TORONTO – Canadian retailers operating stores in the geographic boundaries of Toronto are preparing to combat proposed regulations that would force them to collect tobacco taxes, according to the Ontario Convenience Stores Association (OCSA).

“The City of Toronto is going to bring in a new city tax on cigarettes within the boundaries of Toronto. This tax could increase the price of a package of cigarettes by as much as 10 percent,” notes a memo circulated by the OCSA. Retailers would be responsible for collecting and remitting tobacco taxes to the Toronto city government.

“Convenience stores across Toronto will suffer greatly for this,” says the memo, noting that retailers would incur costs such as purchasing a new cash register system to accommodate the new tax, and that citywide tobacco sales could drop by as much as 50 percent.

“This is exactly what happened when it was implemented in New York City. This impact will be felt the most for those of you who border the 905 area as your customers will almost certainly drive the short distance to Mississauga, Vaughn or Pickering to buy cigarettes where there will be no tax …You could face even more severe losses in sales. And, since so many people who buy cigarettes also buy other products in your store, you will see a drop of overall sales not just tobacco sales,” writes the OCSA.

The OCSA is calling retailers members to combat the tobacco regulations by contacting city councilors and communicating their opposition to the tobacco tax increase, attending a June 25 Executive Committee meeting and voicing their concerns, and attending a July 16 to 18 City Council meeting where Toronto councilors are expected to be voting on the new regulations.

“This is one of the many issues we face that we have an opportunity to stay in front of the decisions, present our case and demonstrate our cohesive knowledge of the issue to the uninformed,” said OCSA President Dave Bryans.