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What if Cigarette Purchases Were Banned in Canada?

ciggaretes in the ashtray

Konrad Bongard, freelance columnist for Pardon Applications of Canada, explores a recent proposal by the British Medical Association to ban cigarette purchases to anyone born after 2000, and suggests that a similar enactment in Canada could be a step back in the war against smoking.

In late June, the British Medical Association voted to enact a permanent ban on the purchase of cigarettes to anyone born after the year 2000. Partly motivated by the rise in smoking rates in the 18-24 age cohort in the UK, the debate has quickly polarized the British punditry and population alike.

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So widely publicized has the BMA’s proposal been that it’s even started to gain traction in Canada. In the Globe & Mail, columnist and London resident Leah McLaren wrote a piece on July 3 in defense of the adoption of the cigarette retail ban in Canada.

However, McLaren’s argument — essentially, that banning cigarettes would help denormalize them and, thus, reduce smoking — ignores a number of crucial factors unique to the Canadian landscape.

For starters, Canada’s contraband cigarette trade is far larger than the UK’s. It is estimated that the UK loses $3.2b USD in tax revenue a year due to the sale of contraband cigarettes. By contrast, in Ontario (a province with a population one-fifth of the United Kingdom’s) that figure is estimated to be between $1.1b-$2b CAD annually.

In other words, if we assume Ontario loses half as much in tax revenues per year as the United Kingdom ($1.6b USD), this amounts to almost a 2.5x per capita rate of contraband cigarette consumption per capita.

Due to the relative availability of contraband cigarettes in Ontario, the prices of legal as opposed to contraband cigarettes have proven relatively elastic. After significant hikes to tobacco taxes starting in 2001, the contraband market began to grow, reaching all-time highs in 2009 — in spite of the fact that cigarettes were still markedly cheaper than in the UK, where the contraband market remained comparatively small.

In 2011, the Ontario government sought to have its cake and eat it too — pledging to use police enforcement to crack down on contraband cigarette sales by passing Bill-186 — while refusing to renege on its agenda of increasing taxes. So assured was the government that its plan would be successful that it actually forecast an increase in revenue from cigarette taxes in the ensuing years. This did not happen, and now the Ontario government is back at it again.  Premier Wynne’s new budget promises to raise tobacco taxes, but without a sufficient explanation of how her government intends to curtail the increase in black market sales which is likely to occur as a result.

“So assured was the government that its plan would be successful that it actually forecast an increase in revenue from cigarette taxes in the ensuing years.”

The proliferation of contraband cigarettes, aside from being a loss to tax revenues, has a number of unseemly implications. Due to their widespread availability, age laws on smoking have become increasingly difficult to enforce, and contraband cigarettes are readily available in high schools in Ontario. They are also arguably more damaging than normal retail cigarettes, and studies of contraband cigarettes have found they contain materials such as asbestos, dead flies, and human excrement. The revenues from them are also used to finance illegal organizations, such as drug rings or terrorist groups.

The Ontario government has already overplayed its hand when it comes to tobacco taxes.  It should admit defeat and either lower them or impose a long-term pricing freeze to combat contraband sales. And suffice it to say, if raising taxes causes contraband sales to rise, implementing a ban such as the one proposed by the British Medical Association would likely lead to a catastrophe of unmitigated proportions:  smoking is, one should remember, an addictive substance. Even youth who would never have been able to buy cigarettes legally would still have access to them, and — in the absence of a legal more convenient, legal alternative — could expend a large amount of money overtime in dangerous, contraband purchases.

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This does not mean that the government has no recourse in the war against smoking.

Heath Canada could demand that the nicotine in cigarettes be reduced to subcompensable, subaddictive levels (in fact, denicotinized cigarettes have been available since the nineteenth century); a strategy that would likely great reduce the net consumption of cigarettes over time.  (The success of e-cigarettes attests to the willingness of smokers to embrace forms of replacement therapy). It could also expel American companies such as Philip Morris from the country and nationalize the tobacco industry, thereby ensuring that Canadian taxpayers were fully the beneficiaries of cigarettes sold en route to the gradualist goal of eliminating smoking, instead of foreign shareholders.

While the merits of either of these approaches are debatable — and the second may be unfeasible due to free trade regulation which exists — either is a better idea than illegalizing cigarettes altogether for a large cross-section of the population, thereby handing their business over smugglers.

Recently, Justin Trudeau adopted the position that prohibition against marijuana has been a failure, and vowed to legalize it — a stance which highlights the failures of our drug laws. This was a step forward for our political discourse.

The adoption of a prohibition against cigarette purchases, such as the one proposed in the UK, would be a step back.

Konrad Bongard is a freelance columnist for Pardon Applications of Canada, the nationwide processing firm for Canadian Pardon (Record Suspension) & U.S. Entry Waiver applications.  The opinions expressed are that of the author and do not necessarily reflect those of Pardon Applications of Canada.  For a list of statistical references used in this article, or more information on Pardon Applications of Canada, call 866-383-9744 or email info@pardonapplications.com