Media

Contraband tobacco has cost Ontarians up to $1.7 Billion

TORONTO, ON, January 25, 2024 – As part of its efforts to be a leader in smoking harm reduction, Kory McDonald, Head of External Affairs, Rothmans, Benson & Hedges Inc. (RBH) appeared before the Legislative Assembly of Ontario’s Standing Committee on Finance and Economic Affairs to outline RBH’s recommendations for the 2024 Budget, focussing on key recommendations to combat contraband tobacco.

Ontario’s contraband tobacco market is controlled by and funds organized crime. Criminal groups involved in contraband tobacco use profits generated from the contraband tobacco market to fund other illegal activities, including guns, drug and human trafficking. Ontario’s contraband tobacco market increases the risk of youth access to nicotine products, due to no incentive for sellers of contraband tobacco to ID young customers.

Potentially one out of every two cigarettes, or 39 to 50 per cent of tobacco sales are illegal, according to a recent report by Ernst and Young and the Convenience Industry Council of Canada. This growing contraband tobacco market could represent up to $1.7 billion in lost provincial tobacco tax revenue from 2019 to 2023.

To help tackle the contraband tobacco market that benefits organized crime, RBH has recommended the Province of Ontario:

• Increase penalties in the Tobacco Tax Act to disincentivize the manufacture, distribution and sale of contraband tobacco products;
• Launch a public education campaign focused on the rules of purchasing legal tobacco and the risks of contraband products;
• Increase the ability of police officers to inspect vehicles suspected of containing contraband product;
• Assign Ministry of Finance investigators to monitor and report the illegal tobacco trade online; 
• Streamline inspections of retail stores selling tobacco products to ensure consistency across the province; and
• Incorporate category differentiation in the Tobacco Tax Act to incentivize adult smokers, who would otherwise continue to smoke, to switch to potentially less harmful alternatives.

QUOTE: Kory McDonald, Head, External Affairs, RBH:

“Without action, Ontario’s 1.5 million adult smokers will continue to face barriers to accessing potentially less harmful alternatives, the province will lose hundreds of millions in lost tax revenues each year due to the contraband industry, and organized crime will continue to thrive, putting Ontarians at risk. These modest steps could make a huge difference in protecting Ontarians from organized crime, increasing provincial tax revenue and helping curb youth access to tobacco and nicotine products.”

QUOTE: Danny Fournier, Manager, Illicit Trade Prevention, RBH:

“These are common sense steps that can have a big impact in terms of slowing the continued growth of the contraband tobacco market and keeping Ontarians safe. As well, there’s a need for government to acknowledge harm-reduced product categories within the Tobacco Tax Act to encourage adult consumers to switch to potentially less harmful alternatives to cigarettes.”  

To learn more about RBH, visit: https://www.rbhinc.ca/ 

About Rothmans, Benson & Hedges Inc.

Rothmans, Benson & Hedges Inc. (RBH), an affiliate of Philip Morris International Inc., is one of Canada’s leading tobacco and nicotine companies and is working to deliver a smoke-free future. RBH is committed to sustainability and creating a positive impact on communities, the economy, and the environment. Currently, RBH employs nearly 800 people across the country with its headquarters in Toronto and a factory in Québec City. Discover more about the company at https://www.rbhinc.ca/ and stay updated on RBH’s transformation by following Twitter and LinkedIn.

Media Inquiries:

Media Relations
Brayden Akers, Media Relations Lead
Brayden.akers@rbhinc.ca