Contraband cigarettes impacting tax dollars according to new report

Illegal cigarettes in Manitoba are taking a big chunk out of the market.

A new report estimates 45 per cent of tobacco sales in the province are contraband, which is costing taxpayers around $60 million a year.

According to several people CTV News spoke with on Winnipeg streets Wednesday, cost is a major factor. A regular pack can cost $20 or more, while some people say they can find cigarettes for as little as $5.

Winnipeg Crime Stoppers Board Chair Robert MacKenzie said odds are those smokes are illegal and are widely available.

"A lot of these cigarettes coming in are counterfeit cigarettes, and they look exactly like a real pack of cigarettes," said MacKenzie.

According to the report, it appears the trend of contraband cigarettes has been a problem for some time.

Between 2019 and 2023, the report said the legal sale of cigarettes has fallen by more than 33 per cent.

Manitoba Finance said it has dedicated resources to fight the illegal tobacco problem and is working with other provinces.

"The province is actively working with its partners in law enforcement, including the RCMP, to address illegal tobacco sales," a spokesperson said in an emailed statement.

MacKenzie said this is a billion-dollar problem across Canada, noting the illegal market takes money away from the health-care budget while funding organized crime.

"There's been millions and millions of dollars in contraband tobacco seized, and during these seizures, there's also illicit drugs, firearms, cash."

He also said there is a safety issue with the contraband smokes – legal cigarettes have an additive to make sure they go out when they're not being used, unlike the illegal ones.

"We conducted a test just to see, and the contraband cigarettes don't have that additive. So if you drop that same cigarette in your house, there's a good chance that you're going to burn your house down."

The report notes a legal carton of 200 cigarettes can cost between $140 and $178, compared to $40 to $50 for the contraband version.