Alberta government wants tougher penalties to crack down on black tobacco market
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The Alberta government is planning to enact tougher laws on contraband tobacco including mandatory reporting of seizures and stiffer financial penalties for buyers, sellers and distributors.
“Banned tobacco not only undermines public health and makes tobacco more available to minors, it also creates unfair competition for legal retailers and reduces the revenues that fund the programs and services Albertans rely on,” Finance Minister Nate Horner said at a news conference Tuesday.
The proposed changes are part of Bill 12, or the Financial Laws Amendment Act (No. 2), which was introduced in the legislature on Tuesday.
If the law is passed, sellers, buyers and anyone caught in possession of illegal tobacco could be fined equal to three times the amount of tax paid on legal tobacco.
The fine will apply to prohibited cigarettes, tobacco sticks and finely cut tobacco and cigars where the total tobacco quantity exceeds 1,000 grams.
Horner’s announcement comes after a large sculpture incident last week near the Alberta-Saskatchewan border.
Huge seizures in Alberta, Saskatchewan
A routine traffic stop of a semi-truck traveling through Lloydminster on Highway 16 led to RCMP officers seizing $7.65 million worth of unstamped cigarettes – one of the largest seized in Alberta. Lloydminster is approximately 235 kilometers east of Edmonton.
“The seizure represents a significant disruption in the illicit tobacco trade,” said Sgt. Christopher Byford said in a statement released Monday.
Police say the driver of a semi-truck stopped in the early morning hours of November 18 was unable to provide documentation for his cargo, leading to a search of the trailer and the discovery of 8.8 million contraband cigarettes.
No further details were available about where the load came from or where it was being transported. Police were also unable to comment on whether the case was linked to the 9.3 million unsealed cigarettes seized Nov. 14 on Highway 16 near Saskatoon.
The driver, a 33-year-old man from BC, was charged with multiple counts under the Criminal Code, Excise Act and Tobacco Tax Act, including fraud, unlawful possession and importation of tobacco into Alberta.
“This impacts not only our city, but our province,” said Lloydminster Mayor Gerald Albers. “The money collected in excise taxes pays for the services our residents and residents of Alberta and Saskatchewan receive every day.”
Tax revenue worth crores went up in smoke
In 2024, the Convenience Industry Council of Canada (CICC) launched a study into the illicit tobacco sector in five provinces, including Alberta. The council represents retailers such as 7-Eleven and Circle K and a variety of vendor partners, including Imperial Tobacco and Rothman, Benson & Hedges Inc.
Study finds province to lose money from illegal cigarette sales between 2021 and 2023 Approximately $262 million in tobacco tax revenuesIt also estimated that contraband sales accounted for 29 per cent of the cigarette market in Alberta, up from 13 per cent in 2019,
“Our retailers have been sounding the alarm on banned ingredients for many years,” CICC vice-president of Western Canada Sarah McIntyre told CBC News. “It’s impacting small businesses – communities, local convenience stores can’t compete against the black market offering the same product at a 10th of the cost.”
Although concrete data about illicit tobacco is not readily available, the impact is clear, he said.
“It costs the Alberta Treasury an estimated $100 million per year,” McIntyre said. “Think how many police officers, paramedics, nurses, schools could be hired with that money.”
He said the council’s lobbying efforts had an impact on Alberta’s 2025 budget, which included funding for 10 more agents in the Alberta Gaming, Liquor and Cannabis (AGLC) tobacco enforcement unit.
Two Alberta Liquor Gaming and Cannabis investigations led to the seizure of a total of $12 million in retail value of illicit tobacco. CBC’s Travis McEwan explains why the Crown corporation is focusing on taking black market tobacco off the street.
“We were really glad to see that the Alberta government was actually listening,” McIntyre said.
He said the proposed changes in Bill 12 are “a step in the right direction” and pointed to Alberta as an example of how other provinces can crack down on illicit tobacco.
“They’re really a cut above everybody else in the country,” McIntyre said Tuesday.
