Canada’s illegal tobacco industry hits record $1.3bn

Contraband tobacco now accounts for over 50% of total sales in the region of New Brunswick.

Organized crime, trafficking in drugs, guns and tobacco, are cashing in on Canada’s growing contraband tobacco market, racking in almost $1.3 billion, hitting retailers in the process.

A new study conducted by EY Canada, commissioned by the Convenience Industry Council of Canada (CICC) finds the illicit tobacco market is booming, and in some cases surpassing legal sales, harming Canadians, small businesses and government revenues.

Using sales data of legal tobacco products between 2019 and 2023, the new report estimates the illegal tobacco market, controlled by organized crime, is enormous. Contraband tobacco now accounts for 29% of the market in Alberta, 38% in Nova Scotia, 45% in Manitoba, and an incredible 52% in New Brunswick.

That means that in those provinces, at least 1 in every 4 cigarettes sold, are sold in the illegal, unregulated black market. Only in Quebec, which has taken serious action to crack down on the booming illegal market, does that number sink below 20%.

“The illegal tobacco industry isn’t a victimless crime. Contraband costs us all and is taking money out of the pockets of law-abiding Canadians,” said Anne Kothawala, President and CEO of the Convenience Industry Council of Canada.

The study estimates that in 2023 alone, these five provinces lost a combined total of $316 million in tax revenue.