{"id":120983,"date":"2018-09-11T10:15:08","date_gmt":"2018-09-11T14:15:08","guid":{"rendered":"https:\/\/depquebec.com\/?p=120983"},"modified":"2018-09-12T07:12:06","modified_gmt":"2018-09-12T11:12:06","slug":"quebec-could-rack-up-to-1-billion-in-fines-by-enforcing-tobacco-laws-in-kahnawake","status":"publish","type":"post","link":"https:\/\/depquebec.com\/en\/quebec-could-rack-up-to-1-billion-in-fines-by-enforcing-tobacco-laws-in-kahnawake\/","title":{"rendered":"Quebec Could Rack Up To $1 Billion In Fines By Enforcing Tobacco Laws In Kahnawake"},"content":{"rendered":"

Should the Quebec government decide one fine morning to walk the talk by enforcing laws to everyone equally \u2014 including the good people of Kahnawake\u00a0Native reserve \u2014 how many dollars in fines would a smoke shack be liable to for its numerous offenses under the Tobacco Control Act<\/a>?<\/p>\n

Answer: $5.2 million<\/strong>\u00a0in fines per smoke shack, as estimated by DepQu\u00e9bec<\/strong>.<\/p>\n

And if we take the entire Kahnaware reserve that includes about 175 smoke shacks, what would be the total fine that could be imposed?<\/p>\n

Answer: almost $1 billion<\/strong>, or a full year of Loto-Qu\u00e9bec government dividends!<\/p>\n

These findings are not trivial as they bring to light the extreme severity of tobacco laws and regulations imposed upon the 8000 convenience stores, grocery stores and supermarkets in Quebec who nevertheless accept to sell tobacco despite all the risks incurred.<\/p>\n

And while Quebec political parties are announcing billions in electoral promises, DepQu\u00e9bec<\/strong> is rendering a useful public service by pointing out to a potential source of income to fund those promises through this mostly forgotten area of tax evasion!<\/p>\n

An Act? Which Act?<\/h5>\n

According to our estimates, this large sum of $1 billion in fines, which is very much a disguised subsidy, represents the sum of the fines payable by all 175 current smoke shack owners at a rate of $5.2 million each on average, for a total of $910 million for the entire reserve.<\/p>\n

\"\"<\/a>
The large Mohawk Reserve in Kahnawake, located not far away from downtown Montreal, is Canada’s mecca for contraband tobacco. With its 12 manufacturing plants and 175 smoke shacks, it is estimated that illegal tobacco makes the living of 2000 people over there.<\/figcaption><\/figure>\n

For one thing, this estimate is very conservative since it only takes into account penalties related to the Tobacco Control Act<\/a>.<\/p>\n

As for the Tobacco Tax Act<\/a>, which rules the important aspect of collecting and remitting taxes, the fine-setting mechanism is way too complex for us to come up with any sensible figure.<\/p>\n

Indeed, this piece of legislation provides that, depending on the quantities of tobacco seized and the assessment of previous illegal sales, the amount of the fine payable is $6,000 plus three to five times the amount of tobacco tax due<\/strong>.<\/a><\/p>\n

While we can’t estimate such figure, it would certainly be quite bulky, not to say astronomical.<\/p>\n

But, for the purpose of this estimate, we will content ourselves with that billion amount, the idea being to realize the severity of the fines with respect to the tobacco sale regulation.<\/p>\n

From\u00a0Smokin Guns<\/em>\u00a0to\u00a0Starbutts<\/em><\/h5>\n

To prepare this estimate, we paid a visit to a genuine Kahnawake smoke shack formerly known as “Smokin Guns”<\/em> but recently renamed to “Starbutts – Drive Thru”<\/em>.<\/p>\n

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Unless an illusion, the new Starbutts logo resembles quite a lot to the well-known Starbucks coffee chain.<\/figcaption><\/figure>\n

By putting ourselves in the shoes of an MSSS (Quebec Health Department) inspector, we scrutinized the smoke shack business practices against every section of the Quebec Tobacco Control Act<\/a>.<\/p>\n

Given the severity of the offenses found in the reserve and their long duration over time, we applied the maximum fine possible for every offense.<\/p>\n

This estimate – a first of its kind – is presented in the following summary table.<\/p>\n

\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\n\t
Violations to the Quebec Tobacco Control Act<\/center><\/th>
Section<\/center><\/th>
Fine<\/center><\/th>
Fine with fees<\/center><\/th>\n<\/tr>\n<\/thead>\n
Chapter II: Restriction on the use of tobacco<\/strong><\/td><\/td><\/td><\/td>\n<\/tr>\n
Lack of notices indicating that smoking is prohibited<\/td>
10<\/center><\/td>
$25,000<\/center><\/td>
$33,900<\/center><\/td>\n<\/tr>\n
Tolerating a smoker in the premises<\/td>
11<\/center><\/td>
$25,000<\/center><\/td>
$33,900<\/center><\/td>\n<\/tr>\n
Chapter III: Sale of tobacco, displays and signs<\/strong><\/td><\/td><\/td><\/td>\n<\/tr>\n
Selling tobacco to a minor (owner)<\/td>
13.1<\/center><\/td>
$125,000<\/center><\/td>
$159,900<\/center><\/td>\n<\/tr>\n
Selling tobacco to a minor (clerk)<\/td>
13.1<\/center><\/td>
$3,000<\/center><\/td>
$4,500<\/center><\/td>\n<\/tr>\n
Selling tobacco outdoor<\/td>
14.1<\/center><\/td>
$250,000<\/center><\/td>
$317,400<\/center><\/td>\n<\/tr>\n
Tobacco access without the help of an employee<\/td>
15<\/center><\/td>
$50,000<\/center><\/td>
$65,400<\/center><\/td>\n<\/tr>\n
Cigarette packs sold containing less than 20 sticks<\/td>
19<\/center><\/td>
$125,000<\/center><\/td>
$159,900<\/center><\/td>\n<\/tr>\n
No declaration to the business register<\/td>
20<\/center><\/td>
$50,000<\/center><\/td>
$65,400<\/center><\/td>\n<\/tr>\n
Tobacco display in public view<\/td>
20.2<\/center><\/td>
$50,000<\/center><\/td>
$65,400<\/center><\/td>\n<\/tr>\n
Tobacco display in public view from outdoor<\/td>
20.3<\/center><\/td>
$50,000<\/center><\/td>
$65,400<\/center><\/td>\n<\/tr>\n
No notices to indicate that selling tobacco to minors is prohibited<\/td>
20.4<\/center><\/td>
$50,000<\/center><\/td>
$65,400<\/center><\/td>\n<\/tr>\n
Distribute tobacco free of charge<\/td>
21<\/center><\/td>
$125,000<\/center><\/td>
$159,900<\/center><\/td>\n<\/tr>\n
Organize a promotional draw<\/td>
21<\/center><\/td>
$125,000<\/center><\/td>
$159,900<\/center><\/td>\n<\/tr>\n
Selling tobacco at a discount<\/td>
21<\/center><\/td>
$125,000<\/center><\/td>
$159,900<\/center><\/td>\n<\/tr>\n
Make tobacco advertising <\/td>
24.1<\/center><\/td>
$1,000,000<\/center><\/td>
$1,262,400<\/center><\/td>\n<\/tr>\n
Selling non compliant tobacco<\/td>
29<\/center><\/td>
$600,000<\/center><\/td>
$758,400<\/center><\/td>\n<\/tr>\n
Chapter V: Tobacco products<\/strong><\/td><\/td><\/td><\/td>\n<\/tr>\n
Selling tobacco with flavour<\/td>
29.2<\/center><\/td>
$250,000<\/center><\/td>
$317,400<\/center><\/td>\n<\/tr>\n
Hindering the duty of an inspector<\/td>
37<\/center><\/td>
$125,000<\/center><\/td>
$159,900<\/center><\/td>\n<\/tr>\n
Violations to advertising standards<\/td>
Regl. 2<\/center><\/td>
$500,000<\/center><\/td>
$632,400<\/center><\/td>\n<\/tr>\n<\/tbody>\n
<\/td>TOTAL<\/strong><\/right><\/th>
$3,653,000<\/strong><\/center><\/th>
$5,213,700<\/strong><\/center><\/th>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/p>\n
Some heavy fines for tobacco advertising<\/h5>\n

The first observation that stands out is that the Tobacco Act severely punishes tobacco advertising with a $1 million fine plus fees. This is the highest of the fines.<\/p>\n

Before even entering the premises, and everywhere on the reserve in fact, we are inundated by the presence of tobacco advertising posters that remind us of the commercial landscape some 30 years ago.<\/p>\n

\"\"<\/a>
“Fleur de Lys” and “Deerfield Blue” brand billboards were posted on the outside wall of the smoke shack, highly visible from Route 132. One of them was even accompanied by a message encouraging consumption (“NEW, Sensational”). This offense alone is punishable by a fine of up to $1.3 million including fees, and of course other fines related to violations of language laws as they must be French only.<\/figcaption><\/figure>\n
Tobacco gifts and promotions severely punished<\/h5>\n

Moreover, in addition to advertising, the smoke shack organizes a weekly $100 draw among its loyal clientele. This goes directly against section 21, which prohibits this kind of promotion and is punishable by a fine of up to $125,000 (which becomes $ 159,900 when you add the court fees and the contribution to the Fund for Victims of\u00a0Criminal Acts).<\/p>\n

\"\"<\/a>
These four raffle tickets for a weekly prize of $100 were given to us by the tobacco smoke shack to encourage us to come back and promote the tobacco sales. Imagine a depanneur doing the same! Unthinkable.<\/figcaption><\/figure>\n

Finally, to complete the marketing section, the store graciously provided us with a sample of tobacco containing 12 PlayFare’s brand menthol cigarettes, which represents three offenses in one fell swoop, namely:<\/p>\n