Imperial Tobacco Canada has submitted to the Senate National Finance Committee (SNFC) figures that show tobacco smuggling is now worth $2.5 billion a year in lost tax revenue, the highest estimate to date. The cigarette manufacturer said smuggled cigarettes are worth nearly 40% of the market in some provinces, Blacklock’s Reporter reported. “Illegal tobacco is costing the federal and provincial governments $2.5 billion in lost tobacco tax revenue annually,” Imperial wrote the SNFC. “Meanwhile organized crime groups behind Canada’s illegal tobacco trade continue to use it as a cash cow to fund other criminal activities including drug and weapons trafficking.”Imperial had commissioned research by Abacus Data to assess the bootleg market in BC, Alberta and Ontario. “Abacus Data measured the illegal tobacco rate in Alberta at 36%, in British Columbia at 34% and in Ontario at 33%,” wrote executives. “For Alberta and BC these are the highest rates we have ever seen.”“Canada has an immense illegal tobacco problem,” wrote Imperial. “At the national level we estimate illegal tobacco makes up roughly one third of the market and this rate has been growing in recent years.”The Canada Revenue Agency (CRA) collects $1.8 billion a year in tobacco taxes. Imperial’s estimate of $2.5 billion in lost tobacco tax revenue annually was six times the losses calculated by cabinet in a 2023 Inquiry Of Ministry tabled in the Commons at the request of Conservative MP Philip Lawrence, who asked, “What is the amount of federal tax revenue that is lost from the sale of illegal, untaxed tobacco?”“The excise reporting gap was estimated to be on average $400 million,” said the 2023 Inquiry. About 18% of the adult population in Canada, about 5.3 million people, are casual or daily smokers, official estimates show. Rates have remained steady since 2013. However, the Department of Health has an agenda to slash smoking down to a rate of only 5% of the population by 2036.A 2014 Access to Information report shows the Department of Public Safety had no reliable estimate of cigarette smuggling at the time, but said illegal trade is “flourishing.” “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.”
Imperial Tobacco Canada has submitted to the Senate National Finance Committee (SNFC) figures that show tobacco smuggling is now worth $2.5 billion a year in lost tax revenue, the highest estimate to date. The cigarette manufacturer said smuggled cigarettes are worth nearly 40% of the market in some provinces, Blacklock’s Reporter reported. “Illegal tobacco is costing the federal and provincial governments $2.5 billion in lost tobacco tax revenue annually,” Imperial wrote the SNFC. “Meanwhile organized crime groups behind Canada’s illegal tobacco trade continue to use it as a cash cow to fund other criminal activities including drug and weapons trafficking.”Imperial had commissioned research by Abacus Data to assess the bootleg market in BC, Alberta and Ontario. “Abacus Data measured the illegal tobacco rate in Alberta at 36%, in British Columbia at 34% and in Ontario at 33%,” wrote executives. “For Alberta and BC these are the highest rates we have ever seen.”“Canada has an immense illegal tobacco problem,” wrote Imperial. “At the national level we estimate illegal tobacco makes up roughly one third of the market and this rate has been growing in recent years.”The Canada Revenue Agency (CRA) collects $1.8 billion a year in tobacco taxes. Imperial’s estimate of $2.5 billion in lost tobacco tax revenue annually was six times the losses calculated by cabinet in a 2023 Inquiry Of Ministry tabled in the Commons at the request of Conservative MP Philip Lawrence, who asked, “What is the amount of federal tax revenue that is lost from the sale of illegal, untaxed tobacco?”“The excise reporting gap was estimated to be on average $400 million,” said the 2023 Inquiry. About 18% of the adult population in Canada, about 5.3 million people, are casual or daily smokers, official estimates show. Rates have remained steady since 2013. However, the Department of Health has an agenda to slash smoking down to a rate of only 5% of the population by 2036.A 2014 Access to Information report shows the Department of Public Safety had no reliable estimate of cigarette smuggling at the time, but said illegal trade is “flourishing.” “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.”
