Legislation to reduce tobacco taxes in Ontario
By MPP Toby Barrett

For several weeks I have been writing about the illegal tobacco trade that has forced the legal market and its farmers to significantly shrink, and many corner stores to close their doors for good. While we cannot turn back time, what we can do is preserve what we have and work towards a safer, more law-abiding and prosperous future.

To that end, I have been drafting legislation -- the Tobacco Tax Reduction Act --  that would reduce tobacco taxes in Ontario by one-third.  I am proposing that the tax rate on each cigarette be slashed from 12.35 cents to 8.23 cents by amending the Tobacco Tax Act. I am calling on the Federal government to do their part by cutting tobacco taxes as well.

Tax cuts, coupled with enforcement and education, are the only way government will win the war on organized crime.

It was this type of cooperation that shut down illegal tobacco in 1994. During the 1980s and 1990s, high tobacco taxes and retail prices fostered smuggling and by 1991, it was believed that one in every nine cigarettes in Canada was contraband, yielding $709 million to smugglers.

The Federal government realized the situation had spiraled out of control and it was time to take action. As a result, Ottawa cut taxes in February 1994 from $10.36 to $5.37 per carton of 200 smokes. Some provinces like Quebec, New Brunswick, Ontario, Prince Edward Island and Nova Scotia followed suit. Ottawa then decided to aid further but cutting taxes even further in those five provinces and by April 1994, taxes had been reduced by a total of between $14 and $21 per carton.

In Ontario, taxes on a carton of cigarettes were cut from $28.85 in 1993 to $9.65 in 1994 which largely slammed the door on the illegal trade. Overnight hundreds of smoke shacks closed their doors.

At 50 per cent, Ontario has the highest percentage of illegal tobacco of almost anywhere in the world – much higher than back in 1994. Today Ontario’s world-recognized tobacco control policies are no longer working and the province has gone from first to worst.

The McGuinty government has spent $13 million on Smoke-Free Ontario and $7 million on cessation ads in recent years and yet the number of smokers does not seem to be going down. A prime example locally surfaced just a few months ago, when we learned that despite Mr. McGuinty’s ‘war on tobacco’ there has been a 33 per cent increase in smoking in the Hamilton Niagara Brant LHIN (Local Health Integrated Network) catchment area.

It doesn’t take a rocket scientist to figure out that these people are accessing smokes close to home from a smoke shack or from the trunk of a car – with the advantage of not paying taxes of any kind.

It is high time government admit that the fight on untaxed, unregulated and un-forced tobacco operations has and continues to be ineffective and then take the necessary bold actions needed to return public safety to our communities.

The success of my Tobacco Reduction Act will ultimately depend on the McGuinty government. This is an opportunity for the Ontario Liberals to do something positive for the people of Caledonia, for tobacco farmers, and for corner store operators across the province.

My bill will be debated in the Ontario Legislature on Thursday, September 24.