Lawmakers in Ontario and Alberta are setting a new national standard in the fight against contraband tobacco, introducing tougher enforcement measures and penalties for illicit trade, that highlight provincial leadership and put pressure on the federal government to act.
Contraband tobacco is more than a nuisance — it’s an epidemic that is stealing tax dollars and targeting young people. According to the Government of Ontario, illegal tobacco accounts for nearly half of the provincial market, costing taxpayers between $990 million and $1.7 billion in lost revenue from 2019 to 2022. In Alberta, government figures show contraband makes up about 29 percent of the market, draining $102 million in 2023 alone.
Law enforcement agencies emphasize that the issue goes far beyond lost tax dollars. The RCMP estimates that 175 organized crime groups are involved in the contraband tobacco trade, often using profits to fund other criminal activities. Seizures across Canada have uncovered not only cigarettes but also cocaine, fentanyl, and firearms, underscoring the broader public safety risks.
Both provinces have introduced new measures to combat the problem:
• Alberta has added two new administrative penalties under the Tobacco Tax Act targeting the purchase, storage, and sale of contraband tobacco. The province also now requires all enforcement agencies to report seizures, ensuring consistent data collection and intelligence‑driven enforcement.
• Ontario has expanded enforcement capacity through the Keeping Criminals Behind Bars Act, increasing the number of officers authorized to enforce the Tobacco Tax Act. The province is also strengthening collaboration with law enforcement, stakeholders, and First Nations partners, while reviewing authorities and potential amendments to give police officers the tools they need for timely roadside searches of suspected contraband tobacco.
Alberta Finance Minister Nate Horner underscored the stakes saying, “Contraband tobacco not only undermines public health and makes tobacco more available for minors, it creates unfair competition for legal retailers and diminishes revenue that funds the programs and services Albertans rely on.” His comments were supported by Edmonton Police Superintendent Robinder Gill, who added, “Illegal trafficking of tobacco products has become a multi‑billion‑dollar industry nationwide and has been growing significantly since 2019. Central to this underground industry are organized crime groups… drawn to the product due to its low risk and high reward.”
The Ontario government emphasized a similar theme in the organized crime link in its Keeping Criminals Behind Bars Act announcement which states that, “Ontario’s contraband tobacco trade is controlled by organized criminal gangs, who use the profits to fund other dangerous illegal activities. It is vital for the safety of our communities that the Government continue to aggressively target these criminal organizations with targeted enforcement, significant fines, and better public awareness of the issue.”
Industry stakeholders also weighed in. Eric Gagnon, Vice President of Corporate and Regulatory Affairs at Imperial Tobacco Canada, said that, “Ontario and Alberta have shown real leadership in tackling contraband tobacco. These measures are a critical first step to protecting communities, especially young people, and reducing the influence of organized crime.”
Contraband tobacco isn’t just about cheaper cigarettes. It undermines legitimate retailers, deprives governments of revenue for essential services, and fuels organized crime.
• Lost Revenue: Ontario loses up to $1.7 billion over three years; Alberta lost $102 million in 2023.
• Organized Crime: The RCMP links contraband to 175 criminal groups nationwide.
• Public Safety Risks: Seizures often include narcotics and weapons alongside illegal tobacco.
• Youth Access: Cheap, unregulated products make it easier for young people to bypass age restrictions and health warnings.
Despite provincial progress, Ottawa has been largely silent on contraband tobacco since 2015. Both Ontario and Alberta have urged the federal government to take action, particularly on online sales of illicit tobacco, vapes, and nicotine pouches, which fall outside provincial jurisdiction.
Stakeholders emphasize that federal coordination is the missing piece to amplify the gains already achieved in Ontario and Alberta. National leadership could build on provincial successes by addressing enforcement gaps across borders and online sales, ensuring that lost revenues are recovered and communities are better protected. The groundwork laid by Alberta and Ontario has created the conditions for Ottawa to expand these efforts into a comprehensive, country‑wide strategy that reduces the influence of organized crime.
The contraband tobacco trade is far from harmless. It finances organized crime, undermines legitimate businesses, and exposes youth to unregulated products. With Ontario and Alberta driving progress, the momentum is clear: provincial action is making a measurable difference.
Policing and industry experts say it’s time that the federal government gets involved in order to transform these regional advances into a unified national framework — one that strengthens enforcement, safeguards communities, and secures billions in revenue for public services.
Photo: iStock
