News Release - Alberta Revenue - Changes will limit quantities of tax-exempt tobacco products

News Release

August 29, 2003

Changes will limit quantities of tax-exempt tobacco products

Edmonton...Effective September 1, allowable limits of tax-exempt tobacco products imported into Alberta from other provinces as well as outside Canada, will decrease significantly. The new limits are: 200 cigarettes, 200 tobacco sticks, 50 cigars or 50 cigarillos, and 200 grams of manufactured tobacco, and can only be brought into Alberta following a 48-hour absence. The exemption limits are the same whether the tobacco is purchased outside Canada or in another province.

There is no exemption on tobacco products for any absence less than 48-hours. The agreement also applies to tobacco products imported into the province by courier, the postal service and/or the Internet.

“We are implementing stricter legislation to help support the province’s tobacco reduction strategy and level the playing field for tobacco consumers and retailers,” said Revenue Minister Greg Melchin. “These changes will also strengthen controls for the purchase and sale of tax-exempt tobacco products regardless of how the tobacco enters Alberta.”

Under previous limits Albertans were able to import the tobacco equivalent of five cartons of cigarettes for personal use without paying any provincial tax and without a minimum absence requirement. The changes are made possible by the Tobacco Tax Amendment Act 2003 passed during the spring sitting of the Alberta Legislature. Canada Customs and Revenue Agency will collect the provincial taxes on behalf of the province.

Alberta’s tax rates on all tobacco products were increased in 2002 as part of the government’s tobacco reduction strategy. Tobacco tax rate increases led to reductions of 24.4 per cent in cigarette sales, 8.1 per cent in loose tobacco sales, 3.6 per cent in cigar sales, and 2.3 per cent in custom cut tobacco (2002-03 final numbers). However, as a result of the tax rate increases, the sale of tax-exempt products from the United States increased dramatically. These changes are estimated to collect an additional $7.5 million in tobacco taxes for the remainder of this year.