Tobacco tax will drive people to illegal smokes

Contraband cigarettes. (SIMON CLARK / QMI AGENCY)

Contraband cigarettes. (SIMON CLARK / QMI AGENCY)

Jessica Hume, National Bureau

, Last Updated: 7:48 PM ET

OTTAWA - Smoke shacks on First Nations reserves may see a little more traffic after yet another tax hike on tobacco was introduced in the feds' 2014 budget, much to the chagrin of smokers.

Finance Minister Jim Flaherty said domestic tax on cigarettes hasn't changed since 2002, so this increase, about $4 per carton, simply accounts for inflation.

Smokers worry for their pocketbooks and Dave Bryans, CEO of the Ontario Convenience Store Association, said it would hurt the small business owners for whom tobacco sales make up 50% to 60% of daily sales.

"This will drive more people underground at a time when contraband tobacco is at an all-time high," he said.

A spokesman for Rothman, Benson and Hedges said he was "certainly concerned that taxes are going up at a time when contraband is still a major issue."


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