A seizure of 90,000 illegal cigarettes near Vermilion may seem small, but experts say it’s part of a dangerous national trend.
“This is a significant issue across the country,” said Rick Barnum, executive director of the National Coalition Against Contraband Tobacco. “It’s a multi-billion-dollar industry now.”
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The illegal tobacco trade isn’t just about cheap smokes. It’s about organized crime, Barnum warned.
He said groups run contraband tobacco like a business and pool all the profits. The profit margin on illegal smokes is between 300 and 400 per cent, making it very lucrative.
Barnum, who spent more than 30 years with the Ontario Provincial Police, retired as Deputy Commissioner of Organized Crime Investigations. He said the profits from illegal tobacco helps fund other crimes.
“Locally, when individuals go missing and guns are coming in and fentanyl and cocaine are being sold — it’s the same people,” he said.
Police found the seized cigarettes during a traffic stop on Highway 16 just outside Vermilion in May 6. The 90,000-cigarette bust is a drop in the bucket as it’s a significant problem across the country.
“That’s not too big,” Barnum said. “We had some seizures last summer in Saskatchewan, like tractor-trailers full. Which, isn’t a big loss to the criminals.
“It’s a significant enough problem that organized crime will load up these tractor-trailers full of tobacco, take it to their distribution points, set it up, and engage their networks. And if they lose a tractor-trailer or two along the way to police, its a one right behind the other type thing.”
Barnum explained organized crime groups ship illegal cigarettes across Canada, often from Ontario. He said they can produce cigarettes for “literally cents” and sell them for up a huge mark-up.
“The chance for them to make profit on contraband tobacco is about 400 per cent, and I’m yet to see too many people go to jail for selling contraband,” he said.
Barnum praised local police and the Alberta government for their work.
“Great work by police and a proactive stop and knowing what they’re dealing with,” he said. “The government of Alberta is taking this issue seriously and they’ve been very progressive.”
He also said community awareness is key.
“People just need to understand you’re not just buying a pack of cheap smokes. You’re supporting organized crime very directly,” Barnum said.
Illegal tobacco hurts small businesses and cuts into health-care funding. Barnum stated Ontario alone lost over $1 billion in tax revenue over three years, and it’s the same for every province in Canada. They lose tax revenue, which then would fund hospitals, roads and other provincial priorities.
He called for stronger laws and more efforts to seize illegal profits.
“We need to start really going after the financial assets of organized crime,” he said. “Put it back into our government where it belongs.”
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