Canada’s fight against illegal tobacco is failing. Contraband tobacco products flood our communities, dodging taxes, undermining public health, and fuelling organized crime.
Despite existing laws, weak enforcement and loopholes allow this dangerous market to thrive. It’s time for Canada to take a lesson from the United States playbook by adopting stricter measures like the Prevent All Cigarette Trafficking (PACT) Act, a law that cracks down on illegal sales, blocks postal shipments, and protects youth.
Illegal tobacco isn’t a victimless crime. These unregulated products often contain higher levels of toxins, bypass health warnings, and are cheaper, making them easier for minors to access.
Worse, profits from contraband fund gangs and criminal networks, putting communities at risk. Health Canada estimates roughly one-in-five cigarettes smoked nationally is illegal, costing governments over $2 billion annually in lost tax revenue.
This isn’t just about money. It’s about safety.
Canada has rules. The Tackling Contraband Tobacco Act (2014) imposes jail time for large-scale trafficking, and provinces like Saskatchewan slap fines on sellers of unstamped products.
But enforcement is patchy. Police face hurdles investigating indigenous reserves where some illegal production occurs, fearing legal or political conflicts.
Resources are stretched thin, and courts sometimes dismiss cases on technicalities.
High tobacco taxes, which are meant to discourage smoking, ironically push consumers toward cheaper, untaxed alternatives. Without stricter controls, the black market wins.
South of the border, the U.S. PACT Act offers solutions. It was enacted in 2010 and expanded in 2021. It bans shipping tobacco and vaping products through the U.S. Postal Service, forcing sellers to use private carriers that check IDs and collect taxes.
Companies must register with tax authorities and report sales, making it harder to dodge oversight. The law also slaps steep penalties on violators and now includes vaping devices, closing loopholes for newer products.
These rules work. By cutting off easy delivery methods and tightening registration, the U.S. disrupted trafficking networks and reduced tax evasion.
Canada’s lack of similar postal bans leaves a gaping hole that illegal sellers can still mail products anonymously, evading detection.
How do we reduce illegal sales in Canada?
First, Canada must mirror the U.S. postal rule by banning Canada Post from shipping tobacco and vaping products, and add nicotine pouches to the ban. We have seen a massive spike in online stores offering illegal nicotine pouches, which are only available for sale in pharmacies and restricted to menthol, mint, and unflavoured. Health Canada has only approved Zonnic nicotine pouches for sale across the country, all other brands are sold illegally.
This postal rule would force sellers to use traceable, private shippers that verify buyers ages, which is a critical step to keep products away from youth.
Second, require all tobacco retailers, including online sellers, to register with federal and provincial tax agencies. Regular reporting would help authorities track sales and spot tax dodgers.
Third, expand the Criminal Code to explicitly include vaping devices and nicotine pouches, ensuring laws keep pace with industry trends.
Critics might argue stricter rules hurt small businesses or indigenous economies. But public health and shutting down organized crime must come first.
The government could work with indigenous leaders to create regulated, tax-compliant tobacco markets that respect treaty rights while choking off criminal profits.
Yes, Canada’s enforcement issues are complex. But the PACT Act shows that smarter laws make enforcement easier. By banning postal sales, authorities can reduce the volume of illegal products.
Registration requirements help target inspections and audits, focusing limited resources on high-risk sellers. The U.S. also ties federal funding to states enforcement efforts, a model Canada could replicate by linking provincial health transfers to tobacco enforcement outcomes.
Public awareness matters, too.
Many Canadians don’t realize buying cheap, untaxed cigarettes, vaping products, and nicotine pouches supports gangs. National campaigns could mirror anti-drug messaging, highlighting the links between contraband and community harm.
Canada’s contraband tobacco crisis won’t fix itself. Half-hearted enforcement and outdated laws have let the problem go on for decades.
Adopting PACT Act-style reforms, such as postal bans, stricter registration, and modernized regulations, would strike at the heart of the black market. It’s a matter of health, safety, and fairness. Legitimate businesses shouldn’t compete with criminals, and families deserve protection from the violence and addiction fueled by illegal tobacco.
The federal government must act. By learning from the U.S. approach and tailoring it to Canada’s needs, we can stamp out contraband, recover billions in taxes, and save lives.
Enough talk. It’s time to deliver.
