OAKVILLE, Ontario – The latest contraband study, conducted on behalf of the Ontario Convenience Stores Association (OCSA), reveals that the volume of contraband tobacco being consumed by Ontario residents continues to rise at an alarming rate in every region across the province. The study finds that illegal cigarettes now account for 37.2% of all cigarettes smoked, up 13% from the previous year—and up 67% from only four years ago.

The highest contraband use was in Northern Ontario, where illegal cigarettes account for 60.4% of all cigarettes smoked, up from 54.2% last year. Southwestern Ontario showed the highest increase in contraband level, up from 26% in 2016 to 33.9% this year, and is now the second highest contraband territory in the province. In terms of locations where illegal cigarettes are found, high schools reported the biggest year-over-year increase in contraband levels with a 5% rise from the previous year.

“The rapid growth of contraband tobacco has meant increased profits for organized crime at the expense of hundreds of small businesses like convenience stores who are losing more than $1.1 billion in legal sales each year,” said Dave Bryans, CEO of the OCSA. “It’s time for the Ontario government to realize that every time they increase taxes on legal tobacco, more smokers turn to the black market.”

This marks the 10th year in a row that the OCSA has conducted the contraband study, considered one of the most accurate diagnostic tools for measuring the share of illegal cigarettes sold in Ontario. The continued spread of illegal cigarettes poses a number of serious social and economic problems, including the fact that government policies are making illegal tobacco products more popular. Repeated government tax hikes mean the retail price gap between legal tobacco and contraband tobacco continues to widen, making illegal cigarettes financially more attractive, particularly to lower-income residents and minors.

Organized crime groups are actively involved in the distribution and sale of illegal cigarettes and profits from contraband tobacco are being used to fund other criminal activities that pose a threat to Ontario communities. Plus, the provincial government is forfeiting hundreds of millions of dollars per year in tax revenue while legal vendors such as convenience store owners in Ontario are losing over $1.1 billion per year as a result of sharply declining in-store sales of tobacco.

“The Ontario government has already announced plans to increase tobacco taxes again in their next budget. Our members are demanding the government reconsider the schedule of these tax increases until we have effectively dealt with the growth of contraband tobacco in Ontario,” he said.