How Canada’s natives became cigarette smugglers

National Post

In the history of cross-border smuggling, the Thousand Islands in general, and this one in particular, have a special place. Scattered through the upper St. Lawrence River, with the republic on the south shore and the dominion on the north, the islands were a smuggler’s dream — the American border is only about 10 kilometres from where I live.

But those days are in the past, no competition for a reality even better than any smuggler’s dream: Indian reserves.

The smuggling action is now to the east of us on the cross-border Akwesasne Mohawk reserve near Cornwall, Ont., where illegal cigarettes from New York state can be brought into Canada without leaving the reserve. And to the west is the Tyendinaga Mohawk reserve near Belleville, which is another sort of customs-free entity, in which tax-free cigarettes, legal for native Canadians, are smuggled out and sold on the black market. As was reported on the front page of yesterday’s Post, it is estimated that nearly one-third of all cigarettes sold in Ontario and Quebec were illicitly tax-free, smuggled off native reserves.

The lawlessness of the Caledonia, Ont., property dispute, now well over a year old, brought to public attention a phenomenon well-known in the illicit cigarette trade–namely, that many native reserves are no-go areas for police and treasury agents.

Perhaps attention is being paid now. At the end of June, when the Ontario Provincial Police obligingly closed the 401 highway in order to facilitate the native “day of action” protests, many residents in these parts were rather taken aback that the police appeared to be on the side of the illegal blockaders. Yet that has been true for a long time in regard to illegal tobacco and the rule of law — the peddlers of contraband have no better friend than police who deliberately look the other way.

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Black market sales on the rise

Tilsonburg News

A recent study confirmed illegal cigarette sales are on the rise.
The Canadian Tobacco Manufacturers’ Council recently released a study showing 22 per cent of all cigarettes smoked in Canada are contraband. For Ontario, that figure jumps to 31.6 per cent and a local MPP maintains it could be as high as 70 per cent in parts of Norfolk County.

In a call phone interview, Haldimand-Norfolk-Brant MPP Toby Barrett commented on the fact he had just driven by five tobacco fields. Although that wouldn’t be unusual at one time for the provincial politician who represents the tobacco belt, it is in this instance. These are new fields within Six Nations.

Barrett is aware the new tobacco crop is being grown without quota and said this is taking a bite out of demand for what was once the main crop in his riding. Tobacco farmers are also losers when people purchase contraband cigarettes, as the tobacco isn’t produced domestically – unless it’s from the new fields, Barrett commented.

“Often times to enforce the law when people are flouting it you have to bring in the OPP or RCMP,” he said. Barrett added that having the law deal with those involved in the industry in Native territory could result in violence.

Given that the rate of contraband cigarettes purchased in Ontario is 32 per cent, Barrett called Premier Dalton McGuinty’s ‘war on tobacco’ a joke. The MPP said it was well intentioned but just didn’t work.

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Illegal cigarette trade thriving in Quebec and Ontario, new study indicates

PIERRE ST-ARNAUD
Thu Aug 2, 9:15 PM ET
Canadian Press

MONTREAL (CP) – The trade in contraband cigarettes is thriving in Canada, particularly in Quebec and Ontario, a new study by the Canadian Tobacco Manufacturers’ Council indicates.

The study, released on Thursday, says the trade has cost federal and provincial governments $1.6 billion per year in lost revenues. The majority of the illegal cigarettes are concentrated in Quebec and Ontario. Ontario accounts for 53.8 per cent of the volume and Quebec for 41.1 per cent.

Illegal cigarettes were defined for the survey as cigarettes and tobacco sold by individuals who are not paying the appropriate taxes or duty. Those smoking illegal cigarettes in Ontario has risen to 31.6 per cent this year from 23.5 per cent in 2006. Thirty-seven per cent of smokers in Quebec pull contraband smokes.

The council says traffickers in illegal cigarettes often also sell guns, contraband liquor and drugs.

The council said the source of the contraband tobacco has changed since the 1990s. The trade was based then on popular brands that were exported to the United States and then brought back into Canada and sold without charging tax.

Now the industry is based on tobacco imported in bulk from China and South Africa and then made into cigarettes on aboriginal reserves and sold without taxes.

“About 95 per cent of the cigarettes are manufactured on aboriginal reserves,” said Yves-Thomas Dorval, a spokesman for the council.

“The first place to develop a contraband network is always close to the source.”

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