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CORCORAN: Ottawa's fruit-flavoured tobacco bomb 

Jump to full article: Financial Post (ca), 2009-11-17
Author: Terence Corcoran, Financial Post

Intro:

The result was Bill C-32, officially titled The Cracking Down on Tobacco Marketing Aimed at Youth Act -- a misnomer if ever there was one. Today, a year later, what Mr. Harper's Conservatives have delivered instead is an over-the-top law that threatens a global trade war and another bonanza for Canada's already out-of-control contraband cigarette market.

The trade-war potential gathered momentum earlier this month when, according to Inside US Trade, the United States joined Argentina, Mexico, Switzerland, the European Union and other nations in opposition to Ottawa's new anti-bubble-gum tobacco law. At a meeting in Geneva, the nations said Canada's law would restrict trade in regular tobacco products to the benefit of Canadian tobacco producers.

The more immediate impact of the law, however, is a ban on the sale in Canada of virtually all brands of U.S. cigarettes. Guess where that leads? The logical result of a ban on legal imports of Marlboros and Winstons is new demand for illegal supplies through the burgeoning Native-dominated contraband market, a tax-evading multi-billion-dollar industry that already accounts for between 33% to 50% of the Canadian cigarette market. . . .

While this may look like another case of unintended consequences run amok, it more likely is part of deliberate scheming by Health Canada officials and others who are consciously using fruit-flavoured smokes to create a global tobacco trade bomb against the U.S. and tobacco industries in Europe, South America and Asia. . . .

Still, Bill C-32 became law, even though Senator Segal abstained over the trade issue. As a result, Mr. Harper's opportunistic election gimmick, aimed at curbing the use of flavoured tobacco to children, will do nothing to protect children. By further enhancing the power and scope of the contraband market, it will only increase the supply of illegal cigarettes, a prime source of tobacco to the young. At the same time, the government has launched a protectionist scheme that threatens a trade conflict.

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