Native cigarettes are now a problem for Western provinces, too

Tax-free have long been a big business in Ontario and Quebec

by Colby Cosh

Trouble at the smoke shack tax-free native cigarettes, a big business in Ontario and Quebec, are now a problem for Western provinces, too

Tim Smith/Brandon Sun

Chief Frank Brown of the Canupawakpa Dakota Nation doesn’t smoke, but he swears by the Mohawk-manufactured cigarettes on sale at the Dakota Chundee Smoke Shack near Pipestone, Man. “We did our research and the provincial [name brand] cigarettes have a lot of chemicals in them,” he says. “We think our smokes don’t have the cancer that the province’s cigarettes do.”

Whatever the supposed health claims put forth by Brown, the Manitoba government isn’t listening. In mid-November, officials seized 90,000 contraband cigarettes, which were not authorized for sale in the province. The next day, Dakota Chundee, which doesn’t sit on reserve land, was open again, crowded with non-Aboriginal buyers.

The raid, and subsequent reopening of the smoke shack, is the latest in a growing frontier war between First Nations and western provincial governments. Unlike in Ontario and Quebec, where the booming Indian tobacco business has also been linked to gangs, not to mention billions in lost taxes, Indian cigarette sales haven’t been an issue in the West. That’s changing as western bands turn to smokes to not only fill their coffers, but to assert land claims, too.

Last year, Kahnawake Mohawk-owned Rainbow Tobacco Co., which is based in Quebec and is the best-known native-owned tobacco manufacturer, announced a new western marketing offensive, entering into talks with various Prairie bands and touting the economic benefits of selling tax-free cigarettes. With these native-manufactured cigarettes there is no question of “smuggling” per se, since the smokes are licensed for on-reserve sale by the federal Customs and Revenue Agency.

It’s at the provincial level where the line between contraband and legal native cigarettes gets problematic. The provincial tax treatment of tobacco sold on-reserve varies from province to province, but the federal Indian Act says that provinces cannot tax “the personal property of an Indian or a band situated on a reserve,” thus requiring courts to make tricky ontological decisions about the definitions of “personal property” and “situated.” In April, Alberta Gaming and Liquor Commission officials seized 16 million cigarettes from a Quonset hut on the reserve of the Montana First Nation in Hobbema, Alta. The seized cigarettes were Rainbow Tobacco brands, and Rainbow CEO Rob Dickson claims that he had not yet been paid for them. His case is before a court in Wetaskiwin, Alta., where he claims the cigarettes were intended for sale to other First Nations in Alberta and that the Indian Act trumps the provincial Tobacco Tax Act. Smaller amounts of Rainbow Tobacco cigarettes have also been seized in B.C. and Saskatchewan.

The situation in Manitoba is even more complicated. The language of the Indian Act exemption might not apply to the off-reserve Dakota Chundee Smoke Shop, but Chief Brown points out that the treaty status of the Dakota is in question; the Dakota claim historic roots on both sides of the international border, but were considered refugees from American power by the British government of the 19th century. “We consider ourselves a sovereign nation that made a military, economic and trade alliance, as equals, with the British,” he says. Later Canadian treaties do not include the Dakota at all, he adds.

The federal government is staying out of the fights, even though cheap cigarettes take away the main leverage governments have to reduce tobacco use: taxes. Manitoba’s provincial tax on cigarettes is a whopping $45 a carton.

Those who have the most at stake may be non-Aboriginal mainstream retailers, whose National Coalition Against Contraband Tobacco says adventurous Indian vendors are on the same legal and ethical footing as smugglers. “Imagine how the typical convenience store owner feels about this—a Canadian, very often a new Canadian, who works 12 hours a day and lives in fear that a government ‘secret shopper’ might catch him selling cigarettes to a minor,” says NCACT spokesman Gary Grant. “We support the Manitoba government in putting a stop to what, according to the law in Manitoba, is illegal.”




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Native cigarettes are now a problem for Western provinces, too

  1. I don’t smoke but do enjoy the odd brew (or six).
    Perhaps the Natives could go into the beer biz.
    The thought of paying $10 for twelve of Molson’s finest warms my heart.

  2. There are a number of serious concerns, in order of severity from lowest to highest:

    1. evasion of taxes

    2. natives becoming involved in crime, instead of legitimate business

    3. availability of tobacco to minors.

  3. How unfortunate that an award winning national magazine like Macleans approached this subject from an entirely bias view. The headline alone shows that the editors at Macleans do not understand the complexity of the issue. One wonders why the headline did not read “Politicans being swayed by private interest groups in move to stomp out First Nations Entrepreneurship.”  The only thing that is happening here is First Nations have found an ecoomic development venue. They are the only “Canadians” manufacturing tobacco products in the country that claim made in Canada. Instead you chose to support  a group with vested interest, who are simply not selling as many cigarettes as they have in the past, and international companies who have pulled out of Canada and taken the jobs with them to Mexico,  instead of looking at the manufacture of tobacco products as an economic development project in First Nations communities that are putting First Nations people to work and generating income . Instead the article feeds into the mass hysteria that surrounds any attempt by a First Nations person to move ahead of mainstread Canada. Only in Canada will you find a govenment that provided economic development for First Nations in the 1990s, but only if they did not engage in any kind of business or industry that competed with their neghbours.
     Only in Canada will you find a government that funnels economic development into communities surrounding First Nations communities turning First Nation communities into service communities and forcing their people to drive out of their communities to buy goods and services that keep surrounding communities prosperous. How unfortunate Macleans did not bother to look at what is “contraband” and what is not. First Nations are legally producing products under federal licenses. They are located in federal territories. They are not selling theri products anywhere but in First Nation communities. If the provinces have issues with that, the provinces should be negotiating with First Nations not launching feeble lawsuits they know wastes taxpayers dollars and that they will lose.
    It is the provinces that have refused to provide First Nations with licenses needed to sell their products in corner stores. How unfortunate your writers did not explore why the provinces, in particular Ontario and Quebec have refused to license First Natios manufacturers to sell their products in corner stores. Guaranteed if that happened you would see the National Coalition Against “Contraband” Tobacco, disappear. They exist only to line their own products with tobacco sales.
     How unfortuante Macleans didn’t bother to look at the issue from all perspectives.

    • Particularly when you compare the issue to something like, say, Asbestos.  You can forget about the health concerns talking points after the international stand we recently took on this other file.

      I’m having a bit of a hard time with the taxes argument, as well, when you remember the subsidies to oil companies.

      So, really, I’m left with the fact that these are First Nations entrepreneurs.  I watched The Cat in the Hat’s The Sneetches yesterday, and it seems to me our governments are requiring the Single Star–right up until the Single Star is passe.

    • Hi Turtle Island News…Your comment about the cigarettes only being sold on Native Lands is true…but you also sell to non-natives as well in abundance. I happen to know many non-natives who buy the bags of smokes as they are Cheaper than buying the non-native produced cigarettes. So …Entrepreneurship, YES….but being totally honest…NO!

  4. Only 1 Thing I can say …………….HA! HA! HA! HA! This is absolutley hilarious

  5. now why are the “indians” not being called “aboriginals” in this newspaper article???

  6. The Dakota Chundee Smoke Shop is legal as are the cigarettes.  The province wants us to charge you 8.00 a pack in taxes and give this to them.  In return we get protection from the provincial tax squads.  Isnt this what organized crime is?  Offering protection rackets?  When we purchased the land, the province didn’t provide a dime.  When we hired staff, the province didn’t provide a dime.  When we pay our overhead, the province doesn’t pay a dime.  When we pay for the inventory, the province doesn’t pay a dime.  So to recap, the province does absolutely nothing but expects us to charge you 8.00 a pack, keep detailed records of every transaction, submit reciepts, pay the 8.00 per pack profit to them.  Yeah right.  What kind of world do you think we live in.

  7. Capitalism 101. So leave them alone.

  8. Does anyone think about where they get the raw leaf ? Mostly from illegal sales from tobacco farmers in Ontario and the USA. The natives deliver or courier out cartons to people off the reserve and they sell to people who work in factories and to kids at the  school yards. Iv seen cars pop open their trunks at high school. They dont sell at the reserve only. They have lots of connections off reserve. As for their cigarettes being better thats just BS. Most dont even how to grow tobacco. They buy it illegally and sell the cigarettes illegally. If thats the only thing they have to better themselves I feel sorry for them. There are only a few that do well with the sales and that isnt shared with the rest.

  9. The Canadian goverment is to greedy and like all the cemicals in cigerets that the mowhawk people dont add all that stuff.

  10. I am a convienance store owner near this illegal smoke shop, I work very hard and I have to follow the laws or I will be shut down, I have tobbacco government people checking on me throughout the year and if I ever was in the wrong they would pull my tobbaco license in a heart beat.They have shut them down twice in almost a month,a lot of tobbacco sales are continuing in between shut downs. Also it is hurting my business and many more in the area. Convienance stores in Ontario are shutting down at a very fast rate because of these smoke shops. Soon all the hard working tax payers will be gone.I am not whining but why do I have to follow laws and pay taxes and they do not.It is illegal to buy this tobbacco then arrest a buyer and soon the buyers will dissapear and the smoke shop will have to close it self down. Where is our government Manitoba.

  11. Tobacco is a sacred medicine that has been appropriated and adulterated.  The only people who should have the authority to govern the buying and selling of this is Native people, and everyone should have to purchase it from them.  Damn right the Native cigarettes don’t have as many chemicals in them, and aren’t as bad for you.  They don’t rely on deceit to sell them.  It is sad that they are lying and using the media to propagate lies in order to garner public support to further their lawsuits against production of tobacco products by anyone but their cronies and fellows in the business.  What is even more sad is the way they can easily manipulate you with your learned and tolerated racism against Native people.  Now Johnny West:  Don’t cry bad Natives about selling smokes, every convenience store sells singles to high school kids!  Open your eyes, I take it you don’t have a teenager in your home.  Listen guys, I aim to offend none.  Hear me out.  Why should the government profit so highly off something they are allowing to be produced in a deliberately harmful method, when the original product was used as medicine with additional herbs inside it to protect the lungs and body/mind/spirit?  Then doctors have the right to deny you life saving operations if you are a smoker…saving themselves even more money :)  If it is not profitable for you to sell cigarettes then why do so?  Don’t get angry at Native people because the government is dealing unfairly with you…As for not paying taxes, are you not educated in Canadian history and Aboriginal issues?  If you were then you would understand why the few measly benefits left for Native people of this land who are living in mostly third world conditions are in place.  Perhaps you would be supportive of more measures to maintain equity for everyone?  Commend Turtle Island News!!!  Racism against the people of this land who suffered and continue to do so while you prosper and hate them publicly is disgusting.  While you enjoy freedoms and pursuits denied them.  Bad karma.  

  12. I believe the natives know tobacco is being used and sold off their land(but really what isnt “their land”?) I do not belive as someone posted they are transporting it off their land themselves and selling it to non natives that would be dumb since we come to them.
    This is a stupid argument, smokers in general get screwed by yhe government everyday, why cant we screw them back? When I buy a pack at government prices I pay like 90% tax but if I get sick from it the doctors have the right to refuse me medical care and operations because I smoke. IF CIGARETTES ARE SO EVIL MAKE THEM ILLEGAL! No no they wont do that cause they want our tax dollars. This is worse than rackateering when it comes to smokers because we arent even offered protection.
    I agree the government is just mad they made a bad deal with the natives and dont know how to get out of it and I say to that HAHAHAHAHAHAHAHA!
    More power to the Native tobacco suppliers and thank you for not poisoning me with government approved chemicals- Sincerely a non Native Native supporter.

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