SOURCE: Ontario Lung Association

Ontario Lung Association

May 01, 2014 17:36 ET

Tobacco Tax Increase a 'Missed Opportunity'

Ontario Still has Second-cheapest Cigarettes in Canada

TORONTO, ON--(Marketwired - May 01, 2014) - The Ontario Lung Association described today's budget announcement of a 13 per cent increase in the tobacco tax as "a small step forward" in the campaign to bring down smoking rates in the province.

"This is a missed opportunity," said George Habib, president and CEO of the Ontario Lung Association. "What we needed was an increase that would bring Ontario tobacco taxes into line with the rest of Canada. What we got was little more than a token gesture."

Habib said The Lung Association is pleased that Finance Minister Charles Sousa has acted on the recommendation contained in the Ontario Lung Association pre-budget submission by increasing the excise tax.

"Higher tobacco tax revenues would have gone a long way to fund proven, evidenced-based and cost-effective smoking cessation programs, part of a comprehensive lung health action plan that will save lives and billions of health-care dollars," Habib added.

But the $3.25 tax increase - from $24.70 to $27.95 - on a carton of 200 cigarettes means that Ontario will still have the second cheapest cigarettes in Canada, behind Quebec.

Smoking is Ontario's number one cause of preventable illness and death but the province's smoking rate has been stalled at around 20 per cent for several years.

The World Health Organization says that raising taxes to make cigarettes and other tobacco products more expensive is the single most effective way to encourage people to quit smoking and to discourage others from starting.

"We know that when retail tobacco prices go up 10 per cent, smoking rates go down by four percent," said Habib. "No other intervention produces results so reliably and so rapidly."

But the tax increase announced in today's budget will lift the retail price of a carton of 200 cigarettes from around $85 to $88.25 - an increase of less than four per cent and well below the $105 retail price in British Columbia, the province with Canada's lowest smoking rate of 14.5 per cent. 

"Ontario needs to catch up to the rest of Canada," said Dr. Matthew Stanbrook, respirologist with the University Health Network in Toronto and member of the Ontario Thoracic Society. "We have not had a significant tobacco tax increase since 2006. During that time every other government in Canada has raised taxes on tobacco."

Predictions that higher taxes will drive smokers to contraband tobacco are without foundation. In fact, recent research shows that when demand for legal cigarettes falls, so does demand for illegal cigarettes.

The Ontario Lung Association is a registered charity that provides information, education and funding for research to improve lung health. The organization focuses on the prevention and control of asthma and chronic lung disease, tobacco control and clean air. The Lung Health Information Line - 1-888-344-LUNG (5864) - is staffed by certified respiratory educators.

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