Tobacco: Expensive Cheap Smokes

May 19, 2011

By Susan Irwin, Executive Director / Lawyer, Rural Legal Services

If the Ontario government has its way, the purchase of cigarettes from a road-side “smoke shack” could get a lot more expensive thanks to the recently introduced Supporting Smoke-Free Ontario by Reducing Contraband Tobacco Act, 2011. The introduction of the act didn’t seem to attract as much attention as one might have expected, but it may have been lost in the background noise thanks to the federal election and its announcement on the eve of the Easter long weekend.

The new legislation proposes numerous amendments to the existing Tobacco Tax Act, the upshot of which for people used to buying contraband cigarettes will be a whole new approach to dealing with these untaxed tobacco products. Not only will law enforcement officers have the clear right to seize untaxed tobacco products (legal cigarettes are identified by a yellow tear strip around the package confirming the payment of duty), but people possessing such products for their own use will face fines of between $100 and $500, plus a levy for unpaid tobacco taxes. Harsher penalties will also be imposed on people who are found to be selling such products.

Interestingly, smokers charged under the proposed act will not simply be issued a ticket – they will be required to attend at court. Taking a morning off work will be another expense to be considered when pondering the purchase of cheap cigarettes if the new law comes into force.

The proposed new scheme clarifies the power of the police to seize contraband tobacco products that are in plain view. At present, rather than just seizing the contraband tobacco, police may take the position that dealing with small amounts of such products is a job for the Ontario Ministry of Revenue. However, when police have made the call to the ministry, people have been in for a surprise as the assessment of penalties under the existing Tobacco Tax Act is severe. One person was shocked to find that his plastic baggie of cigarettes, noticed by a police officer when stopping him for an unrelated matter, was going to cost him about $800! And he lost the cigarettes …

The changes being proposed are just one more example of the government’s Smoke-Free Ontario Strategy: a strategy that has resulted in, among other things, the banning of smoking in restaurants, as well as in automobiles when children are present.

The issues surrounding the sale of contraband tobacco are many, and no doubt the new legislation will result in much discussion. To a lot of small store owners, who cannot compete in pricing because of taxes (purchase price- about $47 a carton); the changes – if enforced – are long overdue. Others may argue that the provincial government has no right to interfere in a trade that some consider be a traditional activity protected by treaty rights.

Before the act is passed into law, if indeed that occurs before the scheduled provincial election this fall, all the arguments for and against access to contraband tobacco (or any tobacco at all, for that matter) are likely to be heard. Those arguments will likely overshadow the other aspects of the legislation that are aimed at helping people to quit smoking and which, for space reasons, have not been dealt with in this column. It is difficult, however, to ignore the “white elephant” in the room when discussing the purchase and sale of tobacco: according to the Ontario government about 13,000 people die in Ontario each year as a result of tobacco use and we pay out about $1.93 billion in health care costs each year that are directly attributed to tobacco-related disease.

Legalese is a column of general information and opinion on legal topics by the lawyers of Rural Legal Services, Box 359, Sharbot Lake, ON, K0H2P0, 613-279-3252, or 1-888-777-8916. This column is not intended to provide legal advice. You should contact a lawyer to determine your legal rights and obligations.