RCMP urge cracking down on Canadian tobacco growers supplying illicit cigarette factories

Cross-border cigarette smuggling has been a problem for years but the RCMP have had an equally tough, much less publicized battle in combating home-grown illegal cigarettes.

The source of tobacco for those cigarettes comes from Canadian fields, and the National Post reports that with a bumper crop expected this year, the Mounties are bracing for a surge of supply to illicit cigarette factories.

According to an internal RCMP memo obtained, up to 20 per cent of the crop can be disposed of each year without being officially accounted for. There is no obvious illegal market for the surplus, says the memo, which the Post said was obtained by the Non-smokers Rights Association under access-to-information legislation.

"RCMP intelligence suggests that some of this surplus is being diverted, without detection by current control mechanisms, to the illicit market and transported to illegal manufacturers in and around First Nations territories in Central Canada," Staff-Sgt. Greg Cox, a spokesman for the force, said in an emailed response to the Post to questions about the memo.

The memo recommends police target those who supply the components to the unlicensed factories, providers of tobacco, cigarette papers and filters, the Post reported.

Cracking down on cigarette makers located on First Nations reserves is considered politically dicey, the Post said.

"If you cannot shut down the illicit manufacturing facilities, you have to address issues outside the reserve, and the best way to do that is by cutting off the supply of raw ingredients," Francois Damphouse, Quebec director of the Non-smokers Rights Association, told the Post. "They're as guilty as the illicit manufacturers themselves."

Police advised tobacco growers some years ago that supplying unlicensed cigarette factories was illegal, said Staff-Sgt. Jean-Marc Piché, one of the Mounties handling the contraband file.

[ Related: Millions of illegal cigarettes seized in Manitoba ]

The federal government has committed to setting up a 50-person anti-contraband force and introducing mandatory prison terms for those repeatedly caught dealing in contraband tobacco, the RCMP said.

But Damphouse contended the Conservative government has done little to suppress illegal tobacco sales, perhaps for political reasons. The Tories hold all the ridings in southwestern Ontario's tobacco-growing region.

Anti-smoking advocates argue that cheap, illicit tobacco undermines efforts to reduce smoking rates and also cost governments billions in tax revenues, the Post said.

But aboriginal entrepreneurs say the industry has improved the economies of impoverished First Nations communities and that outside governments have no business interfering.

The internal RCMP briefing note, intended for the commissioner, said there were 55 "illicit" cigarette factories on reserves in Ontario and Quebec, plus 10 more just across the border in New York.

On their web site, the Mounties say they seized about 598,000 cartons and unmarked bags of contraband smokes last year, plus 2,200 kilograms of raw leaf tobacco and 38,000 kg. of fine cut tobacco.

The illegal tobacco business is highly lucrative. The Winnipeg Sun reported last month that their investigation of two alleged Manitoba contraband tobacco operators revealed a bag of 200 smokes bought for $3 in Ontario could be sold in Manitoba for $30 to $50.

"A single [case] of [50] bags can therefore provide a profit of $1,300 to $2,350," according to documents filed in court.