The federal government does not know how much tobacco is smuggled across the country..A report to Parliament says that cigarette manufacturers estimate it costs billions in lost taxes, according to Blacklock’s Reporter.. Seized smokesSeized smokes .“The excise reporting gap was estimated to be on average $400 million of federal excise revenue for the tax years 2014 to 2018,” the cabinet wrote in an Inquiry of Ministry tabled in the Commons. However, the $400 million figure included tax revenue lost to contraband of all kinds..Figures were sought by Conservative MP Philip Lawrence (Northumberland-Peterborough South, ON), who asked “How much does the government collect in tobacco taxes annually and what is the amount of federal tax revenue that is lost from the sale of illegal, untaxed tobacco?”.In 2022, the Canada Revenue Agency reported collecting $1,8 billion in tobacco taxes. However, no estimation was provided regarding the amount of tax revenue lost due to smuggling..According to a submission made by Imperial Tobacco Canada Inc. to the Senate Legal and Constitutional Affairs committee in 2022, it was estimated that billions of dollars are lost due to tobacco smuggling..“Illegal tobacco costs around $2 billion annually in lost tax revenue with that money diverted to some of Canada’s most notorious organized crime groups,” wrote Ralf Wittenberg, Imperial CEO. .“Despite this, the federal government has barely mentioned illegal tobacco since 2015, let alone taken any measures to address it.”.“Canada’s illegal tobacco problem is now a national issue that spills beyond our borders with illegal Canadian product turning up in the United States, Mexico, the Caribbean and Central America,” wrote Wittenberg. .“Domestically, after several years of relative stability, the illegal market is growing again.”.“This has been driven mainly by persistently high rates in Ontario estimated at 35% to 40% and a recent explosion in British Columbia where we estimate the rate has grown to 35%,” said Wittenberg. .“Numerous reports from law enforcement agencies, think tanks and media have drawn clear links between illegal tobacco and other criminal activities including drug and weapons trafficking.”.By an official estimate, some 5.3 million Canadians are casual or daily smokers, about 18% of the adult population. Rates have remained virtually unchanged since 2013. The department of Health has targeted a 5% smoking rate by 2036..In a report obtained through an Access to Information request in 2014, the department of Public Safety stated that it did not possess a reliable estimate of cigarette smuggling. However, it did characterize the trade as “brisk.”.“Illegal supply is flourishing,” said one study Comments For Public Safety Canada. .“At the present time, there is evidently some disagreement on the scale of the illegal market.”
