Taxes

Smokers pay more in consumer taxes for their tobacco purchases than any other group - including motorists and drinkers. MyChoice.ca has identified taxes as a top issue as well as having smokers being treated as cash cows while at the same time being falsely labelled as a drain on health care.

Combined federal and provincial direct tobacco taxes on smokers have been used to increase government revenues by 75% in recent years – from a little under $4.4 billion in 2000-01 to almost $7.7 billion in 2004-05. This does not include an additional $1 billion in general sales taxes on tobacco products, nor does it take into account the federal and provincial tax hikes that have since been implemented. These record high tobacco revenues from smokers add up to about $9 billion a year. Health Canada estimates the cost of smoking to the heath care system as $3.5 billion to $4 billion a year. You do not have to be a math genius to work out that this leaves a surplus of around $5 billion a year that smokers pay in tobacco taxes to the health care system, before they even start handing over income taxes and health premiums.

While an official reason given for tax hikes is that they create a deterrent to smoking, the actual result is a cash grab to raise government revenues. Even anti-smoking groups admit this when they hold their closed-door conferences. A rare moment of honesty came during Federal Finance Minister Jim Flaherty’s 2006 budget announcement when he admitted he was raising tobacco taxes to pay for his government’s cut to the general GST rate. Governments also do not like to talk about the unintended consequeuces of excessive taxation polices such as the increase in illicit sales, the growth of organized crime and the impact on tobacco control policies, particularly when it comes to youth.

Positions

Canada’s adult smokers should have a say in the implementation of tax policies directed at them, and deserve the same consideration as any other group of taxpayers in terms of fairness and consequences. It is unreasonable that smokers receive so little in return for their tax dollars. Unlike anti-smoking lobby groups, smokers receive no tax dollars to help them become involved in government decision-making processes. Governments do not even provide financial help with the high cost of cessation products. Governments must be transparent in terms of the revenues they raise and accountable for the way in which they are spent.

• Publicize government account figures showing the true high levels of revenues received from smokers
• Act proactively and reactively to tax measures to promote fair taxation policies
• Campaign for a portion of the tobacco tax revenues smokers pay to governments to be used to help pay for the cost of cessation products and to fund smokers’ participation in the democratic process regarding actions directed against them
• Promote government accountability for the way tobacco tax revenues are spent

Taxes

Positions

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