March 3, 2015
On March 3, 2015, Dawson Strategic in partnership with the Macdonald-Laurier Institute (MLI) hosted the second of two meetings on the issue of contraband tobacco. Building on the previous meeting held in Ottawa in November 2014, this meeting convened a broad group of interested stakeholders from government, business, academia, and First Nations.
The objective of the meeting was to raise awareness of the seriousness of the contraband tobacco problem in Ontario and provide concrete policy solutions to provincial policymakers. The timing of the event fit well, in advance of the Government of Ontario’s March 2015 budget, given the government’s stated desire to recoup significant lost tobacco tax revenues.
The meeting opened with an invocation from Akwesasne Council Chief Steve Thomas. After, Marc Sharett (Director, Program Policy & Analytics Branch, Ontario Ministry of Economic Development and Trade) provided remarks on the Government of Ontario’s position on the issue and the “incremental steps” the government has taken to tackle contraband tobacco. MPP Toby Barrett provided unplanned remarks to the audience, emphasizing the severity of the problem in his riding, Haldimand-Norfolk and that the legitimate industry “can’t compete with contraband”. He urged the Ontario government to take serious action on the issue.
Next, Dr. Christian Leuprecht delivered a presentation summarizing the latest findings of his research on the contraband tobacco problem in Canada. MLI provided participants with a discussion paper titled Tax and Enforcement: Tackling Ontario’s contraband tobacco problem.
Afterwards, Dr. Laura Dawson introduced the panel of experts. They each gave a 10-minute overview of their positions on the topic, following which Dr. Dawson posed a series of questions to each panelist. The panel consisted of:
- Christian Leuprecht (Associate Dean, Faculty of Arts, Royal Military College of Canada)
- Jim Ransom (Mohawk Council of Akwesasne)
- Nachum Gabler (Economist, Tax Policy Specialist)
- Tasha Kheiriddin (Writer, Broadcaster, and Policy Expert)
- John Jones (Sûreté du Québec)
Key Messages from the Panel Discussion
The panelists emphasized several high-level messages throughout their remarks, including:
- Contraband tobacco is a serious issue for Canada in general and Ontario in particular and the amount of contraband in these markets is higher than average.
- The issue will not be solved unless the wide price differential between legal and illicit cigarettes is closed.
- Taxes are at the root of the problem and in certain cases have helped fuel the contraband tobacco market.
- The Ontario government should lower taxes and increase efforts/resources on the enforcement front.
- Quebec has had success with Bill 59 and the ACCES program has resulted in very positive returns on investment.
- Contraband is linked to organized crime and tackling it helps address broader criminal issues (e.g. gangs).
- It is difficult to get reliable data on the contraband issue in Canada.
- Aboriginal taxation schemes could be part of the solution and legitimate engagement at an early stage is critical.
Leuprecht was interviewed on the Global News program Focus Ontario, CBC Radio One in Windsor and Radio-Canada.