Thank you, Mr. Chairman. Pertaining to the amendments to the Tobacco Tax Act, I agree that we definitely require amendments to the existing Tobacco Tax Act that we have. If Members are aware, there are provisions in the existing act to pay tax on even one cigarette. With this new amendment, there are changes in the new bill that require an exemption of up to 200 cigarettes.

Before I get into the contents of the bill itself, Mr. Chairman, I have a concern with regard to the overall strategy of the government. We are moving into the federal tax area. The Minister indicated that in his opening statement. He indicated in his opening statement why they were doing all of these amendments. I have no problem with that. The problem I have is that I don't feel comfortable moving 100 per cent into the federal tax area. Because of the federal government dropping their taxes on cigarettes, we are losing money for our own territorial revenue. I would have supported more so if we would have increased the revenue that we have lost, but not moving 100 per cent into the federal tax area. I indicated my concerns during the standing committee's review of this bill. But, if the majority want to move right back to where the prices were, I guess I have to go along with that. I'm not too comfortable moving all the way into the federal tax area.

Getting into the contents of the bill, Mr. Chairman, I agree with all the amendments that are being proposed, but I have a lot of concerns with the numbers that we see in front of us. For instance, although it is an improvement over the existing bill, I don't feel 200 cigarettes is adequate. Even though you're allowed to bring tobacco in from outside the territories six times a year under the amendment, tax-free, anything over 200 you have to start paying tax on, and you require a permit too. I also agree with all the rationale that my colleague from Nahendeh has raised about spiritual offerings and so forth. I agree that we do these types of things, giving tobacco to elders and so forth, or when you travel, people give you tobacco.

I agree the administration of the act has to be beefed up to curb smuggling, but I have some concerns about the fines that are being suggested. They are a little too steep for first offenders. To compromise with the Minister, what I would strongly suggest is that we increase the import amount, the non-taxable amount. Right now, you are saying that you are going to tax everything over 200 cigarettes. That's equivalent to one carton of cigarettes, Mr. Chairman. The packages have 25 cigarettes and there are eight in a carton. So, you are allowed to bring one carton into the territories before you're taxed. I don't think that's reasonable.

I know the legislation allows you to be able to do that six times a year but, Mr. Chairman, my constituents don't travel six times a year outside the territories to bring in tobacco. The majority of the time, they travel during the summer when most of them go on the pilgrimage to Alberta. I assume that's the only time they would buy cigarettes. Limiting them to one carton is not reasonable. I would say maybe five to ten cartons, but I would settle for a maximum of five cartons that would be exempt from being taxed.

I have a question about the permit requirement. I think we should exempt individuals who go south from requiring a permit before they even go out to buy cigarettes. I have concerns about that whole area, Mr. Chairman. On top of that, Mr. Chairman, I agree that we have to beef up the administration of the act. But the offences section of the act is very questionable. It is not reasonable. If we go, as I am suggesting, to a maximum of five cartons per individual that can be imported, that whole section would have to be revised too.

I feel the fines that are being proposed are a little too steep for first offenders, second offenders and so forth. I agree with the other sections of the administration side, especially to curb smuggling. I don't have a problem with that section. But, for individuals who use tobacco, either loose tobacco, cigarettes or cigars, that is who I'm concerned about. A lot of people travel back and forth. Those are the three main areas that I have concerns about.

I basically have no problem with the format of the bill and its contents, it is just the numbers that are being proposed in the legislation that I have a problem with.