GN expects tobacco sales to drop with new tax hike

Retailers across Nunavut hiked the price of cigarettes by $1 a pack Feb. 24, to account for the GN’s new tobacco tax hike. (PHOTO BY SARAH ROGERS)

Nunavut MLAs approved a tobacco tax increase in the legislature this week that raised the price of cigarettes across the territory as of Feb. 24.

Smokers started paying $1 a package more for packs of 25 pre-made cigarettes, and an additional four cents a gram for loose tobacco.

On Feb. 23, MLAs approved Bill 35, An Act to Amend the Nunavut Tobacco Tax Act, making the territory’s tobacco tax rate the third highest in Canada, behind the Northwest Territories and Prince Edward Island.

The goal of the tax hike: to reduce tobacco use in a territory with Canada’s highest per capita smoking rates, while increasing tax revenue, said Finance Minister Keith Peterson Feb. 23.

The average price of cigarettes in the territory is about $18 a pack. And currently, Nunavummiut buy and smoke about 65 million cigarettes a year.

“We are expecting a decrease in sales,” Peterson told the assembly.

But Quttiktuq MLA Ron Elliott wanted to know how the government will monitor whether the tax increase actually lowers the number of cigarettes purchased across the territory over time.

The last tax increase on tobacco in Nunavut came into effect in 2006, Elliott pointed out.

But smoking rates in Nunavut actually increased since that time.

The Canadian Community Health Survey found that in 2006, 53 per cent of Nunavummiut smoked. Today, the percentage has risen above 60 per cent.

But, Peterson adds, there was no effective anti-smoking program in 2006.

The GN tabled an action plan last October called “Tobacco has no place here: Nunavut tobacco reduction framework for action 2011-2016.”

This is the first year in a five-year GN action plan aimed at bringing down smoking rates in Nunavut through youth outreach, cessation activities, research and community awareness.

“Now we’re hoping that we can use these taxes to fund programs that will educate people about the dangers of smoking,” said Peterson, who also serves as minister of Health and Social Services.

“Don’t start smoking and, if you smoke, try to quit,” he said. “We’re putting supportive mechanisms in place to provide people with programs that will assist them to quit smoking.”

But MLAs also want to see the government’s plans for the new revenue.

The GN already generates $13 million from the sale of cigarettes and tobacco, while the new increase is expected to raise amount that by about $3 million a year.

Elliott pointed out that Bill 35 says nothing about how increased taxes will be allocated to anti-smoking programs.

“It will be policy,” Peterson said. “You can rest assured that we’re not going to tax people and then use the money for something else.”

As far as monitoring the impact of increased taxes, Peterson said the Department of Finance keeps an eye on smoking sales through reports provided by retailers across the territory.

But Rankin Inlet North MLA Tagak Curley, who until recently served as Nunavut’s health minister, says he’s against the tax hike because “it just gives up hope.”

More energy should be put into smoking prevention programs across the territory, he said.

“I’m in full support that tobacco has no place here, but I think we can do further in Nunavut about smoking cessation,” Curley said. “This is probably the single largest health issue we have in Nunavut.”

Pangnirtung MLA Hezakiah Oshutapik echoed Curley’s comments.

“Posters are not going to have an effect on people,” he told the assembly Feb. 23. “If tobacco has no place up here, than I think we have to look at things such as treatment centres, programs and services for addicted people and have knowledgeable staff in place to help those people.”