Questions for Quebec’s Revenue Minister Robert Dutil.
Quebec’s Revenue Minister Robert Dutil has been on the frontlines of the provincial government’s efforts to build a united front against contraband tobacco products. Before the Christmas holidays he provided CStore Life with his take on how the battle is progressing.
Studies show that roughly 40 percent of all tobacco products sold in Quebec are contraband and the number is growing. Is this issue a priority for your government?
We are aware of the implications of contraband tobacco products for both convenience stores and regarding their effect on public health. That is why we recently passed Bill 59, new legislation that includes 15 actions are targeted to towards this problem. The bill includes a moratorium on the issuance of cigarette manufacturing permits and tightens controls on the sale of cigarette making equipment. Fines will be increased for manufacturers who sell on the contraband market from $3,000 to $5,000 for the first offence and then to as the greater of $10,000 or ten times the amount of tax lost for subsequent offenses. Fines will also be increased for vendors who get involved with contraband distribution. Enforcement will also be tightened. The bill permits municipal police to make contraband related arrests and to keep the fines that they collect when they do so.
Bill 59 has been welcomed by some as a good first step in combating contraband. But many believe further action is needed. What other actions is your government taking to combat contraband tobacco products in the province?
We take it one step at a time. Our first priority is to implement the new law, to teach people about the new regulations. Once the public is better informed about the new provisions, we will get a far better idea of their effect.
The RCMP estimates that 90 percent of contraband tobacco comes in through the Akwesasne Mohawk Territory, which straddles the Canada-U.S. border. What steps is Quebec taking to work with the federal government and the other provinces on this file?
As you know the Akwesasne reserve borders Quebec, Ontario and the United States. In addition border issues are handled by the Canadian government. So there are a lot of players involved We are currently working with all of the key parties, including the federal and Ontario governments on issues related to contraband, not just those dealing with Akwasasne. One issue that were are making headway on is to increase public awareness about the challenges posed by contraband tobacco and by smoking in general. We will be making some announcements in that regard during coming months. Don’t forget, when we target contraband, our objective is not just to make more money from cigarette taxes, it is also to encourage people to smoke less.
What lessons did Quebec learn from its implementation of the HST that it could pass on to other provinces, such as BC and Ontario?
It’s simple. We learnt that it is just as easy to collect two taxes as it is to collect one. Here the Quebec government collects both the GST and the provincial taxes and then it remits the federal government back its share. When the system began to operate we almost immediately began to see major efficiencies. For example the federal government transferred $132.4 million to Quebec last year to pay for part of the collection fees. So the system works well for both parties.
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