Nova Scotia

Illegal tobacco problem has decreased, Nova Scotia government says

The Nova Scotia government says illegal tobacco sales in the province is less of a problem than it was a decade ago. Convenience store owners says it is still costing them hundreds of thousands of dollars.

Store owners suggest increasing fines for contraband tobacco buyers

The Atlantic Convenience Stores Association wants the province to crack down on illegal tobacco sales here. (Ryan Remiorz/The Canadian Press)

Nova Scotia convenience store owners want the provincial government to bring in tougher legislation to crack down on illegal tobacco sales.

Mike Hammoud, president of the Atlantic Convenience Stores Association, says the government is losing millions of dollars in potential tax revenue because people are buying contraband tobacco.

Illegal tobacco sales are also hurting convenience store owners' bottom line, he said.

​"It causes a legitimate customer that's buying a legal product [to] leave and go to organized crime and buy an illegal product. So we would be losing a customer. "

Fine increase for buyers

That could be costing individual store owners thousands of dollars.

"When you factor in the loss of the add-on sales and the customer sales tied to that, you would definitely be into the tens, probably the tens into the hundreds of thousands for sure."  

It is a bigger problem than the provincial government is willing to admit, he said.

Tougher legislation, including increasing fines for people who buy contraband tobacco, is needed, he said.

Hammoud would like to see the province adopt a task force similar to one in New Brunswick that combats contraband. That group's goal is to dismantle the organizations that are selling contraband tobacco.

Decrease in illegal tobacco sales

But Nova Scotia has a decidedly different take on how it has handled illegal tobacco.

Brian Meagher, director of audits and enforcement, said the numbers of contraband tobacco making its way into the province has actually decreased over the last 10 years or so.

Contraband tobacco only makes up five to 10 per cent of all the tobacco products in the province, he said.

That number was much higher a decade ago when about 30 per cent of all tobacco in Nova Scotia was contraband, Meagher said.

"We've definitely had the dedicated resources towards tobacco smuggling. It has been in existence for a long, long time. In fact we've worked with New Brunswick in providing them advice in setting up their unit." 

Special investigations unit

Ten people work in the special investigations unit, which primarily deal with tobacco smuggling, said Meagher.

"That's been borne out by the decrease in the number of seizures and the size of the seizures over the last 12 years."

Meagher agrees, though, that the illegal tobacco trade is costing the province millions of dollars in lost taxes.

Meagher puts that estimate between $10 and $20 million, which represents about five to 10 per cent of the province's total tobacco market.