Buy Tobacco Illegally in Canada?

In tobacco-related news: Recent reports in several media outlets throw some light on the deepening problem that illegal small cigar factories, known as chinchals, pose for the Cuban government. It turns out that other United States neighbors face similar problems in managing the flow of tobacco.

A flurry of news reports suggests that Canada is having trouble controlling contraband tobacco--generally tobacco either stolen from producers or sold off-the-books in order to avoid the country's high tobacco taxes. The scale of the problem? No one's entirely sure, but one of the largest Canadian tobacco companies has suggested that untaxed revenue from contraband tobacco is costing the country billions of dollars. And in a recession, that's not chump change.

The same study (funded by industry groups) found that up to thirty percent of the tobacco used in Canada is illegal. That number balloons to forty or fifty percent in places like Ontario and Quebec.

One reason this is a serious issue is such tobacco, often sold on the super-cheap in bulk to consumers for a rate that amounts to pennies per cigarette, does not have to clear any health, safety, or quality control boards.

In addition, the larger the trade gets, the bigger the revenue that the government misses out on taxing--which creates big problems for a society with such a generous tradition of social spending. It also means lower sales for convenience stores and other legitimate businesses, not to mention the tobacco companies themselves, who figure their lost revenue at nine hundred million.

Where is this tobacco coming from? The Royal Canadian Mounted Police (who seize large amounts of the stuff every year) say it's coming from the United States. More specifically, they trace some of the tobacco to the Akwesasne Mohawk reserve near Ontario, which extends across the US-Canada border. Thus the problem with enforcement: the tobacco is coming from a place that crosses national boundaries, and has a certain amount of limited freedom from both. Several levels of a couple different governments need to be enlisted in any effort to significantly reduce the tobacco influx ... as well as, most likely, a study of who is producing this tobacco, and what economic, social or legislative changes might reduce their incentive to do so.

In the meantime, say critics, the Canadian government could at least prohibit sales of tobacco products such as rolling papers to those who don't, you know, have a license to make or sell tobacco products.

In any case, news reports don't mention a widespread illegal-cigar tobacco problem. And cigars do indeed represent a less attractive option for counterfeiters. Cigar aficionados are looking for better-quality cigar tobacco, and part of the reason for growing illegal cigar tobacco is that you don't have to do quality control. Also, chopped-up cheap tobacco is easier to transport and hide than the full-leaf kind that tends to make a great cigar. Illegal cigar-making tends only to happen in cases where there's a strong incentive to do so, as in Cuba ... and people don't exactly stream across the border for these great Canadian cigars.

Still, in a troubled economy, how long before we can expect to see similar problems arise in the other areas? In the meantime, the Canadians' problem is one more reason to buy cigars from a trustworthy, known source.