Ontario Government Losing $2M Daily to Black Market Tobacco - It's Time to Stop the Losses

Ontario Consumers Return to Legal Cigarette Channels When Illegal Products Unavailable

ETOBICOKE, ON, Sept. 16, 2020 /CNW/ - Ontario's independent convenience store operators have a clear message for Finance Minister Rod Phillips and Premier Doug Ford, with respect to the upcoming fall budget - invest more in enforcement against unregulated tobacco and stop losing millions of dollars of much needed tax revenue every day to organized crime groups.

Like all businesses, convenience stores have been negatively impacted by changes in consumer habits due to COVID-19. Store operators were pleased to be recognized as an essential service and allowed to remain open during the lockdown mandated earlier this year. Licensed tobacco retailers have unexpectedly benefitted from one aspect of the lockdown - the return of many customers who were previously buying unregulated and untaxed tobacco from illegal sources. Through purchasing regulated and fully taxed tobacco, government anti-smoking initiatives of high taxation and plain packaging were enforced. As convenience store owners saw an increase in legal sales, government has also benefitted from increases in tobacco tax revenue. Unfortunately, once the initial lockdown eased, black market supplies returned, and legal channel sales declined. Based on repeated studies it is estimated that close to 40% of all tobacco consumed in Ontario is sourced from unregulated and untaxed manufacturing facilities.  As a result, Ontario's treasury loses more than $750M in tobacco tax revenue every year.

"When the lockdown happened some of our operators saw their legal tobacco sales increase as much as 50%. Some customers told us that they couldn't get access to their regular black-market supply, so they had to come back to the legal channel.", said King Street West store owner Kenny Shim. "Government had to have seen a massive spike in tobacco tax revenue. Surely, given the economic hardship Ontario is facing, we believe government should be doing everything possible to recoup that extra tax revenue" added Shim.

Over the summer months the OPP initiated "Project CAIRNES" and made several high-profile arrests and seizures of contraband tobacco and illicit drugs from organized crime groups. The Ontario Korean Businessmen's Association (OKBA) applauds these efforts and is calling on the government to invest in more law enforcement so that police can continue cracking down on the illicit trade of contraband tobacco in Ontario.

In the coming weeks OKBA members and other independent convenience store operators across Ontario will be reaching out to members of the current PC government to highlight what they are seeing in their communities. The upcoming budget provides an excellent and much needed opportunity for the government to further crack down on the illegal tobacco market in Ontario and at the same time help to rebuild Ontario's economy.

SOURCE Ontario Korean Businessmen's Association

Mr. Kenny Shim, Spokesperson for the OKBA, [email protected], [phone]