POINTE CLAIRE, Quebec €" Higher cigarette taxes will not lower smoking rates, wrote Michael Gadbois, senior vice president of the Canadian Convenience Stores Association, in an opinion piece in the Montreal Gazette.
"Such a law will only hurt law-abiding retailers and force consumers to the unregulated, untaxed, criminally run contraband tobacco market," wrote Gadbois in response to a recent article recommending a minimum cost for cigarettes. "We have already begun to see such a phenomenon as a result of higher taxes on tobacco products. Retailers in the legal industry are seeing their customers turn to the illegal market on native reserves, where authorities are not enforcing laws and cigarettes can be purchased for a fraction of the regular price."
Currently, convenience stores sell a carton of 200 cigarettes for $70.81 on average. Gadbois pointed out that the same carton goes for $11 on the black market. "Multiply this over a year: By choosing contraband, smokers save up to $3,000 net. The government expects cash-strapped smokers €" as the study mentioned, most smokers are among the less wealthy €" to pay out $3,000 per year just to be honest. We think that is naive and even hypocritical."
He urged the government to not raise tobacco taxes. "Convenience-store owners are on the front line of this war, and see every day the effect of contraband on their dwindling sales. And while they must abide by 200 different tobacco-related regulations, the smoke shacks are respecting none."
Gadbois concluded that "governments urgently need to mobilize their resources to the highest degree, get every concerned ministry involved, integrate their actions, work together and create an anti-contraband culture among the population. That is the most promising path toward a solution €" not raising tobacco taxes again to make the problem worse."