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Tuesday, October 05, 2010

Smoke Signals

The tobacco industry is flourishing in one part of Canada:

But on reserves grown accustomed to poverty, the factories are the heart of a solidly entrenched economic powerhouse, broadly supported and responsible for new mansions, nice cars and general financial wellbeing. In a striking reflection of the complex relationship between non-native governments and First Nations, they are often allowed to operate with virtual impunity.

“I look at the tobacco industry as the basis for a diversified economy for the Six Nations,” said Bill Montour, elected chief of that community. “We want to be part of this whole idea called Canada, but we’re not going to be coerced into saying ‘Well, you’ve got to do it this way.’ ”

Edna Holyome, who owns a smoke shop at Six Nations that sells those locally made cigarettes, puts it more simply. “Tobacco,” she said, “is our natural resource.”

It seems that non-aboriginal farmers, and non-aboriginal paper and filter manufacturers, are supplying the burgeoning reserve based cigarette industry. A clandestine distribution network stretches across the country. The smokes are dirt cheap and basically illegal. They are also pretty easy to obtain in Toronto. My smoker friends attest to their quality, not top-notch, but not awful either. 

Canada's aboriginals, or at least their representatives, describe themselves as "First Nations." It's a slight misnomer, as the pre-Columbian natives of North America had no conception of a European style nation state. They were stone-age level tribes. What is clear is that their descendants became the first North American victims of welfare dependency. 

Finding the various aboriginal tribes inconvenient to development, the various colonial governments of Canada packed the lot off to reserves, and bribed them into acquiescence with what amount to a crude - and parsimonious - welfare state. The occasional show of force, courtesy of the Mounties, deterred any thought of a general rising. 

The well known pattern of alcoholism, violence, unemployment and despair followed in time. White Man's Guilt kept the welfare spigot open. An increasingly savvy aboriginal leadership exploited that guilt, and the reserve system's authoritarian political culture, to entrench themselves in power. Any criticism by non-aboriginals of these corrupt arrangements was denounced as racism or imperialism, a trick that has also worked well for various African kleptocrats. Aboriginals who demanded accountability from their governments faced accusations of selling out, threats or attempts at co-option. 

While licensed aboriginal cigarette manufacturers exist, they have been eclipsed in recent years by their black market rivals. The emergence of this very successful industry presents problems. Since most of the money flows under the table, no one can be completely sure whether or not organized crime is involved, or if this is just the CRA not getting its cut. For the federal government there is also something worse than the loss of revenue, it is fear.

The various treaties negotiated between the Crown, and the aboriginal tribes, accorded the latter a sort of autonomy. Given the problematic history of those treaties, and their implementation, modern governments have been loath to meddle too much in the reserves' internal affairs. Thus the silence that has greeted repeated warnings from aboriginal leaders, including the Grand Chief of Akwesasne, that hikes in tobacco taxes would spur the development of smuggling, and lately a black market industry. 

Through a loophole created by historical accident, legal ambiguity and modern political correctness, a small cadre of entrepreneurs have brought prosperity to themselves and their community. For the Canadian Left this presents an insoluble dilemma. Tobacco is the symbol of the death-peddling capitalist system, yet a black market tobacco industry has genuinely helped a bona-fide marginalized group. A consistent fight against tobacco would lead the government, and its statist boosters in the media, into trying to manage internal tribal affairs. Health care nanny statism versus cries of neo-imperialism. Enjoy the irony. 

It's unfair that some aboriginals have gotten away with actions that, had they been committed by non-aboriginals, would have put the latter in jail. That's not the fault of the aboriginal businessmen, who are giving the Sudbury salute to the CRA and Health Canada. The unfairness lies in the punitive taxation of cigarettes, and in the campaign by governments across Canada against adults making adult decision. Marx predicted that the contradictions inherent in capitalism would destroy it. No such luck. But the contradictions inherent in modern statism, in particular between political correctness and health care fascism, might just lead to the subversion, if not the destruction of the Canadian Leviathan. 

Posted by Richard Anderson on October 5, 2010 | Permalink


More power to them, since they are actually practising free enterprise instead of following the herd and blindly accepting government interference in their lives and excessive regulations.

Posted by: Alain | 2010-10-05 1:46:36 PM

I can't comment on western Canada, but in eastern Canada almost all "native" made cigarettes have a single point of origin, the Akwesasne reserve in New York state, which is just across the St. Lawrence from Cornwall Ont. The cigarettes from Akwesasne are smuggled to an Indian reserve near Cornwall and from there distributed throughout eastern Canada. The Americans have just as big a problem with these cigarettes being shipped to NY, Boston, Philadelphia as does Canada. On both sides of the border it's been long believed that it's actually organized crime that controls both the manufacture and distribution of those cigarettes and not the natives.

Posted by: The Stig | 2010-10-05 2:25:20 PM

The Akwesasne Reserve seems to be a source of more than a few problems. While not taxing Indians (Yep, I call them Indians.) has considerable value, (That is a example by which we should all aspire to live up to, and our governments to accomplish -- or else.) First Nations entrepreneurialism has gone the way of drug trafficking. And I suspect they are armed to the teeth as well. The only reasonable response to this is end tobacco taxes, save for those tacked on at the cash register. (Never, ever tax income.) This will leave them with no advantage over other producers. Hell, it may cause them to improve their product, or drive them out of business. As for increasing cigarette consumption and the high risks associated with it, isn't it time we started reducing instead of growing our population? Besides, killing off people who have been warned time and time again the hazards of smoking cannot be considered a bad thing.

Posted by: AB Patriot | 2010-10-05 3:04:04 PM

This is how we win back our freedoms-guerrilla style. We use whatever tools we can to undermine the TOTAL STATE. Without money/power, it doesn't matter who's in charge, they have to change.

Posted by: Cytotoxic | 2010-10-05 8:25:44 PM

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