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Originally Posted by PepsiFree
I find the notion that this will create a cigarette black market completely hilarious.
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When the Chretien government steeply hiked tobacco taxes in the 90s it spurred a huge black market in Canada, mostly through Mohawk territory. People I knew were buying black market smokes by the carton.
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Prime Minister Jean Chretien announced Tuesday that Canada will slash federal taxes on cigarettes to combat widespread smuggling and organized crime.
…"Smuggling is threatening the safety of our communities and the livelihood of law-abiding merchants," Chretien argued in the House of Commons in Ottawa as he proclaimed the strategy.
A carton of cigarettes on which all taxes are paid costs upward of $44 in Canada, against as little as $15 for the contraband product. ($1.30 Canadian equals about $1 U.S.). Hundreds of millions of dollars worth of illegal cigarettes enter Canada every month, chiefly through Mohawk Indian reservations that straddle the border with the U.S. in Ontario and Quebec.
"The organized crime networks that control 95 percent of the tobacco smuggling also supply and distribute smuggled liquor, firearms and drugs. It is essential that we take strong steps to dismantle these networks," Chretien said.
A decade of high taxes on cigarettes has fostered a black market boom in which tobacco smugglers recently have begun defending their shipments with assault rifles along the St. Lawrence River.
It also touched off a tax revolt by retailers in Quebec, where contraband cigarettes account for about two-thirds of all sales. Nationwide, about 2 million smokers-one-third of all tobacco users in Canada-buy bootleg smokes.
https://www.chicagotribune.com/news/...139-story.html
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