Steve Arnold
The Hamilton Spectator
(Dec 7, 2009)
People stopped by police in August for buying illegal cigarettes on the Six Nations Reserve are getting an expensive surprise in the mail -- a fine and tax assessment of almost $575 for a single carton of untaxed cigarettes.
The notices, demanding immediate payment, are the province's latest tactic in a war on untaxed tobacco Ontario says costs it $500 million a year in lost revenue.
Nicole Robertson, of Dundas, is one of those people. She's now struggling to squeeze a penalty of nearly $650 out of her boyfriend's EI benefits after buying two cartons of illicit cigarettes.
"I make less than someone on welfare. It's just not fair for them to be doing this," Robertson said. "We didn't even know this was illegal."
She and her boyfriend Chris Christensen were stopped just outside the reserve Aug. 21 after paying $50 for two cartons of cigarettes that would have cost them $120 off the reserve.
Under Ontario's Tobacco Tax Act, it's illegal for non-natives to "buy, possess, or distribute any quantity of unmarked tobacco." Natives are exempt and in the last decade a thriving business has developed on reserves selling untaxed smokes.
During August and September the province responded to that issue with a campaign of stopping people as they left smoke shops, seizing the cigarettes and issuing warnings that fines and tax assessments could follow.
It's the "could follow" part that has taken people like Robertson by surprise.
"We were told we were being put on the warned list and the next time there would be a fine," she said. "We didn't hear anything more about it and then this arrived out of the blue."
The notice Robertson received from the Ontario Ministry of Revenue told her she was being fined $500 for a first offence and was being assessed three times the tax that would have been due on two cartons. At 12.35 cents per cigarette that all adds up to $648.20.
In an e-mail exchange Leslie Donaldson, press secretary for Ontario Revenue Minister John Wilkinson, said when the campaign started, "illegal product was seized and individuals were advised that an assessment may follow pursuant to the Tobacco Tax Act."
Under that act, "illegal" cigarettes are any package that isn't marked with Ontario's yellow tear-strip. Packages carrying the federal government's peach-coloured tear-strip are "unmarked cigarettes for Ontario purposes and are only permissible in Ontario under Ontario's First Nations cigarette allocation system."
The penalty assessments levied by the province can be challenged by filing a Notice of Objection with the Ministry of Revenue for a review of the assessment -- details are on the ministry's website.