Thank you, Madam Speaker. Good afternoon. Madam Speaker, I am announcing today measures that will hopefully protect government revenues and reinforce our government's commitment to promoting healthy lifestyles in the Northwest Territories.
The federal tobacco tax reduction of $5 per carton of cigarettes and 2.5 cents per gram of loose tobacco, announced last week, has reduced the selling prices of cigarettes and loose tobacco in the Northwest Territories. Since the territorial tobacco tax is based on taxable price, as determined in a quarterly survey of tobacco prices in Yellowknife, tobacco prices would fall again, by about $3 per carton of cigarettes, on April 1, under our existing tobacco tax legislation. That would result in Northwest Territories cigarette prices being more than $8 per carton lower than what they were before the federal tax cut. For our government, this tax reduction of $3 per carton would represent a significant amount of foregone revenues -- an estimated loss of $2 million in 1994-95.
Lower tobacco prices would lead to increased tobacco consumption by Northwest Territories residents. It is well established that tobacco products are a major cause of lung cancer, heart disease, emphysema and many other diseases. In the Northwest Territories, this is a major health concern because our per capita tobacco consumption is generally higher than in the rest of Canada. Nonetheless, over the past few years, progress has been made in reducing tobacco consumption. By imposing relatively high tobacco tax rates together with health awareness programs carried out by the Department of Health, per capita consumption of cigarettes in the Northwest Territories has fallen by over 20 per cent over the past five years. We cannot allow the progress we have made to be reversed.
I am, therefore, proposing to bring forward legislation in this House that will:
-increase the tax on cigarettes; and,
-increase the tax on loose tobacco products by a corresponding amount.
Because this measure will increase the differentials between Northwest Territories tobacco prices and those in Quebec, Ontario and New Brunswick, it is necessary that we take additional actions in the area of enforcement.
Under the existing Northwest Territories Tobacco Tax Act, individuals importing tobacco products into the Northwest Territories from other jurisdictions, whether for personal use or resale, must report to the Department of Finance and pay the territorial tax. I have been meeting with the RCMP to discuss ways of ensuring maximum compliance with this provision of the act.
As a further measure to prevent smuggling, I intend to bring forward legislation to this House to assist in the enforcement of the Tobacco Tax Act. This legislation will include increased penalties for non-compliance with the act.
Madam Speaker, in conjunction with the federal anti-smuggling awareness campaign, the Department of Health will be enhancing its own health awareness programs warning residents of the dangers of smoking. It is a well-known fact that individuals who become smokers usually acquire the habit and become addicted as teenagers or as young adults. Our campaign will therefore be aimed primarily at the youth population of the Northwest Territories.
The federal government has announced certain legislative measures regarding the sale of tobacco to young persons. It has outlawed the sale of small "kiddy" packs of cigarettes and it has raised the minimum age for purchasing tobacco products from 16 to 18 years. Madam Speaker, I am proposing that we go one step further and bring forward legislation to this House that will raise the minimum age for purchasing tobacco products in the Northwest Territories from 18 to 19 years. Five Canadian provinces have already raised the minimum age to 19 years. It would also be the same minimum age at which persons can be served liquor at bars and other licensed premises in the Northwest Territories.
I also wish to consider bringing forward legislation that would enable us to withdraw the tobacco vendor's license of any retailer convicted of selling tobacco to minors. Under current legislation, we can withdraw the licenses of retailers convicted for tax-related offenses under the Tobacco Tax Act.
Madam Speaker, we will also be joining forces with the Yukon and the provinces of Manitoba, Saskatchewan, Alberta and British Columbia in controlling smuggling. We will prepare a coordinated strategy which will include a review of the following options:
- increased investigations and audit activity;
- increased cooperation between provincial/territorial officials, police forces and the RCMP;
- legislation to require tobacco manufacturers to mark tobacco products;
- increased information sharing in areas such as tobacco imports and exports in order to ensure proper accounting to tobacco movements;
- sharing of resources;
- ensuring that the federal government allocate a fair share of incremental federal audit and enforcement resources to the territories and the western provinces; and,
- increased dissemination of information to retailers and consumers on the requirement that they pay tax on their tobacco imports.
Madam Speaker, the measures I have announced today will protect government revenues and discourage contraband in tobacco products. Above all, they represent a significant enhancement of our government's health awareness program. I am confident that residents will be responsive to this program and that the successes we have had in reducing tobacco consumption will continue. Thank you, Madam Speaker.
---Applause