20 million investment to combat contraband tobacco and to reduce tobacco consumption. As part of the new initiatives, the Royal Canadian Mounted Police will establish a Combined Forces Special Enforcement Unit Contraband Tobacco Team. Bryans said the provincial and federal governments need to do more to combat illegal tobacco sales, including granting Ontario Provincial Police and municipal police forces the power to lay charges against smugglers and to keep the proceeds of crime. "We believe this (latest federal initiative) will not solve contraband and is only a continuation of minimal measures when the governments all combined are losing over $2 billion a year in tobacco taxes. The Ontario Liberal government has done nothing at all over the last three years." Bryans is suggesting the ruling Liberals in Ontario remove the provincial tax (eight per cent) built into the cost of cigarettes and move it into the Harmonized Sales Tax being added to many products and services starting July 1, so that double provincial taxation doesn't occur when the HST arrives. The CCSA alleges most illegal tobacco comes across the border from the United States. Bryans said native reserves here have the right to produce their own tobacco products, but the problem, he asserts, is they are often sold off the reserve, which is not legal, he said. Rob Cunningham, senior policy analyst for the Canadian Cancer Society, said he has heard up to 95 per cent of illegal cigarettes in Canada are produced on native reserves in Brantford, Belleville, near Montreal and on the American side across from Cornwall, Ont. Cunningham doesn't support a reduction in tobacco taxes as he believes that will only encourage more people, including youths, to smoke. TAX EVENT Hurr y for Best Selection! 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