From: The Public Policy & Governance Review
Robert St. Pierre
In my younger years, I can remember travelling with a friend of mine to a Six Nations Reserve in Ontario to make a specific purchase. My friend was an avid smoker on a tight budget, and had been tipped off about a place where he could buy a large quantity of name brand cigarettes on the cheap. At the time, I thought little of this – it was just like any other bargain-hunting trip. When we got there, I waited patiently in the car while he went in to make the purchase, and my jaw dropped in astonishment upon seeing him strut back to the vehicle. He was carrying a couple of cartons, each containing 200 cigarettes. I understood that nicotine was addictive, but to the point that one person had to buy that many cigarettes at once? I asked him as much when he sat back down in the driver’s seat. He smiled wryly, saying something to the effect of the means justifying the ends in this scenario.
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The Allocation System has contributed to the emergence of First Nations’ manufactured cigarettes and counterfeit “yellow-stamp” markets
For First Nations’ economic development, interaction with non-First Nations consumers is necessary. In part due to the imposition of the allocation system, some reserves have begun manufacturing their own cigarettes with the hopes of being able to sell these products to non-First Nations consumers. However, this business opportunity was quickly quashed by federal government in omnibus bill c-10, the infamous Safe Streets and Communities Act that also introduced mandatory minimum sentencing and received royal assent in 2014. Having tobacco products going untaxed by federal and/or provincial governments is certainly not amenable for health policy in the country, and some expressed concerns for – and perhaps overstated anxieties that – such manufacturers might be linked to organized crime. Another practice that has proliferated in part due to the allocation system is the practice of counterfeit yellow stamps being put onto either allocation or contraband cigarettes. Yellow stamps denote that all provincial and federal excise taxes have been paid, meaning non- First nations consumers can transport them around without wrapping them in a towel and keeping them hidden from police under the driver’s seat in their car. With both of these practices, the allocation review finds that participants are being motivated by the lure of black market opportunities because of the restrictions that the allocation system places on economic opportunity for First Nations’ retailers and entrepreneurs.
