The illicit tobacco trade is said to be flourishing in Central Canada. According to the RCMP criminal intelligence report recently released, there are some First Nations manufacturers here that use industrial-grade machines that could make 3,000-10,000 cigarettes in one minute.
FINTRAC or the Financial Transactions and Reports Analysis Centre of Canada is responsible for tracking the money that flows from organized crime and terrorism. Showing that the underground cigarette industry has already become so profitable, it reported that there is $100 million of suspicious financial transactions in Kahnawake, Quebec alone in 2006-2012.
There are a number of manufacturers on reserves that are now becoming self-sufficient that they harvest and dry their own tobacco rather than get raw materials from other sources. The RCMP report, thus, stated that targeting the raw-leaf products as a strategy could fall short of the expected impact on the reserves.
It was introduced by the Conservative government last fall. It involves the creation of a new Criminal Code offence targeting individuals who are selling, transporting or distributing contraband tobacco. According to proponents of this bill, many who are involved in illicit tobacco trade are also involved in other organized crimes such as drugs and weapons trafficking.
This bill also proposes that repeat offenders involved in high volume contraband will be subject to mandatory minimum penalties. This bill is now in the Senate after having passed the third reading in the House.
Strongly opposing this bill are First nations chiefs. They noted that many residents are relying on tobacco trade in earning money. They added that there are already a lot of aboriginals inside the prison. The new measures, according to the chiefs, will violate the inherent treaty and aboriginal rights on producing and selling tobacco. Organized criminal infiltration, they argue, could be better addressed via internal governance and added funding for the aboriginal police.
Akwesasne Mohawk Council chief Steven Thomas said that they are undermanned and under-equipped in the police. Mohawk Council of Kahnawake chief Gina Deer said that they need to make laws for combating criminal elements. She added that they need to create laws in the community that will protect its members and the industry created in Kahnawake.
She added that they have good economy in the community. It is not just Kahnawake that benefits from the industry but nine other communities. In the RCMP report, it was written that illicit tobacco trade has Kahnawake as its center. According to the police, there are roughly 50unlicensed manufacturers in the country and there are 13 located on the Akwesasne territory’ American side.
Some have established their own plantations to reduce the dangers of raw material importation from outside suppliers. The police knew in 2012 that only a square kilometer of tobacco had been planted in Six Nations reserve and over 100 kilns were used for drying tobacco.
However, many manufacturers remain relying on tobacco suppliers from the US and South America. Canada Border Services Agency enforcement and intelligence operations director general Geoffrey Leckey informed the House Committee last December that the total of seized fine cut tobacco increased to 192,000 kg in 2013’s first 10 months from 148,000 kg in year 2012 and 35,000 kg in 2011.
He said that they feel that the plague is growing. Evidence also shows that licensed farmers of tobacco in Canada are diverting a percentage of their raw tobacco leaves to manufacturers in Quebec and Ontario that have no licenses.
Illicit Tobacco and Organized Crimes
Police is mostly concerned about the connection between illegal cigarette trading and organized crime gangs. The report said that they assume illicit tobacco financing, manufacturing and distributing roles and reinvest profits in funding other illegal activities.