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Friday, August 29, 2008

Feds “invests” $20 million to stop the unregulated trade in tobacco: Natives and the smoking poor disproportionately affected

When health related news is released by the Minister of National Revenue, you can be quite sure that revenue, and not health, is what is really at issue.

National Revenue Minister Gordon O'Connor today announced a $20 million “investment” over the next four years to “combat contraband tobacco and its damaging effects on the health of Canadians.”

Since contraband tobacco has no more “damaging effects on the health of Canadians” than taxed and regulated tobacco, my guess is that the “damaging effects” are on government revenues.

On July 31, Minister O'Connor announced that that he and the provinces had come to a settlement concerning tobacco smuggling. Imperial Tobacco and Rothmans, Benson & Hedges were forced to pay $1.15 billion to the governments in fines and civil settlements for their role in “aiding persons to sell or be in possession of tobacco products manufactured in Canada that were not packaged and were not stamped in conformity with the Excise Act and its amendments and the ministerial regulations,” between 1989 and 1994.

Yes, that’s right, tobacco companies were found guilty of selling tobacco without giving Gordon "Mad Dog" O'Connor and the Capital Hill gang a taste of the action.

This $20 million announcement is intended to put an end to this kind of unregulated commerce.

O'Connor said “Contraband tobacco negatively affects all Canadians and our Government is determined to fight the problem.”

But contraband tobacco doesn’t negatively affect all Canadians.  In fact, it positively affects low income smokers who can spend significantly less on tobacco and, thereby, spend significantly more on other priorities.

In his column “Support Native resistance,” libertarian scholar Pierre Lemieux wrote:

Cigarettes manufactured and sold on Native reserves are priced as low as $6 per carton. This compares to more than $65 elsewhere in the country, the outrageous legal prices being due to federal and provincial taxes....

It is thanks to the Natives that five or ten per cent of the population can purchase affordable cigarettes and that the smokers of legal cigarettes are not taxed even more....the Natives are helping to satisfy...consumer demands.

This Conservative crackdown on unregulated tobacco commerce is an attack on Natives and the smoking poor -- and it's a misallocation of law enforcement resources.

Posted by Matthew Johnston on August 29, 2008 in Crime | Permalink


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Moosehead Brewery used to give employees a 12 pack for Christmas, until Revenue Canada put a stop to it. There had been no tax collected on the free beer. They also had a free beer machine in the cafeteria. The pop machine was 25 cents.

Employees were not discouraged from drinking beer on the job, but were expected to stay upright. The brewery seemed to function well enough. Nowadays there'd be all hell to pay over safety concerns. They'd be shut down for encouraging alcoholism. The truth is the real issue is unpaid tax, then and now.

Posted by: dp | 2008-08-29 6:04:20 PM

This Conservative crackdown on unregulated tobacco commerce is an attack on Natives and the smoking poor -- and it's a misallocation of law enforcement resources.
Posted by Matthew Johnston on August 29, 2008

It will never happen. There's dozen's of cigarette stores on the Kahnawake reserve just south of Montreal. They also have a factory that makes them. If they try and stop it they'll have a war on their hands.

Posted by: The Stig | 2008-08-29 6:59:17 PM

Why don't the natives set up "safe" smoking sites? I mean, come on people have some empathy...It's a disease, and if Vancouver can do it, why not those on the "Rez"?

Posted by: Markalta | 2008-08-30 1:20:20 AM

...here's an idea, ban cigarettes from being in while tubes. Make them brown. Dirt brown, brown bag brown, crap brown.

I'm sure the original marketing move of being white gives one a sense of cleanliness.

Posted by: tomax7 | 2008-08-30 8:59:04 AM

Long live the nanny state. Government knows that we need constant guidence to maintain the pure standards set out for us. Has nothing to do with lost revenue. Think of the children.

Posted by: peterj | 2008-08-30 10:48:08 AM

Long live the nanny state. Government knows that we need constant guidence...

Posted by: peterj | 30-Aug-08 10:48:08 AM

Good Lord...a true Communist

Posted by: JC | 2008-08-30 11:09:35 AM

Because a policy disproportionately affects a group does not mean it is bad. Efforts to control crime also disproportionately affect the poor and First Nations, as do crackdowns on payday loan companies.

And Stig, why do you fear a war with First Nations? They didn't do very well first time round when both sides had muskets. Now the best that one side can hope for is a few AK-47s, whereas the other has tanks and bombers.

Posted by: Shane Matthews | 2008-08-30 11:17:12 AM

And Stig, why do you fear a war with First Nations?
Posted by: Shane Matthews | 30-Aug-08 11:17:12 AM

I don't.

Posted by: The Stig | 2008-08-30 3:33:30 PM

...here's an idea, ban cigarettes from being in while tubes. Make them brown. Dirt brown, brown bag brown, crap brown.
Posted by: tomax7 | 30-Aug-08 8:59:04 AM

You mean like .... cigars?

Posted by: The Stig | 2008-08-30 3:49:52 PM

These actions by the government against native trade are quite simply against "unregulated" trade. Meaning un "taxed". There are no ethics, and no morals involved whatsoever. Its a form of martial law against an identifiable group. It happens all the time in our country, but the victimized group isn't always so identifiable.
So if we stop and look at the broad picture...this isn't about natives. Its a furtherance of the governments war on free enterprise happening outside of the fascist loop.
Its just that simple.

Posted by: JC | 2008-08-30 4:19:20 PM

While I agree that this move is all about revenue, it's one case where I have to side with the government in protecting its tax base. Cigarette taxes do go to fund healthcare, after all, and so long as we have public healthcare foisted upon us, the people who buy unhealthy goods should subsidize the system as they are the most likely to use it in the long run.

If someone goes through the hassle and expense of growing tobacco for personal consumption, they shouldn't be interfered with, but consumption taxes on the sale of tobacco products are reasonable, in my opinion. There's nothing inherently wrong with efforts to stop people from cheating the system.

Posted by: Jeremy Maddock | 2008-08-30 4:28:05 PM

There's nothing inherently wrong with efforts to stop people from cheating the system.

Posted by: Jeremy Maddock | 30-Aug-08 4:28:05 PM

Provided, you agree with the system. The same one that robs us blind, squanders our money, forces third rate health care on us, makes laws of conrtrol, deprives us of the right to property or self defense, grants itself the right to do absolutely anything it wants to any of us at any time for any reason...
Yup, they need to protect their tax base alright. That's what pays for all those gifts.

Posted by: JC | 2008-08-30 4:34:05 PM

"Fascist war," JC? Please--cut the hyperbole. As I noted above, the fact that a policy disproportionately affects one group more than others is irrelevant, provided their rights are not being violated. You consider ANY form of government fascist, so I'm surprised you're not living off the grid in a militia camp somewhere.

Posted by: Shane Matthews | 2008-08-30 4:53:40 PM

No JC, I don't agree with any of those things. The government should do a lot less, in my opinion.

I respect the reality, however, that government needs to raise money to fulfill the very limited roles that are necessary (funding for basic education, protecting citizens from violent crime, paying for civil and criminal courts, etc.) I much prefer consumption taxes to income taxes as a way to pay for these things.

And so long as we have a public healthcare system swallowing up a large portion of our budget (which I never said I agreed with), I think it makes sense to impose disproportionate taxes on activities that are likely to burden the system with additional costs.

Smokers who want to buy private life/health insurance have to pay more. Why shouldn't smokers also pay more under the public system, based on the amount that they smoke?

Posted by: Jeremy Maddock | 2008-08-30 4:57:35 PM

Shane, fascism occurs when government makes itself partner and banker to business. In other words it is the North American business model.
Not to be confused with military fascism ie: Hitler and Mussolini. But its still fascism.
And not once did I say "Fascist War", those are your words, not mine. And no I don't consider "any" form of government fascist...just the fascist ones. :)

And Jeremy, fair enough. I take your points in perspective and pretty much agree with you.
Alternatively though, the tax system is basically one of unnaccountability, its extortion. I'd rather see user fees in place and one of them might be on tobacco.

Posted by: JC | 2008-08-30 5:13:58 PM

PS Jeremy,
I smoke and I've carried private health insurance for years now. When people ask me if I use the health care system I say no, I don't. I use the hospitals once in a blue moon and I carry my own insurance. The Province once threatened to take me to court because I refused to pay into the health care system. I said "see you there" and never heard another word about it.

Posted by: JC | 2008-08-30 5:19:25 PM

JC, Fascism is what the dictionary says it is, not what you say it is. The dictionary doesn't back you and neither do a majority of the North American people.

Furthermore, you described the government's "war" on unregulated free enterprise, at the same time calling the government fascist. Hence a fascist war.

Posted by: Shane Matthews | 2008-08-30 7:39:55 PM

Hey Shane, this is a bit of dialogue on fascism I came across while researching the subject.
I'd love to show more, but its already kind of long for this blog.

Broken down, Fascism includes these devices:

1.A government whose powers are unrestrained.
2.A leader who is a dictator, absolute in power but responsible to the party which is a preferred elite.
3.An economic system in which production and distribution are carried on by private owners but in accordance with plans made by the state directly or under its immediate supervision.
4.These plans involve control of all the instruments of production and distribution through great government bureaus which have the power to make regulations or directives with the force of law.
5.They involve also the comprehensive integration of government and private finances, under which investment is directed and regimented by the government, so that while ownership is private and production is carried on by private owners there is a type of socialization of investment, of the financial aspects of production. By this means the state, which by law and by regulation can exercise a powerful control over industry, can enormously expand and complete that control by assuming the role of banker and partner.
6.They involve also the device of creating streams of purchasing power by federal government borrowing and spending as a permanent institution.
7.As a necessary consequence of all this, militarism becomes an inevitable part of the system since it provides the easiest means of draining great numbers annually from the labor market and of creating a tremendous industry for the production of arms for defense, which industry is supported wholly by government borrowing and spending.
8.Imperialism becomes an essential element of such a system where that is possible — particularly in the strong states, since the whole fascist system, despite its promises of abundance, necessitates great financial and personal sacrifices, which people cannot be induced to make in the interest of the ordinary objectives of civil life and which they will submit to only when they are presented with some national crusade or adventure on the heroic model touching deeply the springs of chauvinistic pride, interest, and feeling.

Where these elements are found, there is fascism, by whatever name the system is called.

A dictionary definition is fine when looking for quick reference. But I don't think its necessarily the be all, end all bottom line. Which is why we have so many writings, which include encyclopedias and other learned works.
Heck if everything we needed to know was in the dictionary, they could just teach us to read and say your on your own, here's your dictionary. :)

Posted by: JC | 2008-08-30 8:17:39 PM

Well ... I don't like the government much and I don't care much for the Indians. I hate taxes.

The Government which I don't like and the Indians which I don't care much for are at each other throats.

Meanwhile the taxes aren't being paid and the low end smoker is catching a break.

I see this as a win-win situation. High entertainment value as well. Especially if they send in the allegedly corrupt Quebec provincial police and the hapless national guard.

Hey ... pretend countries, run by idiots can be fun.

Posted by: John V | 2008-08-30 11:32:48 PM

>>Long live the nanny state. Government knows that we need constant guidence...

Posted by: peterj | 30-Aug-08 10:48:08 AM

Good Lord...a true Communist

Posted by: JC | 30-Aug-08 11:09:35 AM<<

JC, sarcasm. Sarcasm, this is JC. I'm glad you two could finally meet; hopefully things will be less awkward in the future as a result.

Posted by: Janet | 2008-08-31 10:35:42 PM

LOL Too funny Janet. Keep on keepin on. :)

Posted by: JC | 2008-08-31 11:40:53 PM

JC, let’s consider your points one by one:

1. The power of NAGs (North American Governments) is not unrestrained; it is limited by the Constitution and the courts.

2. The President’s power is not absolute. He must be popularly elected and cannot dictate to Congress. He cannot even propose legislation on his own. The Prime Minister’s power is much greater but he still must stand for election and act within the limits imposed by the Constitution and the courts.

3. NAGs do not dictate economic strategy; they merely regulate to protect against abuses.

4. NAGs do not own or substantially control the means of wealth production.

5. This is only true of P3s (public-private partnerships). Almost no one is required to do business with an NAG apart from paying appropriate tax.

6. Because a government borrows money does not make it fascist.

7. America has a strong military and aggressively pursues its interests abroad, but that’s not the same as having a militaristic society, of which Germany and Japan during World War II are the quintessential examples. I’d like to see anyone even suggest that CANADA is a militaristic society.

8. Imperialism is not an attribute of fascism, and by the classical definition, America today is not imperialist. In fact, by the time the genuine fascist states emerged in the 1930s, imperialism was in retreat.

Sorry, JC, but these arguments don’t convince.

Posted by: Shane Matthews | 2008-09-01 12:29:04 AM

Sorry, JC, but these arguments don’t convince.

Posted by: Shane Matthews | 1-Sep-08 12:29:04 AM
Well, fair enough. Can't convince everybody.

I see these points a little differently then you do.

1. Although in law the power of the NAGs is not unrestrained (in fact law itself doesn't seem to restrain them by much anymore) it doesn't seem to stop them from doing whatever they like and either ignoring the courts or asking forgiveness (so to speak) later. Bush has made over 700 Constitutional challenges, and called the Constitution "just a damned piece of paper".

2.No the Presidents power is not absolute, yes he must answer to congress. Too bad Congressmen rarely even read any new legislation put before them before signing it. (another part of the system that's broken)

3. "They regulate to prevent abuses." What sort of abuses? The free market should do that by itself. The free market really doesn't require "regulation" In fact here is probably the closest thing to fascism (lite) that I can point to. Regulation is the very means of control I see as unnecessary. Its just the governments way of getting its piece of the pie. Governments have no business in free enterprise. Their job is merely to protect our rights and otherwise stay out of private life and private business.

4. I agree, NAGs do not own...
However they have attached themselves to the conduct of private business by way of regulation. If you want to do business, you must pay homage to government. That's where lobbyists come from.
I have trouble believing that the MP's and Congressmen can be completely objective with so many gifts waiting in the wings.

5.Here we have a fundamental difference in philosophies. I do not believe there is any such thing as an appropriate tax. I believe there should be "user fees" in place that would easily cover all necessary government funding while leaving income and profit money in the hands of those who actually generate the economy. Taxation by itself can be enough to deter many entrepeneurial ventures that might employ people.

6.The governments "borrowing" of money is the reason we have an (artificial) national debt.
A sum which we are rarely (or accurately) informed of and which is designed to never be paid off. Which led us to eternal taxation.
Overall, we are slaves to the state as far as our financial well being goes anyway.

7.The US has over the last 50 or 60 years been Empire Building like no one we've seen sinse the Romans. Usually on the premise of beating back communism or unseating a nasty dictator somewhere. Yet they seen absent somehow where there is no wealth to be had. ie: Robert Mugabe's Zimbabwe...a brutal dictator who is being ignored even though he is widely seen as an embodiment of evil. Idi Amin might be another example. Why? No Oil, maybe? Yet the US does support Saudi Arabia and Pakistan...both dictatorships. Again, why?
It is my impression that the good intentions of the US foreign policy are selective indeed and can not be attributed to any sense of nobility.

No Canada is not a militaristic society. And I'm very happy to see our military getting its teeth back. But I don't think we should be in Afganistan.
We're merely acting as one of the Roman empire's legions.

8.By the classical definition America is not Imperialist. maybe. But there is no doubt in my mind that they building an Empire. A "New World Order". I know that statement is too often attributed to Conspiracy Nuts. (nice label btw)
But when it comes straight from a President, its hard to ignore.

I may never convince you, and that's ok. But I'll keep working to educate folks about how far out of touch our system has gotten with Mr. and Mrs. Jones who are just trying to make a living.

have a good one.

Posted by: JC | 2008-09-01 8:53:09 AM

Thanks Janet....I thought JC's reply was too silly to reply . Not many bloggers here that don't recognise sarcasm.

Posted by: peterj | 2008-09-01 8:54:05 PM


1. Can you cite specific examples, or is this just a blanket statement you’re hoping I won’t possibly have time to check?

2. Lazy congressmen do not a fascist state make. The President is NOT an all-powerful dictator; hence no fascism.

3. Past abuses of early-20th-century capitalism include no minimum wage, no limit on the length of the working day, substandard safety conditions, armed strikebreakers, child labour, an unregulated stock market, no deposit insurance, no protection against brutal and ruthless monopolies, rampant corruption, and fraud on an epic scale. I understand your point, however most if not all of the above are already considered violation of someone’s rights; hence government involvement.

4. You may have trouble believing all MPs are completely objective, but how is a totally unrestrained free market, with its “life is a zero sum game” attitude, any more likely to bring enlightenment?

5. User fees / taxes, to-may-to / to-mah-to. Either way, the people pay. I do agree that consumption, not income, should be the focus of personal taxes.

6. It makes no sense to borrow money to accumulate massive debt and then charge taxes for it when the government could simply have dispensed with the bother and raised taxes to start with. The people don’t want taxes, but they want services, so the government of the day borrows money instead of taxing it, and leaves the interest to be paid by their successors. Sort of what the baby boomers did with their children and children’s children.

7. The U.S. currently has a few insignificant foreign protectorates (mostly small islands) that are relics from the age of the imperialism. They have no significant foreign landholdings. Supporting dictatorships is not the same as being fascist; you’re offering A as proof of B.

8. This is a rehash of point seven, subject to the same rebuttal.

Face it, JC; you overreached. No one, not even its enemies, seriously considers America fascist. Decadent, perhaps (and they have a point there), but not fascist.

Posted by: Shane Matthews | 2008-09-01 10:34:37 PM

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