Contraband Tobacco Gamechanger: Alberta Budget 2025
Contraband costs us all. That’s what the Convenience Industry Council of Canada (CICC) has been saying for years.
The massive ongoing proliferation of illegal tobacco clearly hits our retailers hard, but lower legal sales and less foot traffic is also hitting government revenues hard. And although some would like to suggest that it is reduced consumption rates that are the reason behind declining sales, that’s not true. The reality is that consumers have shifted to the booming black market in Canada because smokers can access illegal tobacco products for as much as 40% of the cost of legal tobacco.
CICC has commissioned three separate studies on the contraband tobacco market in Canada in recent years. The conclusions are clear: organized crime from coast to coast, town to town are reaping billions of dollars that fuel their more nefarious activities.
Finally, the Alberta government has heard our concerns and recently announced a series of sweeping measures to tackle the illegal market. CICC has been working closely with officials and ministers in Alberta to identify and measure the problem, make concrete, specific recommendations and to urge inter-governmental collaboration and leadership on contraband tobacco.
Alberta’s 2025 Budget delivered on all fronts: strengthened enforcement, new administrative penalties, improved coordination and to push the federal government to do more. These new commitments send a message to traffickers that the government is getting serious about the illegal market and new, tougher, enforceable penalties are waiting for you in Alberta.
The provincial government also recognized that this is a national problem that will require each province and the feds to act in unison to crack down on this black market. At a time when trade barriers compromise commerce between provinces, the illegal tobacco market is trades seamlessly across the country.
The days of wild west of contraband tobacco in Alberta are numbered. CICC will continue to work with other provinces to adopt similar frameworks, build provincial consensus and pressure the federal government into action. Increasingly, our industry is no longer alone calling for changes and making the connections to organized crime and public safety.
Scarcely a week goes by without some news of a large illegal tobacco bust in Canada. In almost every single case, these offences also include hard drugs, cash and guns. In fact, after recent bust in BC worth $1.7 million, Todd Preston, superintendent in charge of West Shore RCMP said, “The illicit tobacco trade often utilizes the same drug pipelines that are set up by organized crime groups therefore contributing to the growth of organized crime. I commend the efforts of our Drugs and Organized Crime Unit in taking a multifaceted approach to targeting organized crime in the West Shore.”
The RCMP news release went on to say, “The sale of illicit tobacco helps to fund organized crime groups while also affecting the economic integrity of Canadians through lost tax revenue that would otherwise go toward supporting many government funded initiatives.”
Although this issue has been growing and hurting our industry for years, we are now at a tipping point and change is starting to happen. We are proud of the work we have done with the Alberta government and will continue to push other provinces to follow suit. Let’s hope this momentum continues and we can start to turn the tide on contraband tobacco.
Contraband tobacco costs us all.
