News release

Province Backs Measures to Stop Smuggling

Service Nova Scotia and Municipal Relations (Oct. 2000 - March 2014)

SERVICE N.S./MUNICIPAL RELATIONS--Province Backs Measures to Stop Smuggling


The province’s new tobacco fines are stiff enough to help butt out tobacco smuggling, according to Angus MacIsaac, Minister of Service Nova Scotia and Municipal Relations. His department houses the Provincial Tax Commission.

The new fine structure, proposed under amendments to the Financial Measures Act last week, is in response to a 1998 Provincial Court ruling that struck down penalties outlined in the current legislation as a violation of the Charter of Rights and Freedoms. This decision had the effect of leaving no legislated fine structure in place. Fines for tobacco smuggling continue to be imposed by the courts, but are not based on any legislated criteria and have resulted in great inconsistency across the province.

"There are three components to the new structure -- fines for smuggling, penalties for tax evasion and imprisonment on defaulted payments," said Mr. MacIsaac. "Make no mistake, we are targeting those who deal in the illegal tobacco trade with hefty, enforceable penalties."

The new fines follow a graduated structure that increases with the quantity of tobacco smuggled and whether it is a first or subsequent conviction.

In addition to court fines, anyone caught with illegal tobacco must pay a tax evasion penalty, which is equal to three times what the taxes would have been had the tobacco been sold to taxable consumers. For example, the tax on 50 cartons of cigarettes is $677, making the penalty $2,031 on top of the court-imposed fine. This fine is in addition to federally imposed fines.

A first conviction for smuggling 50 cartons of cigarettes or less carries a fine of $500 to $2,500 plus the tax evasion penalty. Defaulted payments results in up to 90 days'' imprisonment.

A first conviction involving 50 cartons of cigarettes or more carries a fine of $2,500 to $25,000 plus the tax evasion penalty. Defaulted payments carry up to 180 days'' imprisonment.

Subsequent convictions, regardless of amount, carry fines between $5,000 and $50,000, plus the tax evasion penalty. Defaulted payments result in a prison term of up to one year.

Fines under the old structure ranged from $10,000 to $50,000 plus an amount equal to the tax on the quantities involved.