Ontario clamping down on cheap 'contraband' cigarettes

Doug Ford's Ontario PC government announced the 2025 Budget on Thursday, including a plan to clamp down on the "contraband" cheap smokes widely available across the province.

The provincial government's 2025 Budget has a section titled Addressing Contraband Tobacco, which outlines Queen's Park's plan to shut down sales of untaxed tobacco and stiffen consequences for sellers of these black market products.

According to the Budget, the province is acting to stiffen penalties for contraband tobacco, stating that it "undermines public health objectives, impacts public safety through links to organized crime, and negatively impacts Ontario's revenue integrity."

"The government is committed to addressing contraband tobacco and ensuring that those who seek to benefit from this illicit trade face stronger consequences," reads the Budget.

The move comes on the heels of changes introduced in the 2024 Budget, which increased fines for the possession of contraband cigarettes and fine-cut tobacco. 

"Building on these changes, the government is proposing to extend that approach to contraband cigars and other tobacco products (e.g., pipe tobacco, chewing tobacco), while also strengthening fines for other offences under the Tobacco Tax Act (TTA)."

The province says it will be "renewing and strengthening the Ministry of Finance's partnership with the Ontario Provincial Police (OPP) for the Contraband Tobacco Enforcement Team (CTET)," calling the move "an important lever in tackling the links between contraband tobacco and organized crime."

"The government is continuing to invest in CTET, further integrate the ministry's investigations team and OPP resources, and focus on the intersection points between contraband tobacco and other illegal commodities."

Times are especially tough in Ontario, and with some smokers now forking over upwards of $20 for a pack of darts (the majority being taxes to soften the cost burden smokers place on public healthcare), many are looking to under-the-table alternatives like contraband tobacco.

The province has clearly caught wind of shifting market preferences, saying that "online sales of contraband tobacco are also impacting provinces and territories across the country, undermining the proper functioning of markets throughout Canada, undercutting provincial revenues, hurting businesses, and facilitating organized crime."

"Ontario is calling on the federal government to work with provinces and territories to explore strategies to address this national problem."

While nobody should be rooting for organized crime, it is of particular note that Big Tobacco is taking a vocal stance supporting Doug Ford's PC government, an endorsement Queen's Park may not be so keen on receiving.

Rothmans, Benson & Hedges (RBH) issued a press release stating it was "encouraged by Ontario's progress through its commitments in Budget 2025, joining Alberta and Saskatchewan in tackling this public safety issue head-on."

The statement alleges that "Ontario's contraband tobacco market is controlled by, and funds organized crime," adding that "criminal groups involved in contraband tobacco use profits generated from the contraband tobacco trade to fund other illegal activities, including guns and drug trafficking."

Ironically, pre-merger RBH company, Rothmans, pled guilty and paid out over half a billion dollars following criminal prosecution for fraud and conspiracy for — and this is actually hilarious — its role in support of a black market tobacco smuggling operation in the early 1990s.