Independent Convenience Store Owners Losing Ground in Ontario

TORONTO, Feb. 29, 2016 /CNW/ - Members of the Ontario Korean Businessmen's Association (OKBA) are very disappointed in the Wynne government's decision to increase tobacco taxes in this year's budget.

"Our organization represents over 1500 independent small business owners who are located in communities across Ontario," says Don Cha, General Manager of the OKBA. "The government's decision to raise tobacco taxes, when contraband tobacco continues to be readily available throughout Ontario, will only make things worse for our members."

Finance Minister Charles Sousa unveiled the government's budget in the legislature last Thursday afternoon and amongst the tax increases was an immediate increase in provincial tobacco taxes of $3 a carton. The OKBA and their members cannot understand this sudden increase, the second in less than 2 years, when anti-contraband efforts have yet to impact the ongoing prolific trade of illicit product.

200 contraband cigarettes, equivalent to a carton, can be easily purchased for as little as $12. Legal and regulated tobacco, sold by OKBA retailers, sells for as much as $100 a carton.  Adding an additional $3.00 in provincial tobacco taxes overnight will only drive more consumers to the black market. When consumers source their products from illegal sources, independent business owners like OKBA members lose more foot traffic and see an immediate reduction in revenue.

The OKBA was hopeful, given this government's recent announcements to combat contraband, that the volumes of illicit tobacco could be reduced before any additional taxes on legal products were introduced. In January of last year the government introduced a raw leaf tobacco oversight system to better track the supply chain for all tobacco manufacturing. In addition, a new OPP anti-contraband task force was finally launched after a commitment in last year's budget. Both of these initiatives are welcomed yet they have not had time to impact the trade of illicit tobacco across the province. At recent budget consultations the OKBA strongly endorsed MPP Todd Smith's private member's bill 139 – Smoke Free Schools Act. In amongst the changes proposed in the bill are increased fines for those that sell contraband tobacco.

"Since 2009, more than 500 of our member stores have closed and gone out of business", adds Cha. "Every time government introduces additional taxes on regulated tobacco our members suffer. Ironically, the only ones that benefit are the criminals that traffic contraband tobacco. How many more stores have to close before the government takes notice?" 

ABOUT THE OKBA

Formed in 1972, the Ontario Korean Businessmen's Association (OKBA) represents more than 1500 independent convenience store operators throughout the province.

SOURCE Ontario Korean Businessmen's Association

or to arrange an interview, please contact: Mr. Don Cha, OKBA General Manager - [email protected]