Contraband Tobacco Laws in Canada

Contraband tobacco is tobacco that is not purchased, possessed, acquired, marked, stamped, transported, stored or sold in accordance with federal and provision legislation. After introducing the Tackling Contraband Tobacco Act in 2014, the federal government amended the Criminal Code to combat the trafficking and cross-border smuggling of contraband tobacco. 

Contraband tobacco costs billions in lost tax revenue each year. The profits from illegal tobacco sales are often used to fund other serious organized criminal activities such as weapons and drug trafficking, according to the Government of Canada. The RCMP estimates there are some 175 criminal gangs in Canada that trade or sell contraband tobacco. Cigarette prices across the country vary but can cost as much as $178 per carton, it is reported. However, some illegal cigarettes can sell for as little as $45 per carton.

Not only does contraband tobacco threaten tax revenue that reduces support for such programs as healthcare and education but it undermines efforts to reduce smoking rates, the government reports. 

Trafficking can involve the following actions:

• sale;
• offer for sale;
• possession for the purpose of sale;
• transportation;
• distribution; or
• delivery.

Along with s. 121(1) of the Criminal Code, each province or territory has its own laws governing contraband cigarettes. In British Columbia, for example, you can be fined three times the province’s tobacco tax, up to $50,000 and be jailed for two years imprisonment for being involved in illegal tobacco activities.

Exceptions

Under Bill C-10, Section 2.2.1 on Prohibited Practices specifies an exception. It states that "the prohibition does not extend to possession without the intention to sell these controlled goods." To clarify, possessing unstamped tobacco is not illegal if there is no intent to resell it.