Aboriginal smoke sales raise questions

Over 137 million cigarettes were sold tax-free for the personal use of status aboriginal people in Nova Scotia last year. The information, obtained through a freedom of information request by the Canadian Taxpayers Federation, means either that each of the 15,000 status aboriginals (including children) in the province is smoking about a pack a day or a large quantity of cigarettes are being sold tax-free to non-aboriginals. “And those numbers don’t include illegally imported cigarettes,” Kevin Lacey, the federation’s Atlantic director, said Monday.

 “We want the province to investigate this and find out what’s happening here and why so much tobacco can be sold to such a small amount of people.” Lacey said the numbers show a significant portion of the tobacco intended to be sold tax-free to non-aboriginals is being sold to a wider market. While status aboriginals account for about 1.5 per cent of the province’s population, they would be responsible for about 13 per cent of Nova Scotia’s cigarette consumption, according to the figures. The numbers are getting worse. In 2010-11, status aboriginal tax-free sales were responsible for about 11 per cent of the province’s cigarette consumption.

 Status aboriginal people in Nova Scotia can buy tax-free cigarettes at stores on their reserves. There is a quota, negotiated between the province and aboriginal communities, for determining how much tobacco is available tax-free to aboriginal communities. It is illegal for non-status Nova Scotians to buy tax-free tobacco at on-reserve stores. According to Lacey, non-aboriginal smokers pay about $5.39 in tax on a pack of 25 cigarettes, roughly half the price.

 “When you look at the numbers, I think the reality is that a lot of this tobacco is going to the black market, which means we’re losing tax revenues that could be going to doctors and teachers and lessening the tax burden on the people of this province, who already suffer under one of the heaviest tax burdens in the country,” Lacey said. “I don’t think the province wants to take on the aboriginal community and the chiefs with this problem.”