Simon Kang got some surprise visitors at his Victoria Street convenience store Monday morning.
Two tobacco tax inspectors wearing police-like uniforms made the routine visit as part of Ontario's mandate to ensure only permitted products are being sold in stores. The growing counterfeit cigarette trade is threatening the more than $1-billion revenue stream the government sees from tobacco taxes every year.
And, although the visit caught Kang off guard -- he said he has never seen a tobacco inspector in the 18 years he has owned Victoria Convenience -- he said he understood the purpose of the visit.
"They're just doing their job," he said, as the inspectors logged his inventory and sent him fishing for receipts.
The inspection took about half an hour. They took notes on the cigarettes stored inside the white cabinet behind the counter. Kang provided receipts for some of them. Inspectors told him he would have 30 business days to find the receipts he couldn't immediately provide, or else face a fine. But Kane wasn't worried. He said he only purchases tobacco from major distributors and keeps all the receipts. And all his products are legal, he said.
"I don't take no-name cigars," he told the inspectors.
The inspectors declined an interview, saying their employer doesn't allow them to speak to media.
But an Ontario Ministry of Revenue spokesman said the visit was a "routine" and random inspection, as part of a crackdown that has always existed, but intensified around 2003.
"Revenue staff actually conduct an average of 600 of these inspections every month, right across the province," said Scott Blodgett, speaking from Queen's Park.
He said tobacco inspectors have two initiatives when they visit a store.
"One is to educate the retailer and to ensure compliance with the Tobacco Tax Act, so inspectors will check for untaxed tobacco products," he said. "They're also there to explain to retailers the distribution channels in place for tobacco, to ensure retailers are purchasing products from legitimate sources."
While the inspection process may have seemed new to Kang, Blodgett pointed out that it was likely just a coincidence his store had never seen a inspection in 18 years.
The inspections are random, he said. He declined to comment on whether more will take place in Belleville in the coming days.
But he said the inspections are important because the counterfeit trade seems to be growing and more illegal products are getting into stores and being sold tax-free.
"Contraband cigarette seizures by investigators and inspection staff in 2007-2008 increased threefold from the previous year." Blodgett said the Ministry of Revenue is concerned about what the trade could do to the province's tax base if it continues to grow.
The province received $1.12 billion in revenue from tobacco sales at Ontario stores in the 2007-08 fiscal year, he said, citing the provincial budget.
The province is expecting $1.092 billion in revenue from tobacco taxes from 2008-09, he added.
Victoria Convenience isn't the only convenience store that has been subject to an inspection.
An employee of the Super Duper on Bridge Street West said inspectors visited his store a couple of months ago to ensure that no counterfeit cigarettes were being sold.
But the man, who wouldn't give his name, said the store didn't mind having them there.
"We understand the purpose of it," he said. "We say, 'Eat your heart out.'"
Henry Cho, the owner of Bayview Express on Dundas Street East, said his store has not been inspected recently, but he did receive a visit from tobacco inspectors about a year ago.
He, too, said he didn't mind letting them inside.
"It's just regular checking." he