:
Thank you very much, Mr. Chair.
My name is Manuel Arango, and I'm the director of health policy at the Heart and Stroke Foundation.
The foundation has met with many members of this committee recently to discuss how we can improve the regulatory environment for charitable lotteries through the elimination of red tape, something that could save charities millions of dollars per year. This objective is also supported by many other organizations, including the Cancer Society, which of course is represented here today.
[Translation]
Today, I have the pleasure of discussing Bill with you.
[English]
First, some information about the Heart and Stroke Foundation. Our mission is to prevent disease, save lives, and promote recovery. We are a volunteer-based health charity, drawing upon the support of 140,000 volunteers across the country. We strive to improve the health of every Canadian family, every day.
Tobacco use is a key risk factor for heart disease and stroke, increasing the incidence of all major forms of heart disease and stroke. Of the premature deaths caused by smoking-related disease in Canada, heart disease and stroke accounted for almost one-third of these deaths, or almost 11,000 deaths. As such, for the foundation, it is crucial that as a society we do our utmost to reduce tobacco use.
Over the years, the foundation has worked with its partners to advance a variety of tobacco control measures across the country at the federal, provincial, and municipal levels. We support Bill because eliminating contraband tobacco, which is a source of cheap tobacco, is critical given the role that price plays in tobacco consumption. We believe that Bill , within the framework of a comprehensive tobacco control strategy, will help to reduce smoking consumption in Canada, especially among our youth.
Let me be clear, in Canada today the principal cause of contraband tobacco smuggling is criminality and geographic hubs, not tobacco taxes. We know this because we do not have any significant tobacco contraband in those jurisdictions in Canada where tobacco taxes are high. ln fact, it is the jurisdictions with the lowest taxes—for example, Ontario and Quebec— where we see the highest rates of contraband, so clearly other factors are at play.
The reality is that tobacco taxes are the most effective tool we have to combat the harm caused by tobacco. A large proportion of the reduction in smoking consumption over recent years can be attributed to our tobacco tax policies. ln fact, reducing tobacco taxes would lead directly to increased smoking, death, and disease. Vulnerable populations such as our youth are especially sensitive to tobacco taxes. Preventing smoking among our youth—Canada's future—is important given that once a teenager begins smoking, they typically continue this consumption pattern for at least 20 years. For this reason, nipping the tobacco habit in the bud among youth is critical and tobacco taxes have an important role to play in this regard.
As I mentioned earlier, geographic hubs also play a role in contraband tobacco. An example of the impact of geographic factors is well illustrated through the case of the border post in Cornwall, where simply moving the border post from the middle of Cornwall Island to the foot of the bridge in Cornwall in 2009 made a dramatic difference in tobacco contraband smuggling rates.
Mr. Chair, a number of measures are needed to address tobacco contraband and tobacco consumption in Canada. Deterrence via increased penalties to stop tobacco contraband smuggling is very clearly one of these measures. For this reason the Heart and Stroke Foundation of Canada supports Bill . This bill is clearly a means, within the context of a comprehensive tobacco control strategy, to combat tobacco contraband and tobacco consumption in Canada.
Thank you very much.
:
Thank you, Mr. Chair, and all the members of the committee for granting me this privilege to offer a few of my own comments on the importance of Bill .
First of all, l would like to say that the Non-Smokers' Rights Association is a national non-profit health organization working for more than 35 years in the development and promotion of effective tobacco control policies, including tobacco taxation, to reduce the death and diseases related to tobacco use.
On the issue at hand, as Manny mentioned, it is important to understand that tobacco taxation is the most valuable policy we have at our disposable to reduce tobacco use, especially amongst kids. That is why efforts such as Bill are always welcome. They provide more powers to the authorities to contribute further to the decline of the tobacco contraband market.
l was quite surprised to learn recently that only RCMP officers have the authority to make arrests of suspected tobacco smugglers. Although the Quebec Tobacco Tax Act does grant some powers to provincial and municipal police officers to immobilize motor vehicles suspected of carrying contraband, and request a warrant to search them, they cannot make any arrest. It is up to the Quebec revenue department to lay any charges. l believe Ontario provincial and municipal police officers don't even have such authority to enforce their own Tobacco Tax Act.
This will all change with the passage of Bill , because contraband trafficking will finally be recognized as a criminal activity.
Another key issue is the fact that many traffickers arrested by the RCMP and found guilty of tobacco smuggling don't even pay their fines. They just go back to the illicit trade. That raises serious concerns about the deterrent effect of existing sanctions.
By adding jail time, Bill makes contraband tobacco a more serious offence, as it should be, considering the threat it poses to public health. However, the next challenge will be to convince the provincial and municipal police officers to take full advantage of these new powers under Bill , which is under the Criminal Code. Maybe the next step would be to imitate Quebec and create dedicated teams of investigators focusing uniquely on the fight against the illicit tobacco trade.
Thank you.
My name is Rob Cunningham, lawyer and senior policy analyst with the Canadian Cancer Society.
[Translation]
Thank you for the opportunity to testify before you today.
[English]
We support . We urge all parties to support adoption of the bill as soon as possible.
At the outset, let me emphasize the crucial role that higher tobacco taxes play in reducing tobacco use, especially among youth who have less income. There's a vast body of evidence that confirms the obvious: as prices go up, tobacco consumption goes down. Through the clerk, we've provided to the committee for its review extensive studies, reports, and other evidence to this effect, including a 2001 evidentiary compilation—I am showing you the first volume here—as well as a 2011 evidentiary review.
Contraband undermines the public health and public revenue benefits of higher tobacco taxes. Contraband may provide direct access to lower-priced product and may be a concern impeding governments from increasing tobacco taxes.
The cause of contraband as we have it in Canada today is not high tobacco tax rates, but rather proximity to the source of supply: the illegal factories on a handful of territories in or near Ontario and Quebec. This is key to the problem.
In the white binder that has been distributed to you, you will see in tab 1 a tax map, and you can see the comparative tobacco tax rates for provinces and territories in Canada. In western Canada, tobacco taxes are far higher than in Ontario and Quebec, but in Ontario and Quebec, contraband is far higher than in the west. This demonstrates that the cause of contraband in Canada today is not higher tobacco taxes but proximity to illegal sources of supply, as we see in Ontario and Quebec. We can have high tobacco taxes with low contraband, as has been sustained in western Canada.
The tobacco industry acknowledges that contraband has decreased substantially. I invite you to turn to tab 2 in the binder. In a presentation from British American Tobacco, they indicate that there was an increase in contraband through to 2008—33%—but by 2010, it declined to 19%. There are further indications of decline since then. If you turn to the next page, you will see that Philip Morris has some data through to 2011, with very significant declines in contraband.
Bill will be beneficial to efforts to combat contraband. The bill is reasonable and justifiable.
Bill is in fact necessary and essential as a mechanism to help drive contraband volumes down further and to do so on a sustained basis. It will provide a prosecutorial option for stronger penalties. Right now, fines are too often simply treated as a cost of doing business, and fines that are imposed are far too frequently ignored and never paid. There needs to be an adequate deterrent available, and Bill will provide a new optional mechanism. The penalties in existing excise legislation are not doing the job. The bill will also provide new authority to provincial and municipal police officers.
There are 37,000 Canadians who die each year because of the tobacco epidemic, 47 times the total number of homicides, which in 2011 was 598. By reducing contraband and sustaining further tobacco tax increases, lives will be saved and fewer kids will be addicted.
We must recognize that contraband is, in part, an aboriginal health issue. One study found that smoking prevalence among on-reserve first nations was a shocking 59%, compared to the Canadian average, which is now 16%. Illegal factories and other contraband sources provide aboriginal kids and adults with direct access to cheap cigarettes with no taxes paid.
Contraband must be tackled. At the same time, we must not allow the tobacco industry and the associations they fund to use contraband as a public relations tactic to oppose other much-needed tobacco control measures.
Beyond Bill , further federal action measures on tobacco contraband should be implemented.
First, while the RCMP has done considerable good work, we believe that the RCMP should pay more attention to blocking the supply of raw materials, such as leaf tobacco, cigarette paper, and cigarette filters, intended for illegal reserves. We urge the RCMP to gather intelligence and then intercept, off reserve, these shipments that are illegally aiding and abetting the unlicensed factories. This is key in terms of an effective strategy to deal with illegal factories located in Canada.
Second, there is no doubt that relocating the Cornwall border post in 2009 to the bottom of the bridge in Cornwall reduced contraband. It became a choke point for previous smuggling routes from the U.S. side of Akwesasne. The government now intends to move the border post to Massena, New York. We suggest a modification. Instead of simply moving, a better approach would be a two-part border post, with the primary checkpoint in Massena and a secondary checkpoint at the current location in Cornwall. This is similar to arriving in Canada after an international flight, when in the airport there is a two-part check system.
Third, the federal government needs to persuade the U.S. government to shut down the illegal factories on the U.S. side of Akwesasne.
Fourth, the Canadian Cancer Society recommends that Canada sign the Protocol to Eliminate Illicit Trade in Tobacco, an international agreement under the WHO Framework Convention on Tobacco Control.
We need a comprehensive strategy to combat contraband, and we need a comprehensive strategy to reduce tobacco use.
In closing, we reiterate our support for the bill. We look forward to your questions.
Merci.
I would like to thank the three witnesses for being here this morning to help us as we consider Bill .
I appreciate that all three of you support this bill. In fact, I would be surprised if you didn't. I am convinced that Bill is not an end in itself for you and your organizations.
[English]
It's not an end to the problem of combatting tobacco use because it's more the name of the game of your associations, I'm pretty sure.
[Translation]
The headline this morning on my local newspaper, Le Droit, read “Illegal Cigarette Butts by the Ton”. The Canadian Convenience Stores Association commissioned a study, and tons of cigarette butts were collected at the Rideau Carleton Raceway. They found that 46.6% were from contraband cigarettes. That shows us just how much of a concern it is.
We have heard from a number of witnesses, and I still don't know how we can solve this problem, strictly from the perspective of contraband. Some people say that if we raise taxes, there would automatically be more contraband. Should we lower taxes to ensure that there is no contraband? But then cigarette use would increase.
Mr. Cunningham, I am pleased that you made other suggestions to indicate that Bill is not an end in itself. Some witnesses told us that there was less contraband. I would like to hear what you have to say about that. This aspect is important and needs to be studied. When we analyze the methods that the current and previous governments have used, it would help us determine whether Bill is fine in itself.
My question is for all three of you. Do you agree that there is less contraband, or do you think there is more? Please give us your thoughts.
[English]
I'll start with Monsieur Damphousse.
:
I started working in tobacco control in 1993, right smack in the smuggling crisis. It wasn't all the provinces that rolled back their taxes. Quebec was the first and it had a domino effect—New Brunswick, Ontario, and a few other provinces in the Maritimes. The other provinces maintained their level of taxation. The federal government lowered their tax, but it was not across the board.
Tobacco taxation was so effective that the tobacco industry was panicking. They recognized in their annual reports that they were losing a lot of their sales because of that. The policy that was brought forward was a suggestion by the health community. If you want to generate revenue, you might as well generate revenue with a product that's killing people and stop some of them from picking up tobacco.
At one point, the tobacco industry realized that, even as they were making the argument that they were losing sales, the policy was working. At one point, they engaged in a public relations campaign across the board. They invested millions. They said that tobacco taxation did not work, while illegally supplying the contraband networks, especially through Akwesasne. All of those operations were done by the tobacco industry.
Unfortunately, the pressure became so intense in the 1990s that the government thought the best way to get out of the problem was to lower tobacco taxes. At the same time, though, they came up with the Tobacco Demand Reduction Strategy. It was only later, through litigation in the United States and the uncovering of internal documents from the industry, that we uncovered a whole conspiracy on their part, in which they admitted to supplying the contraband market. The tobacco industry was sued by the States, and the industry was found liable. In 2008, you had Imperial Tobacco and then Rothmans, Benson and Hedges. After that, you had JTI-Macdonald in 2010. It was a record fine that they had to pay—$1.7 billion or $1.8 billion—an amount never before seen in this country.
:
Ladies and gentlemen, we're going to call this meeting back to order. We are continuing to deal with Bill .
If our panellists would join us, that would be great.
Just before we introduce the second panel, our clause-by-clause will be on Thursday morning. We're going to start at the regular time of 8:45 regardless of the House schedule, unless we're adjourned. The meeting is in Centre Block, so remember that, 8:45 a.m.
So far, committee members, you should know that three amendments have been submitted, two from an independent and one from the New Democratic Party. The timeframe is coming to a close for any independents, but of course, based on any input we get today, we'll still accept amendments from the parties at the table.
With that, for the last hour on this we have from the Ontario Campaign for Action on Tobacco, Mr. Perley; and from the Ontario Provincial Police, Chief Superintendent Gary Couture, Regional Commander, East Region Headquarters.
Gentlemen, thank you for joining us, and Mr. Perley, the floor is yours.
:
Thank you, Mr. Chairman, and members of the committee, for this opportunity.
On behalf of the Heart and Stroke Foundation's Ontario office, the Ontario division of the Canadian Cancer Society, the Ontario Medical Association, and the Non-Smokers' Rights Association in Ontario, I'd like to offer some comments on Bill . I'm Michael Perley, and I'm the director of the Ontario Campaign for Action on Tobacco. The agencies I mentioned have been working together since 1993 on tobacco control issues.
The Ontario campaign strongly supports Bill . On the earlier panel, Rob Cunningham, François, and Manuel Arango gave you a detailed analysis of why the bill is so important, and I'd just like to add some additional perspective and perhaps answer some questions later about the Ontario situation.
Today, the total Canadian tobacco market is about 40 billion sticks annually. The most serious phase of the current contraband problem occurred in 2007-08 when major tobacco companies estimated that between 32.7% of the market, British American Tobacco's estimate, and 35%, Philip Morris International's estimate, was contraband. Three years later, British American estimated the illegal market had fallen to 18.75% of the total market, and Philip Morris estimated that contraband had fallen to 20% of the total market. The reasons for this decline can be found in the aggressive actions of the federal, Quebec, and Ontario governments and their law enforcement agencies in attacking the contraband problem.
Today, I think as François mentioned earlier, the Quebec finance ministry estimates that contraband makes up 15% of its total market in Quebec. We do not have a similar reliable estimate for Ontario's market, although it appears to be somewhat higher. Thus, overall, the problem persists, but we are making progress. I would like to underline that because I think, as some comments have indicated, the tobacco industry and its retail allies put forward a somewhat different picture of the state of the contraband problem.
The authority Bill gives to all Ontario municipal and provincial police officers has an importance beyond the purely additional enforcement capacity it provides. Criminalization of contraband tobacco trafficking will send an important deterrence message to those who transport and supply large volumes of contraband off reserve that they can no longer expect to simply pay fines—or not pay fines as Mr. Cunningham underlined—as a form of a business licence to deal in contraband. Equally important, the bill will send a message to police themselves that contraband is now deemed to be criminal activity by the federal government and should be treated as such.
Bill also provides an important opportunity for public education when it is implemented with the message, of course, that trading in contraband is now a more serious offence with jail time at the end of the road.
Another argument in favour of quick passage of Bill is that the implementation of regulations governing the proposed Ontario provincial raw leaf tobacco management system has been delayed, and this was referred to earlier as well. I can speak to it in more detail during questions. These regulations, which will require marking and tracking of all raw leaf shipments in the province were originally to come into force this past September, then were put back until January 2014, and now have been delayed again, this time until January 2015. Over 60 million pounds of tobacco will be grown in Ontario this year, and some of it is bound to make its way into the contraband manufacturing system. The need for the sanctions in Bill C-10 assumes additional urgency in this context.
One final issue that does not bear directly on Bill , but which has been mentioned previously, is the move of the eastern Ontario U.S.-Canada border post from Cornwall to Massena, New York, and the impact this move may have on contraband supply. I have with me a coloured map, but I'm unable to distribute it because unfortunately it's not in two languages, and I haven't been able to find a bilingual version of it. But perhaps I can show it a little later during questions because it's a little easier to understand the importance of this border post issue when you see where it's located. Let me perhaps just show you briefly.
This red section here is Cornwall Island in the middle of the St. Lawrence River. This is on the New York side of the river where the new border post is going to be, and this is where the current border post is in Cornwall.
If the border post is moved here, this leaves Cornwall Island basically unsupervised. What that does is create the potential—I underline that word—for Cornwall Island to become a contraband trafficking zone again, somewhat similar to the way it was a few years ago. If there is no Canadian inspection facility beyond the proposed U.S.-side post, Cornwall Island may again become a focal point for contraband trafficking. A two-part inspection system, as Mr. Cunningham mentioned, would avoid this potential problem in the first place.
In closing, while we don't often agree with the groups representing the tobacco industry and retailers, I would like to mention a comment made by the head of the Ontario Convenience Stores Association at a news conference in Toronto yesterday. He pointed out that the contraband problem “is not driven by taxes, but is driven by cheapness and delivery”.
We agree. We believe effective implementation of Bill will strike an important blow against both the low prices and the extensive supply lines of the contraband market in Ontario.
Thank you very much.
:
Good morning, Mr. Chair and members of the committee.
I will give my presentation today in English, but I will be pleased to answer your questions in English or French.
[English]
It is my pleasure to appear before you today on behalf of OPP Commissioner Chris Lewis, who sends his regrets.
The Ontario Provincial Police sincerely thanks you for the opportunity to appear before you and to provide you with the information about how the Ontario Provincial Police contributes to the efforts to control the manufacturing, distribution, and sale of contraband tobacco. Contraband tobacco is closely linked to smuggling and organized crime. Since these activities cross many jurisdictions, the fight against contraband tobacco, smuggling, and organized crime requires effective partnerships on the part of police services and all agencies.
In 1996, the RCMP, OPP, and Revenue Canada, now known as the Canada Revenue Agency, partnered to fight these types of crimes by forming the Cornwall Regional Task Force. A significant amount of contraband tobacco smuggling was taking place on the St. Lawrence River near Cornwall and through the Akwesasne first nation. There was a period of a few years after 2000 when taxes on cigarettes were equalized on both sides of the border, and smuggling activities were considerably reduced. However, the problem quickly resurfaced when tax breaks ended within Canada.
By 2009, growing concerns about these activities motivated enforcement agencies to meet, discuss public safety concerns, and establish best practices for countering contraband tobacco and related criminal activity.
In 2010, we re-established our policing partnership within the Cornwall Regional Task Force team, which now consists of officers from the RCMP, OPP, Cornwall Community Police Service, the Ontario Ministry of Revenue, and Canada Border Services Agency. Public Prosecution Service of Canada and provincial prosecutions have also been integral parts of agency partnerships. The Cornwall Regional Task Force is a proven, effective joint-forces operation contributing to public safety.
From 2008 to 2012, 36.2% of all confiscated cartons of contraband tobacco nationwide were seized in Cornwall. During the same period, 28.7% of all confiscated loose fine-cut tobacco nationwide was seized in Cornwall. Current provincial legislation, the Ontario Tobacco Tax Act, authorizes a police officer to directly seize illegal, unmarked, fine-cut tobacco and unmarked cigarettes that are found within the course of his or her duty, in plain view, and lay appropriate charges, often done in partnership with the Ministry of Finance staff. These legal authorities support and enhance our front-line ability to effectively respond to contraband tobacco issues within the course of our duties.
New, more severe, fine levels for possessing illegal cigarettes in Ontario were also introduced with new legislation in 2011. The current fine levels for possessing illegal cigarettes in Ontario are: $100 plus three times the tax for possessing up to 200 illegal cigarettes; $250 plus three times the tax for possessing between 201 and 1,000 illegal cigarettes; and $500 plus three times the tax for possessing between 1,001 and 10,000 illegal cigarettes.
From 2010 to the present, Ontario Provincial Police highway enforcement teams have laid 286 charges for possession of contraband cigarettes under subsection 29(1) of the Ontario Tobacco Tax Act. Over the course of this same period, Ontario Provincial Police highway enforcement teams have confiscated more than 100,000 cartons of contraband cigarettes.
The OPP recognizes that smuggling is linked with organized crime groups and activities, and poses a serious threat to the safety and well-being of all Ontario citizens and visitors. Applying the principles of tactical priority setting, the OPP aligns its limited resources to proactively address important criminal activity.
Much of the enforcement responsibility has been assumed by front-line uniform officers, complemented by the dedicated operational teams previously mentioned. Through highly specialized multi-jurisdictional and joint forces capability, the OPP provides specialized support to border agencies in both Canada and the U.S.A., including the border enforcement security teams, known as BEST, led by the United States Department of Homeland Security, Immigration and Customs Enforcement Agency, or ICE.
The OPP also provides resources to support the RCMP-led integrated border enforcement teams, the integrated national security enforcement teams, the marine security enforcement teams, and other joint force operations, to safeguard against cross-border organized crime and terrorism.
The Ontario Provincial Police believes border security demands a concerted, rigorous, and coordinated approach to be successful. Municipal and provincial police services have a role to play in maintaining border security, as they respond daily to incidents at border crossings.
As the price of contraband tobacco has soared, increasing the criminal profits for those involved in its smuggling and distribution, we have seen public safety concerns also increase. Smugglers have taken to using private property, such as docks and waterfront homes, to smuggle contraband tobacco—to break the law. Smugglers have been known to act aggressively with anyone who tries to stop or challenge them. They also use high-powered boats at night, at great speeds and without running lights, creating a navigational hazard.
Of course, problems with contraband tobacco are not limited to smuggling in the Cornwall area. In addition to the Cornwall area within our east region, the area of Ontario where OPP highway enforcement teams have laid the most charges relating to contraband tobacco has been the southwestern part of the province. The contraband cigarettes confiscated in many of these stops were worth tens of thousands of dollars.
In several cases, the contraband cigarettes were manufactured within the Six Nations of the Grand River community south of Hamilton, the vehicles being registered to businesses located in this first nations community. Southwestern Ontario has also seen the phenomenon of smoke shacks progressively develop in recent years, mostly on the Highway 6 corridor, which borders the Six Nations community.
Properly taxed cigarettes that are legal to sell in Ontario have a yellow band that clearly shows: Ontario, Canada, Duty Paid, Droit Acquitté. In Ontario, some on-reserve retailers are authorized to purchase limited quantities of cigarette packages to be sold only within their first nations communities and to first nations consumers, as defined under the federal Indian Act, for their exclusive use.
However, it is clear that these smoke shacks on Highway 6 and elsewhere in the province are strategically located so that non-natives can purchase untaxed cigarettes, which is an illegal act. The sale of tobacco from smoke shops is a multi-agency issue and not one that the OPP alone can address. The OPP does not enforce federal tobacco legislation and provincial tax laws, but we do work in cooperation with the agencies responsible. When enforcement action is taken by the federal ministry of revenue, the OPP provides support to ensure public and traffic safety.
While anyone can smuggle or sell contraband cigarettes, the activity in Ontario is often tied to residents of various first nations communities. This can complicate enforcement, as the issues can be compounded with claims related to treaty rights and traditional native practices.
Contraband tobacco is a complex issue. I have only touched on a few aspects of the problem, as well as the responsive and proactive efforts of the Ontario Provincial Police. The OPP enforces laws. We don't make them. We do support any legislative changes that can be shown to reduce and deter the smuggling, distribution, and sale of contraband tobacco.
The Ontario Provincial Police appreciates the opportunity you have provided us today as you consider this bill.
Thank you very much. I would be happy to answer any questions.
Merci.
:
Following the changeover from a quota system to a licensed system a few years ago, when the federal government spent about $300 million buying out the quota, and then farmers were able to pick up licences, provided they had contracts with companies, the crop size has more than doubled. We have a huge amount of tobacco circulating around the province, transported here and there and so on, but we have not had a means of actually registering and tracking, by markings, actual shipments as to where they start and where they end up.
The problem with that is, with this great increase in the crop size we've had some expression of concern about the fact that some of the crop is being diverted. We would have had a problem anyway, and there were some anecdotal reports in the Ontario media from law enforcement officers prior to this delay of the regulations and prior to the passage of Bill 186, which created the regulations for the marking system.
There was one story about a farmer who alleged that somebody had stolen it out of his barn, and it turned out, in fact, that he'd sold it to a contraband manufacturer.
There's not been a huge amount, but you don't need a lot to supply a number of smaller contraband manufacturers. So it's not a huge percentage, but it's some.
The reason for the delay, as far as we can tell, is that there are negotiations going on with two bands in particular to set up some form of what I'll just call a tobacco control bylaw on the two reserves whereby the band would take more responsibility for controlling its tobacco manufacturing and sales activities. We certainly don't oppose those kinds of efforts at all.
Fundamentally the problem is that selling tobacco is of benefit to first nations because of the huge price differential between contraband and regular product. If we're looking at changing the way tobacco is dealt with on reserve, how are we going to do that in a way that maintains an economic benefit for the first nations, while controlling the huge levels of smoking prevalence that Mr. Cunningham referred to, and at the same time reducing contraband without eliminating the price differential and therefore the benefit to first nations of making tobacco in the first place?
So there is a fundamental inherent conflict between the idea of trying to give first nations more control over their tobacco manufacturing activities and the ideas that we have in public health about controlling tobacco use, along with this issue of contraband. I don't know how we get to a point where reserves are able to manage their own tobacco supply and derive some economic benefit while at the same time we maintain the price differential between regular product and on-reserve manufactured product without continuing to promote a contraband market. That's the difficulty.
Reserves may have more of a hand in how they do business directly—that's fine, and nobody has a problem with that—but at the end of the day we, as health agencies, want to reduce tobacco use. We don't want to create a system that makes it easier to make and sell more product and give more profit to one group as opposed to another. I don't think that serves public health in any way.