Good morning, Mr. Chair and members of the committee.

I will give my presentation today in English, but I will be pleased to answer your questions in English or French.

It is my pleasure to appear before you today on behalf of OPP Commissioner Chris Lewis, who sends his regrets.

The Ontario Provincial Police sincerely thanks you for the opportunity to appear before you and to provide you with the information about how the Ontario Provincial Police contributes to the efforts to control the manufacturing, distribution, and sale of contraband tobacco. Contraband tobacco is closely linked to smuggling and organized crime. Since these activities cross many jurisdictions, the fight against contraband tobacco, smuggling, and organized crime requires effective partnerships on the part of police services and all agencies.

In 1996, the RCMP, OPP, and Revenue Canada, now known as the Canada Revenue Agency, partnered to fight these types of crimes by forming the Cornwall Regional Task Force. A significant amount of contraband tobacco smuggling was taking place on the St. Lawrence River near Cornwall and through the Akwesasne first nation. There was a period of a few years after 2000 when taxes on cigarettes were equalized on both sides of the border, and smuggling activities were considerably reduced. However, the problem quickly resurfaced when tax breaks ended within Canada.

By 2009, growing concerns about these activities motivated enforcement agencies to meet, discuss public safety concerns, and establish best practices for countering contraband tobacco and related criminal activity.

In 2010, we re-established our policing partnership within the Cornwall Regional Task Force team, which now consists of officers from the RCMP, OPP, Cornwall Community Police Service, the Ontario Ministry of Revenue, and Canada Border Services Agency. Public Prosecution Service of Canada and provincial prosecutions have also been integral parts of agency partnerships. The Cornwall Regional Task Force is a proven, effective joint-forces operation contributing to public safety.

From 2008 to 2012, 36.2% of all confiscated cartons of contraband tobacco nationwide were seized in Cornwall. During the same period, 28.7% of all confiscated loose fine-cut tobacco nationwide was seized in Cornwall. Current provincial legislation, the Ontario Tobacco Tax Act, authorizes a police officer to directly seize illegal, unmarked, fine-cut tobacco and unmarked cigarettes that are found within the course of his or her duty, in plain view, and lay appropriate charges, often done in partnership with the Ministry of Finance staff. These legal authorities support and enhance our front-line ability to effectively respond to contraband tobacco issues within the course of our duties.

New, more severe, fine levels for possessing illegal cigarettes in Ontario were also introduced with new legislation in 2011. The current fine levels for possessing illegal cigarettes in Ontario are: $100 plus three times the tax for possessing up to 200 illegal cigarettes; $250 plus three times the tax for possessing between 201 and 1,000 illegal cigarettes; and $500 plus three times the tax for possessing between 1,001 and 10,000 illegal cigarettes.

From 2010 to the present, Ontario Provincial Police highway enforcement teams have laid 286 charges for possession of contraband cigarettes under subsection 29(1) of the Ontario Tobacco Tax Act. Over the course of this same period, Ontario Provincial Police highway enforcement teams have confiscated more than 100,000 cartons of contraband cigarettes.

The OPP recognizes that smuggling is linked with organized crime groups and activities, and poses a serious threat to the safety and well-being of all Ontario citizens and visitors. Applying the principles of tactical priority setting, the OPP aligns its limited resources to proactively address important criminal activity.

Much of the enforcement responsibility has been assumed by front-line uniform officers, complemented by the dedicated operational teams previously mentioned. Through highly specialized multi-jurisdictional and joint forces capability, the OPP provides specialized support to border agencies in both Canada and the U.S.A., including the border enforcement security teams, known as BEST, led by the United States Department of Homeland Security, Immigration and Customs Enforcement Agency, or ICE.

The OPP also provides resources to support the RCMP-led integrated border enforcement teams, the integrated national security enforcement teams, the marine security enforcement teams, and other joint force operations, to safeguard against cross-border organized crime and terrorism.

The Ontario Provincial Police believes border security demands a concerted, rigorous, and coordinated approach to be successful. Municipal and provincial police services have a role to play in maintaining border security, as they respond daily to incidents at border crossings.

As the price of contraband tobacco has soared, increasing the criminal profits for those involved in its smuggling and distribution, we have seen public safety concerns also increase. Smugglers have taken to using private property, such as docks and waterfront homes, to smuggle contraband tobacco—to break the law. Smugglers have been known to act aggressively with anyone who tries to stop or challenge them. They also use high-powered boats at night, at great speeds and without running lights, creating a navigational hazard.

Of course, problems with contraband tobacco are not limited to smuggling in the Cornwall area. In addition to the Cornwall area within our east region, the area of Ontario where OPP highway enforcement teams have laid the most charges relating to contraband tobacco has been the southwestern part of the province. The contraband cigarettes confiscated in many of these stops were worth tens of thousands of dollars.

In several cases, the contraband cigarettes were manufactured within the Six Nations of the Grand River community south of Hamilton, the vehicles being registered to businesses located in this first nations community. Southwestern Ontario has also seen the phenomenon of smoke shacks progressively develop in recent years, mostly on the Highway 6 corridor, which borders the Six Nations community.

Properly taxed cigarettes that are legal to sell in Ontario have a yellow band that clearly shows: Ontario, Canada, Duty Paid, Droit Acquitté. In Ontario, some on-reserve retailers are authorized to purchase limited quantities of cigarette packages to be sold only within their first nations communities and to first nations consumers, as defined under the federal Indian Act, for their exclusive use.

However, it is clear that these smoke shacks on Highway 6 and elsewhere in the province are strategically located so that non-natives can purchase untaxed cigarettes, which is an illegal act. The sale of tobacco from smoke shops is a multi-agency issue and not one that the OPP alone can address. The OPP does not enforce federal tobacco legislation and provincial tax laws, but we do work in cooperation with the agencies responsible. When enforcement action is taken by the federal ministry of revenue, the OPP provides support to ensure public and traffic safety.

While anyone can smuggle or sell contraband cigarettes, the activity in Ontario is often tied to residents of various first nations communities. This can complicate enforcement, as the issues can be compounded with claims related to treaty rights and traditional native practices.

Contraband tobacco is a complex issue. I have only touched on a few aspects of the problem, as well as the responsive and proactive efforts of the Ontario Provincial Police. The OPP enforces laws. We don't make them. We do support any legislative changes that can be shown to reduce and deter the smuggling, distribution, and sale of contraband tobacco.

The Ontario Provincial Police appreciates the opportunity you have provided us today as you consider this bill.

Thank you very much. I would be happy to answer any questions.

Merci.

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