Illegal cigarette sales eating into Alberta's revenues: Red Deer speaker

Illegal cigarette sales are robbing Alberta of hundreds of millions of tax dollars for the health care and public education systems, an Alberta Chamber crowd heard in Red Deer.

Whether you're a smoker, inhaling this unregulated product, or a non-smoking Albertan who depends on quality public services, contraband cigarette sales are causing wide-spread harm, said Sara MacIntyre, western Canadian vice-president for the Convenience Industry Council of Canada (CICC).

She told a crowd of about 150 delegates at the Alberta Chamber of Commerce annual general meeting in Red Deer on Friday that tobacco tax revenues in this province were almost halved from 2017-18 to 2021-22, falling from $911 million to $522 million over three years. This money is that could have been used to support all kinds of public services, she added.

'Harm' can also be measured in terms of increased community violence. Organized crime is getting more heavily involved in illegal cigarette sales because profit margins are much greater than with cocaine and cannabis, said Ron Bell, a retired Winnipeg Police officer who's now the lead illicit trade prevention officer for Rothmans and Benson & Hedges cigarette companies.

Wherever there's organized crime there are killings and other violence, stressed Bell, who gives awareness-raising talks about the dangers of contraband tobacco to law enforcement agencies. He noted the last couple of big busts of illegal tobacco also involved illegal firearms, drugs and cash.

In the last nine months, Alberta seized over 35 million contraband cigarettes. In recent months, Alberta, Saskatchewan and Ontario have all taken steps to address this growing issue. Alberta announced a new working group to tackle contraband tobacco in its 2024 budget. 

Bell and MacIntyre were among the panel speakers at the annual general meeting of the Alberta Chamber of Commerce at River Cree Resort and Casino.The Alberta Chamber of Commerce is holding its 86th Annual General Meeting and Policy Plenary Session in Red Deer in Friday and Saturday as it circulates these meetings throughout the province.

MacIntyre's council represents the interests of convenience store operators, who once derived about 30 per cent of their profits from legitimate cigarette sales. Since the proliferation of back-room and online contraband cigarettes, profits have plunged and about 50 convenience stores have closed in Alberta in the last two year. MacIntyre added many of these stores were in small communities that depended on them.

"Cheap cigarettes" or vaping supplies tend to be available at independent corner stores, are sold out of the back of vans at bingos and other events, or can be ordered online and delivered to homes through the mail. Bell said no one checks the ages of buyers.

Tests show the unregulated product can contain dust mites, feces and other non-tobacco ingredients —  but not the safety feature that causes legal cigarettes to self-extinguish when left unattended, added Bell. More house fires have resulted, including a series of blazes in London, Ont. that caused three deaths, he said.

Tobacco used in these illegal products is either grown in Southern Ontario or brought illegally into the country from the U.S. The contraband cigarettes are manufactured on First Nations land in southern Ontario and Quebec, said Bell. While police forces could technically bust these operations, he believes they are hesitant to enter Indigenous land "because no one wants another Oka or Caledonia" — previous police stand-offs with Indigenous blockades.

Shauna Feth, president and CEO of the Alberta Chamber of Commerce, said she's interested in learning more about the "complexities" of illegal tobacco sales because they are having significant impact on Alberta businesses.

Other items on the Alberta Chamber's AGM agenda include a presentation from the Red Deer and District Chamber on its homelessness task force, a talk by the Advanced Education Minister of efforts to expand skilled trades, and discussions about emergency preparedness and jobs of the future.