Convenience Store Retailers Pleased With Contraband Measures, No Tobacco Tax Increase

TORONTO, ONTARIO--(Marketwired - April 23, 2015) - Ontario's convenience store retailers are applauding the provincial government's decision to not raise tobacco taxes in Ontario as part of the 2015 provincial budget, as well as new measures for policing agencies to deal with contraband offences.

"The Ontario Convenience Store Association (OCSA) is pleased that Finance Minister Charles Sousa is honouring his commitment from the Fall Economic Statement to tackle the underground economy," said OCSA president Dave Bryans. "We hope this is a recognition from the government on the impact that increasing tobacco taxes has on contraband tobacco trafficking."

Following a tax hike on tobacco products in the 2014 budget there was an increase in the percentage of contraband tobacco being smoked across the province. "Numbers suggest that illegal tobacco usage rates climbed 1.5% this year, representing 22.5% of cigarettes smoked," says Bryans.

Contraband tobacco is sold without mandated health warnings and without age verification checks, to anyone who is willing to buy. The RCMP estimates that over 70 organized crime groups and gangs are affiliated with the illegal tobacco trade. Increased taxes and regulations drive the tobacco market underground, meaning these products are both more affordable and accessible to youth.

"Another tobacco tax increase would have been devastating for Ontario's convenience store retailers," Added Bryans. "It is great to see the province taking a stand against the illegal tobacco trade."

The 2015 Budget also proposed new measures for enforcement agencies to pursue illegal tobacco offences, including the ability to stop, detain and search a vehicle if there are reasonable and probable grounds that it contains raw leaf tobacco. The OCSA was also pleased to recognize efforts from the Ministry of Finance to increase information sharing and compliance efforts with local Public Health Units.

While the OCSA is pleased with the decision to not raise taxes, the OCSA is asking the Ontario government to reconsider its proposed ban on menthol products, given they are already vastly available on the illegal tobacco market. "Unfortunately the outcome of a menthol ban will not be a reduction in youth smoking rates," says Bryans. "Our retailers take pride in upholding all provincial smoking laws, and a menthol ban would only unfairly punish retailers while driving sales to the underground economy."

ABOUT THE OCSA

The Ontario Convenience Stores Association (OCSA) represents more than 7,000 convenience store operators throughout the province who are committed to Responsible Community Retailing. More than 3 million people visit convenience stores in communities across Ontario every day.