Cigarette Madness

This week a national lobby group is touring the Maritimes meeting elected and law enforcement officials to raise awareness about contraband cigarettes. The National Coalition Against Contraband Tobacco (NCACT) is warning the contraband trade is not a victimless crime; citizens are ‘victimized’ because revenue is not flowing to government, youth have access to contraband cigarettes and retailers are being hurt. The NCACT is pushing governments to spend money on new dedicated contraband police units. New Brunswick has just launched a contraband enforcement unit as did Ontario. 

NCACT says 200 contraband cigarettes can be bought for about $10. How good a deal is that? According to the Non-Smokers’ Rights Association the pre-tax price of 200 cigarettes in Nova Scotia is $29.35, then $21.03 in Federal excise duty is added (that’s 72%), Nova Scotia then adds an excise duty of $51.04 (that’s 174%) and then HST is charged (on the original price and the duties) adding a further $15.21 making the final price paid by the consumer in Nova Scotia in 2015 somewhere north of $116.63. That’s a 400% increase in the original price! And predictably this interference in private markets has created a massive black market providing criminals with a great source of cash.

The status-quo solution is to make the problem worse. The Nova Scotia government raised the price on cigarettes by 50 cents per pack in April. This is the fourth increase in six years. NCACT says there is a contraband epidemic occurring in Nova Scotia and The Atlantic Convenience Stores Association reacted to the latest hike by stating this approach is only making things worse.

What’s the solution to this mess? Eliminate the federal and Nova Scotia excise duties and allow retailers to sell cigarettes at a reasonable price. Contraband cigarettes would disappear, laws would be respected, the youth protected, sales taxes collected, lobby groups would not be needed, retailers would do better, police resources would be diverted to more important matters, and a massive low-risk cash cow for criminal elements would be eliminated. Overnight.

It is disturbing the Nova Scotia government persists in creating all these problems just for the sake of an outrageous cash grab.