Thursday, August 6, 2009

Either cut cigarette taxes or ban smoking altogether

You've probably heard the old saw...'when the law breaks the people, the people break the law'. Such certainly appears to be the case with cigarettes and the taxes placed on them. Legally purchasing cigarettes in the province of Ontario means paying at least $6.00 or $7.00 per package, or $60 plus per carton. As most smokers know though, there is another option...illegal cigarettes, often referred to as "Indian Smokes".

Instead of paying sixty bucks or more, many Ontarians are opting to frequent so called smoke shacks located on or near First Nation reserves. I myself am a smoker, and I will admit to having purchased discount smokes in places like Rama, Curve Lake and Alderville. I keep reading about prices being as little as $6 for 200 cigarettes, but I have never seen them that low. In fact the prices have been climbing of late from what I've seen and heard. Instead of the usual $10-$20 for a bag of 200, the price has gone up to about $25 at Curve Lake.

Still, $25 is a lot less than $60. And for those who prefer actual packages, as opposed to a zipper sealed baggie, there are brands like DK and Putters which can be had for around $30.

In this CTV news article, Conservative MPP Toby Barrett claims that half of Ontario's smokers are buying illegal cigarettes, which means they're paying no taxes on them. While the story doesn't point to any data to back up the Mr. Barrett's claim, I have little doubt about his assertion.

So what's the solution? In June the provincial legislature passed a law allowing for the suspension of drivers licenses for people caught with illegal cigarettes in their car. Ohhhh, doesn't that sound good.

"Step out of the car sir, let me see your cigarettes please".

Instead of fighting crime our police are now expected to be an extension of Queens Park's revenue agency. Technically its a "crime", because taxes aren't being paid. But cigarettes are a legal product in Ontario, so long as our governments are getting a hefty cut of the action. Estimated losses to government coffers are in the neighbourhood of $500 million, chump change when you consider the billions being tossed around to stimulate the economy.

Joe and Jane Smoker aren't going to sit on the money they're saving by buying "illegal smokes"...they're gonna spend the money on other things. Like gas to get to work, from which various levels of government collect huge tax dollars. Too bad there aren't illegal 'gas shacks' popping up on Ontario's reserves.

The solution is simple, either cut taxes on tobacco, thus eliminating the incentive to fill a huge demand for cheap smokes illicitly. Or better still, ban smoking altogether.

Politicians love to suck and blow at the same time, something with which we smokers are quite familiar. Enough is enough, if Dalton McGuinty is truly committed to making Ontario smoke free, then take the next logical step and ban the product entirely. And if there isn't the political will to do that, drop the taxes to a level that would make a carton of smokes competitive with the prices being charged on native lands.

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