BRITISH COLUMBIA POSTS MASSIVE TOBACCO TAX DEFICIT DUE TO EXPLODING ILLEGAL TOBACCO MARKET

The $229 million robbed from taxpayers is the largest loss for any province since 2013

MONTREAL, Sept. 11, 2023 /CNW/ - British Columbia has posted an unprecedented $229 million decline in tobacco tax revenue that reflects the unrelenting growth of the illicit tobacco market in the province.

"The latest fiscal update is clear—British Columbia has a serious illegal tobacco problem, and it is time to take decisive action," said Eric Gagnon, Vice-President of External Affairs at Imperial Tobacco Canada (ITCAN). "The Government of British Columbia is well aware of this growing problem and without implementing effective measures to combat the contraband tobacco industry, the situation worsens, and fuels organized crime with hundreds of millions of dollars."

Last week, the Government of British Columbia released its 2022-2023 public accounts data. In 2022-23, the province generated $531 million from tobacco taxes, which is much less than their expected $760 million. This difference of $229 million is the biggest loss for any province since at least 2013. Additionally, British Columbia saw the largest drop in tobacco tax revenues year-over year of any provinces since at least 2013.

''In the second half of 2022, following the alarming decline in legal tobacco sales in BC, we commissioned Abacus Data to conduct an independent market assessment. They estimated an illegal market share of 34% – higher than anything we have previously seen for BC and the second highest rate in Canada. The Public Accounts validate that research'' said Mr. Gagnon.

At minimum, ITCAN calls on the BC government to immediately establish a dedicated illegal tobacco enforcement unit - modelled on Quebec's highly successful Accès Tabac program - and establish a working group with the tobacco industry, retailers, and law enforcement to share intelligence about illegal tobacco activity in the province. These are essential first steps to get this problem under control before BC suffers further economic loss and growth in organized crime.

"We have been raising concerns regarding the illicit trade for years. The effects are huge and impact all parts of society. The illegal tobacco market deprives the government of significant revenues to fund provincial priorities, hurts small businesses, finance criminal gangs, fosters criminal activities, and provides youth with easy access and affordable tobacco products. The latest public accounts data underscore the urgent need for action," said Mr. Gagnon. "Illegal tobacco enforcement must be made a priority before the situations gets even more out of control."

Imperial Tobacco Canada is Canada's leading tobacco and vaping products company and is part of the world's most international tobacco group: BAT. BAT is a global multi-category consumer goods business, operating in over 180 markets. Our vision is to build A Better Tomorrow™ by reducing the health impact of our business through offering a greater choice of enjoyable and less risky products for our consumers.

Our strong foundations, together with our capacity for cutting-edge innovation, are a platform for us to build more sustainable products for our adult consumers, and a more sustainable business for our colleagues, shareholders, and communities.

SOURCE Imperial Tobacco Canada