TORONTO, ON: The Canadian Taxpayers Federation (CTF) is calling on the Wynne government to halt the tobacco tax increases that were implemented on May 2, 2014 despite the Ontario Budget not passing. The tax hike was a component of the 2014 Budget, which was not supported in the House and yet was still implemented through a regulatory change ordered by Finance Minister Charles Sousa.
“This is a backdoor tax grab,” said CTF’s Ontario Director Candice Malcolm. “Last Thursday we were told this tax hike was a revenue tool component of Premier Wynne’s budget plan for transit. That plan was rejected by the opposition parties on Friday so there is absolutely no reason why this tax hike should be in place today.”
The $3.25 tax hike actually adds an additional $3.67 to a carton of cigarettes, since the HST is taxed on top of federal and Ontario tobacco taxes. That represents a 12 per cent tax hike.
“These tax hikes on tobacco are completely counter-productive anyway, since they merely drive consumers towards contraband tobacco products readily available on the black market in Ontario,” said Malcolm.
“Nearly two-thirds of the price of a carton of tobacco are taxes,” said Malcolm. “Hiking taxes for law-abiding smokers while looking the other way at illegal tobacco sales is terrible policy.”
“Tax evasion in tobacco costs taxpayers up to $1.1 billion in annual foregone revenues,” said Malcolm. “Why isn’t the government focusing attention on recouping that revenue?”
