Tobacco sellers, industry push back against Alberta budget tax hikes

How Budget 2019 will affect families Vehicle registrations and tobacco are two things that will cost more under Budget 2019. CTV Edmonton’s Amanda Anderson reports.

EDMONTON -- Those who make and sell cigarettes are pushing back against the Alberta government's new tax hikes on tobacco products contained in the 2019 provincial budget.

The budget announced an increase of $5 per carton of 200 cigarettes, up to $55. The move will raise revenue by $14 million in 2019-20 and by $45 million by 2022-23, according to the budget.

"It's a burden on my customers," said Lovejeet Singh who owns a smoke shop in Mill Woods. "Everybody feels frustrated right now ... the economy is pretty slow."

Singh estimates individual packs of cigarettes will go up in price by between 60 and 70 cents.

"If I don't get customers due to the tax increase and the price increase definitely I'm out of a business."

The tobacco industry fears the hike will drive smokers to the black market.

"A tax shock like this will simply drive more smokers to the illegal market," said Eric Gagnon with Imperial Tobacco Canada. "The government has gone and made illegal products significantly more attractive to consumers by increasing the price gap between a legal and illegal pack of cigarettes.”

Last year, police told CTV News' W5 that contraband cigarettes feed a massive illegal industry run by organized crime groups, and the cost to the taxpayer is in the billions of dollars.

On the same day the new tax rate kicked in, the province announced a review of Alberta's Tobacco and Smoking Reduction Act. The government is seeking public input through an online survey that's open until Nov. 29.

The Alberta budget also promised to develop and enforce a tax on vaping products sometime in 2020.

New plain packaging laws come into effect next month and limit cigarette packs to a brown exterior displaying images of the health effects of smoking.