Criminal Code Bill to Amend – Second Reading


Bill S-16, Trafficking in Contraband Tobacco (second reading) April 16th, 2013

On the Order:

Resuming debate on the motion of the Honourable Senator White, seconded by the Honourable Senator Maltais, for the second reading of Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco).

Hon. Jane Cordy: Honourable senators, I am speaking today to Bill S-16, An Act to amend the Criminal Code (trafficking in contraband tobacco). It amends the Criminal Code by creating a new Criminal Code offence of trafficking contraband tobacco and legislating new mandatory minimum penalties of imprisonment for repeat offenders.

Contraband tobacco sales were significant in the late 1980s and the early 1990s. The Liberal government elected in 1993 took measures to counter these rampant contraband tobacco operations. They reduced taxes on cigarettes. They increased enforcement efforts. They increased penalties. They allowed the proceeds of crime to kick in related to tobacco smuggling. These measures were largely successful as cigarette smuggling was reduced by the mid-1990s.

Today's contraband tobacco operations are quite different from those of the 1990s, as Senator White explained so well in his speech on Bill S-16. In the 1990s, the cigarettes smuggled back into Canada were products manufactured legitimately, whereas today's contraband tobacco products are illegally produced, transferred and sold in Canada. These activities go on to fund other organized crime across the country. As opposed to the products smuggled in the 1980s and the 1990s, these products do not undergo any kind of quality control or inspection and, as studies have shown, these contraband cigarettes often contain impurities such as rodent and human feces, mould, insects and insect eggs. That in itself is disgusting and should cause a reduction in the purchase and usage of these products, but unfortunately the low cost makes it too attractive for many.

The shockingly low cost of these products, $8 per carton versus nearly $90 per carton for legal cigarettes, makes it incredibly easy and affordable for young people to purchase. One study found that nearly one third of cigarette butts found on school properties across Canada were contraband.

Currently, contraband tobacco offences are prosecuted under the Excise Act providing for monetary fines. Creating the new offences under the Criminal Code for these types of crimes gives more powers to the federal government to pursue longer jail times for offenders and can provide harsher penalties for those involved in organized crime. The change was explained by one department official as providing greater flexibility to prosecutors, which is good.

There have been some concerns raised about this government's legislative strategy to deal with contraband tobacco. Aboriginal and First Nations leaders have expressed concerns that this bill will worsen the serious issue of incarcerated First Nations youth. At a time when the incarcerated Aboriginal population comprises over 20 per cent of the federal prison inmate population while only making up 4 per cent of the Canadian population, they fear more Aboriginal youth who are tempted into these activities will ultimately end up in prison in increasing numbers. These concerns were raised by Brian David, Chief of the Ontario portion of the Akwesasne First Nation, who said that recruiters — some from outside organized crime groups — work hard to pull young people on the reserve into smuggling. A CBC News article quotes him as saying:

Every time our youth is taken, every time he's convicted, every time he's sent away, that's a part of our future that's taken away.

Chief David expressed concern that youth who go to jail as small-time players in these activities in the community will return as hardened criminals.

Honourable senators, those who break the law should be penalized. Those involved with contraband tobacco should be penalized. Any tobacco is harmful to Canadians, but contraband tobacco can be particularly harmful. We know that young people are more likely to purchase illegal cigarettes because of the low cost. Honourable senators, I would have hoped that the Prime Minister or the Minister of Aboriginal Affairs could have met with Aboriginal leaders before bringing this bill forward. Dialogue and consultation may have alleviated the fears of Mohawk leaders who are worried about the effect Bill S-16 may have on the young people in their community.

Lloyd Phillips, a chief on the Mohawk Council of Kahnawake said:

I feel they're approaching it all wrong.... They're trying to come down with a heavy hand....

Chief Phillips believes that proper regulation and increased cooperation between Canada and the United States would be more effective.

Honourable senators, it would seem that consultation, cooperation and a multi-pronged approach, rather than more mandatory minimums, would have resulted in better legislation.

I am pleased to see this government acknowledge the considerable problem contraband tobacco operations have become in Canada. I am in favour of legislation which aims to curb these activities and limit young people's access to tobacco products, particularly contraband tobacco. Teenage smoking is a health issue. It is important for the health of our young people that the Government of Canada be continually vigilant and proactive in countering all smoking but particularly teenage smoking. We know those who start smoking at a young age are likely to continue smoking for a long time.

As I stated earlier, those who deal with contraband tobacco should be penalized. The Conservative government once again chooses to do this by bringing in mandatory minimums for repeat offenders. There is no proof that mandatory minimum sentences work and yet once again the Conservative government's solution is mandatory minimums.

I have heard from an official of the Department of Justice that the deterrent effect of mandatory minimum sentences is speculative. The deterrent effect of mandatory minimums is speculative and this seems to be the government's solution to any new law relating to crime. Surely we can do better than same old, same old.

We know that increasing the taxes on tobacco products usually causes an increase in the sales of contraband tobacco, yet the government introduced Bill S-16 dealing with slowing the trafficking of contraband tobacco while at the same time announcing, in the 2013 budget, tax increases on tobacco. Such a measure does not make any sense to me.

The changes made by the Liberal government in the 1990s, which reduced trafficking significantly, were a multi-pronged approach and included a reduction in tobacco taxes. This government introduces mandatory minimums for trafficking in Bill S-16 while at the same time increasing tobacco taxes, which is shown to increase trafficking. Why can we not have a plan? Why can we not have a multi-pronged approach that will really work to greatly reduce or, to be really optimistic, would eliminate the sale and trafficking of contraband tobacco products? More taxes are being raised. They said they would not raise taxes but they are doing it again and again, but never in an open and accountable way, always in an underhanded way.

Honourable senators, we know that contraband tobacco is harmful to the health of Canadians. We know that it hurts convenience store owners. We know it reduces tax revenue for the government.

Senator Mitchell: It is the only carbon tax they have.

Senator Cordy: We know that it funds organized crime.

I look forward to the opportunity to study this bill in committee and to address the issues raised by those concerned with the trafficking of contraband tobacco products. I would hope that the committee will hear from First Nations groups and youth experts about whether or not this bill will actually address the problem of trafficking contraband tobacco.

Hon. Hugh Segal: Would the honourable senator accept a question?

Senator Cordy: Yes.

Senator Segal: I believe the senator will know that one of the unintended results of Prime Minister Chrétien's decision not to enforce the tobacco laws or the criminal laws is because he was advised by security and police that to do so could cost lives on all sides and to reduce the taxes produced a massive increase in young girls taking up smoking in a fashion that will produce serious health problems for hundreds of thousands of young women in this country. Is the honourable senator still of the view that that was the best way to proceed, allowing that change in the core cost structure to seduce many more young women into smoking in a fashion that will produce desperate health consequences for them in the future? Is that her view and advice to this chamber?

Senator Cordy: I believe the honourable senator brought forward a motion on contraband tobacco and I actually spoke in favour of that motion.

As I said numerous times in my speech, I am against contraband tobacco. Quite honestly, I am against smoking of tobacco whether it is legal or illegal. I have an allergy to tobacco and I think it is very harmful to the health of Canadians. The idea that young people get involved in smoking is unfortunate. Studies show that young people are getting involved in smoking and how tobacco companies lure young people into smoking. It is outrageous.

We had a bill brought forward here a few years ago on the small cigarillos with flavoured tobacco. I was the critic for that bill and Senator Keon was the sponsor. Again, I spoke at that time to say that we should do whatever we can to stop smoking, particularly in young girls, which seems to be the one demographic where smoking is increasing. We are seeing a dramatic drop in smoking from most demographic ages, but when you look at young girls it seems to be one of the few areas where the numbers are growing stronger. I believe we should do whatever we can to stop trafficking in contraband tobacco. I think we should be doing whatever we can to stop smoking overall for the good health of all Canadians.

Senator Segal: May I ask the honourable senator another question?

As she will know, having been the critic on that previous effort introduced into this chamber by Senator Keon, to do away with basically candy and other flavoured cigarettes that are aimed specifically at attracting young people to smoking at a very early age, one of the difficulties that the Crown faced when that legislation was passed was that no sooner did that legislation go into effect than the contraband tobacco industry produced absolutely similar products at a fraction of the price, dumped on high school campuses in Kingston and in cities across Canada in a fashion that gutted the impact of that legislation and produced an even greater risk because the price was lower.

Would the honourable senator not be of the view that some action on the enforcement side, as suggested in the bill before us — and this will be discussed in committee and I accept her view that study before the committee will be a constructive process — is necessary before generation after generation of young people become seduced by a process that may in fact, as Senator Cordy said, be connected not only with organized crime but with terrorist funding syndicates in various parts of Central America and elsewhere?

Senator Cordy: I thank the honourable senator for an excellent question. Also, like the honourable senator, I was disappointed to see that, despite the best intentions of the legislation on flavoured tobacco, what happened is that the companies that produce these flavoured tobaccos have skirted around the rules that were brought out in terms of size of cigars or the size of the packages. I do not know the name given to these products. They changed the size so they would actually slide around the legislation. I think we have to look at that bill again that we brought forth because both sides of the chamber supported it and senators hoped that it would provide some good to stop flavoured tobacco sales. As the honourable senator says, we know that schools are being flooded with these products. I wish it was only high schools, but it is junior high schools and elementary schools as well where one finds cigarette butts. Many of them, unfortunately, are the remnants of contraband tobacco and many of them were in fact flavoured tobacco.

I think the government should go back and look at how these companies skirted the law so that it can tighten up the law. It always seems that whatever we are doing and however hard we are trying to stop contraband tobacco, there is a greater force with probably far more money trying to find ways to skirt around the laws. As the honourable senator said earlier in his comments, the goal seems to be to get young people smoking earlier because then they are hooked on it; we know smoking is very addictive.

The honourable senator asked whether we should take action on the enforcement side. Absolutely we should. I said several times during my speech that if one breaks the law, particularly with contraband tobacco, then the full force of the law should be brought down.

My comment is that mandatory minimums do not work, so why is this government bringing forward mandatory minimums yet once again?

Senator Runciman: They do work.

The Hon. the Speaker pro tempore: Further debate?

Hon. Wilfred P. Moore: Would the honourable senator take another question?

Senator Cordy: Yes.

Senator Moore: Having heard Senator Segal's comments with regard to the evidence of young women smoking these contraband products and other tobacco products, does the honourable senator expect, when this matter comes before committee, that there will be individuals giving evidence, or will there only be written reports, as occurred when she brought forward her CCSVI issue?

Senator Cordy: My hope is that we hear witnesses at whatever committee the bill goes to, and I am not sure it will be at the Social Affairs Committee.

The idea to axe my bill was made long before witnesses were heard at committee. That was my understanding after reading information about what happened at a Conservative caucus meeting. That decision was made in February 2012.

I certainly hope decisions have not been made for whatever committee this bill happens to be brought forward to before we even hear from witnesses. I hope we hear from First Nations leaders who have expressed concerns. None of them are saying that there should be contraband tobacco; none of them are saying that. They are asking whether this is not a little bit heavy-handed, and whether we will not once again be looking at the so-called "bit players" in the whole organization. The young Aboriginal youth will be the ones sent to jail while those making the millions of dollars will not and will continue to make millions of dollars.

It would be unfortunate if the government once again has failed to consult with the groups that are most affected. It would have been prudent had the government actually sat down and consulted with First Nations chiefs and said, "We have a big problem; let us work together to see if we can solve this problem."

I hope also that there will be experts on young people who can say whether this will work. We have not heard any evidence yet to say whether mandatory minimums work. I would be surprised if we had witnesses other than the Conservative minister to say that mandatory minimums work. I was speaking to someone in the Department of Justice Canada, and he said mandatory minimums are not proven; their results are merely speculative. That is the best any of us can say — maybe they work, maybe they do not. There is certainly no evidence despite all the Department of Justice Canada bills coming forward with mandatory minimums.

I would hope that the committee does not have its mind made up and that we will actually listen.

This bill has not been in the other place. It was introduced in the Senate, so I would hope that we will listen to people who come forward at the committee. If changes have to be made, they can be made at committee.

Hon. Terry M. Mercer: Honourable senators, if Senator Cordy will take another question, perhaps she could clarify something she said. I think it is important that we all understand.

She talked about officials being at a meeting of a Conservative caucus. Could she explain her reference to that Conservative caucus meeting? I know she is not a member of that group, but she seems to have some inside information.

Senator Cordy: I was actually quite surprised to read in access to information materials that the head of the CIHR, Dr. Beaudet, was actually at the Conservative caucus meeting in February 2012, talking to them about my bill. The information that came through from the access to information provided five binders, each four inches thick. That is be a lot of material — 20 inches of material. Maybe I should be flattered that so much time and energy was spent on my private member's bill.

Unfortunately, it showed that Dr. Beaudet spent time at the Conservative caucus meeting talking about my bill on MS. The CIHR is supposed to be, according to its website, an arm's-length agency. I do not think that attending a Conservative caucus meeting was really arm's length. Not only was he there to talk about the bill, but also he said he would provide a five-page briefing note to the minister about why the government should not support the bill. I think that is a little beyond arm's length.