Vol. 149, No. 7 — April 8, 2015

Registration

SI/2015-26 April 8, 2015

TACKLING CONTRABAND TOBACCO ACT

Order Fixing April 10, 2015 as the Day on which the Act Comes into Force

P.C. 2015-339 March 26, 2015

His Excellency the Governor General in Council, on the recommendation of the Minister of Justice, pursuant to section 4 of the Tackling Contraband Tobacco Act, chapter 23 of the Statutes of Canada, 2014, fixes April 10, 2015 as the day on which that Act comes into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

An Act to amend the Criminal Code (trafficking in contraband tobacco), also known as the Tackling Contraband Tobacco Act (the Act) [formerly Bill C-10], amends the Criminal Code to create a new hybrid offence (section 121.1 of the Criminal Code) for trafficking in contraband tobacco with minimum mandatory penalties for repeat offenders, many of whom are affiliated with other serious organized criminal activity, such as weapons and illegal drug trafficking.

This Order, made pursuant to section 4 of the Act, fixes April 10, 2015, as the date of coming into force of the Tackling Contraband Tobacco Act, assented to on November 6, 2014 (S.C. 2014, c. 23).

Objective

The Act is part of the Government’s plan for safe streets and communities. The Act also responds to one of the Government’s commitments to help reduce the problem of trafficking in contraband tobacco by establishing mandatory jail time for repeat offenders. The Act strengthens the Government’s 2008 contraband tobacco enforcement strategy. The Government’s efforts to combat the trafficking and cross-border smuggling of contraband tobacco includes the establishment of a 50-resource Royal Canadian Mounted Police (RCMP) anti-contraband force and 10 new dedicated First Nations policing officers. Its goal is to have a measurable impact on reducing the contraband tobacco market and on combating organized criminal networks. This initiative aligns with the RCMP Contraband Tobacco Enforcement Strategy and builds on existing federal enforcement measures.

Background

Contraband tobacco remains a serious threat to the public safety of Canadians, their communities, and the economy. The contraband tobacco market is driven largely by illegal operations in both Canada and the United States (U.S.). The provinces of Ontario (ON) and Quebec (QC) have the highest concentration of illegal manufacturing operations, the majority of the high-volume smuggling points and the largest number of consumers of contraband tobacco. The RCMP estimates that there are approximately 50 illegal manufacturers operating on First Nations territories in Kahnawake (QC) and Six Nations (ON). There are an additional 10 manufacturers on the U.S. side of the Akwesasne Mohawk territory, which takes in the unique confluence of borders between the provinces of Ontario and Quebec, and the state of New York, giving rise to jurisdictional and legal challenges between federal, provincial and state laws.

The Government of Canada recognizes that smuggling contraband tobacco has become a serious problem in the last several years. In order to deal with this problem, it launched the RCMP’s Contraband Tobacco Enforcement Strategy (CTES) in 2008 to focus on reducing the availability of, and demand for, contraband tobacco and the involvement of organized crime. In addition to the enforcement measures of the CTES, the Task Force on Illicit Tobacco Products (the Task Force) was formed to identify concrete measures to disrupt and reduce the trade in contraband tobacco.

Since the inception of the CTES in 2008 and up to May 2012, the RCMP has laid approximately 4 925 charges under the Excise Act, 2001, and disrupted approximately 66 organized crime groups involved in the contraband tobacco trade throughout Canada. During that same time period, approximately 3.5 million cartons/unmarked bags of cigarettes were seized nationally by the RCMP, along with numerous vehicles, vessels and properties. These initiatives are having a measurable impact on reducing the contraband tobacco market.

Despite these efforts, contraband tobacco remains a serious threat to communities and if left unchecked, organized crime will continue to profit at the expense of the safety of Canadians and government tax revenues.

The new offence targets individuals and organized crime groups who are involved in large-volume trafficking of contraband tobacco. The offence prohibits the sale, offer for sale, possession for the purpose of sale, transportation, distribution, and delivery of unstamped tobacco products, such as cigarettes and raw leaf tobacco.

The offence is punishable by up to six months’ imprisonment on summary conviction and up to five years imprisonment if prosecuted on indictment. Repeat offenders convicted of this new offence, when 10 000 cigarettes or more or 10 kg or more of any other tobacco product or 10 kg or more of raw leaf tobacco is involved, would be sentenced to minimum mandatory penalties. A repeat offender would receive a minimum of 90 days on a second conviction, a minimum of 180 days on a third conviction, and a minimum of two years less a day on subsequent convictions. The Attorney General of Canada will be given concurrent jurisdiction with the provincial attorneys general to prosecute this new offence. Normally, federal Crown prosecutors do not prosecute Criminal Code offences, but with this amendment, federal prosecutors will be allowed to prosecute the new contraband tobacco offence.

Implications

The RCMP and federal prosecutors have used the Excise Act, 2001, a revenue statute, to combat contraband tobacco. Typically, offenders received fines for being in contravention of the Excise Act, 2001. With the creation of this new offence in the Criminal Code and the availability of harsher penalties for repeat offenders, the RCMP will have the option of laying charges under the Excise Act, 2001 or of charging the new Code offence. If the new offence is charged, federal prosecutors may seek harsher penalties. Consequently, the Tackling Contraband Tobacco Act will expose more offenders to penalties now involving imprisonment.

Provincial law enforcement, and especially Quebec and Ontario law enforcement, has combated contraband tobacco by laying charges under provincial revenue statutes. Provinces will now be able to use the new Code offence to combat contraband tobacco.

Consultation

In developing this legislation, consultations were held at the federal level with partners such as the RCMP, the Department of Finance, the Canada Revenue Agency, the Department of Public Safety and Emergency Preparedness and the Public Prosecution Service of Canada. All partners are supportive of the measures contained in the Act.

Departmental contact

Paul Saint-Denis
Senior Counsel
Criminal Law Policy Section
Telephone: 613-947-4751