2006-09-25 New tobacco tax measures come into force

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Home > Information Center > All news > 2006 > 2006-09-25 New tobacco tax measures come into force

Summary

2006

New tobacco tax measures come into force

On June 13, 2006, the Québec government implemented new measures respecting the tobacco tax.

Generally, the new measures provide for a 50% increase in the amounts of the fines for a first offence and the introduction of a fine for a subsequent offence within five years. The measures apply, for example, to the following offences:

A merchant who sells, delivers or is in possession of tobacco intended for retail sale in Québec and contained in a package that is not identified in accordance with the Tobacco Tax Act is liable to a fine of not less than $3,000 and not more than $750,000. If there is a subsequent offence within five years, the merchant is liable to a fine of not less than $10,000 and not more than $2,500,000.
A merchant who makes retail sales of tobacco without holding a registration certificate, or purchases tobacco from a person who does not hold a collection officer's permit, is liable to a fine of not less than $3,000 and not more than $37,500. If there is a subsequent offence within five years, the merchant is liable to a fine of not less than $10,000 and not more than $125,000.

Furthermore, the following acts are now considered offences under the Tobacco Tax Act:

the retail sale of tobacco (or offer to sell tobacco at retail) for a price that is lower than the total tax applicable to the tobacco
the purchase, by a consumer, of tobacco for a price that is lower than the total tax applicable to the tobacco
the sale, delivery or possession of counterfeit tobacco

Retail sale of tobacco for a price lower than the total tax applicable

No person may sell (or offer to sell) tobacco at retail for a price lower than the total tax applicable to the tobacco, that is, the excise duty and the tobacco tax, plus the GST calculated on the excise duty and tobacco tax.

For example, the following minimum retail selling prices have been in effect since July 1, 2006: $3.92 for a package of 20 cigarettes; $4.91 for a package of 25 cigarettes; $39.23 for a carton containing 200 cigarettes; and $33.69 for a container of 200 grams of fine-cut tobacco.

A merchant who fails to comply is guilty of an offence and is liable to a fine of not less than $3,000 and not more than $750,000. If there is a subsequent offence within five years, the merchant is liable to a fine of not less than $10,000 and not more than $2,500,000.

Purchase of tobacco products by a consumer for a price lower than the total tax applicable

No person may purchase tobacco at retail in Québec for a price lower than the total tax applicable to the tobacco, that is, the excise duty and the tobacco tax, plus the GST calculated on the excise duty and tobacco tax.

A person who makes such a purchase is guilty of an offence and is liable to a fine of not less than $300 and not more than $7,500. A person who commits a subsequent offence within five years is liable to a fine of not less than $1,000 and not more than $25,000.

Sale, delivery or possession of counterfeit tobacco

A merchant who sells, delivers or is in possession of counterfeit tobacco is guilty of an offence and is liable to a fine of not less than $3,000 and not more than $750,000. If there is a subsequent offence within five years, the merchant is liable to a fine of not less than $10,000 and not more than $2,500,000.

The term "counterfeit tobacco" means:

tobacco the package of which bears or on which is reproduced or imitated the trademark, trade name or any other distinguishing guise that can reasonably be associated with another tobacco product, without the authorization of the owner of the trademark, trade name or other distinguishing guise
tobacco the package of which bears an identification mark that has not been affixed by a person holding a valid manufacturer's or importer's permit.

Reminder of other sanctions

In addition to the fines provided for, certain offences under the Tobacco Tax Act may result in a seizure of tobacco, the suspension of a person's registration certificate, or a term of imprisonment.

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