Grant: Project Grant

Tobacco use is the leading cause of preventable death and illness in Canada. There is overwhelming Canadian and international evidence that increases in tobacco taxes reduce tobacco use, save lives and increase government tax revenue. However, high taxes create an incentive for tobacco users, manufacturers and others, most notably criminal networks, to devise ways to avoid or evade tobacco taxes. From the mid-2000s, the effectiveness of tobacco tax policies in Canada has been hampered by the emergence of discount brands and the resurgence of contraband cigarettes, most notably in Ontario and Québec. The illegal nature of cigarette tax evasion makes it intrinsically difficult to measure accurately. The scattered and at times conflicting estimates combined with the tobacco industry's narrative that cigarette contraband has been increasing in recent years and that any changes in policies such as tax increases or plain packaging will inevitably lead to large increases in cigarette tax evasion warrant a more systematic, transparent and timely approach to examine cigarette contraband in Canada. We have three research objectives. Our first objective is to estimate the magnitude of and temporal changes in cigarette tax evasion. Our second objective is to use the estimates of cigarette tax evasion constructed in objective 1 to study the relationship between cigarette tax evasion and cigarette prices (licit and illicit) and policy changes. Our third objective is to explore smokers' motivations for purchasing contraband cigarettes through an embedded qualitative study. Overall, this research has the potential to make important contributions to the evidence base on pricing and taxing policies to inform regulatory developments. Understanding the burden of cigarette tax evasion in Canada is critical for improving public health interventions and reducing the burden of tobacco-related disease in Canada.