Billions lost on tobacco

If the price of legal marijuana must be competitive with the black market in order to discourage underground sales, then the same logic should apply to nicotine, the head of Imperial Tobacco Canada said Thursday.

Governments across Canada are preparing for marijuana's legalization in 2018 and are creating legislative frameworks to regulate the industry.

Bill Blair, the federal MP tasked with leading the drug’s legalization in Canada, has said the provinces generally agree legal marijuana should cost roughly the same or lower than what can be found on the street.

That same rationale should apply to nicotine products, said Imperial Tobacco's Jorge Araya.

"The first step is to stop tax increases provincially and federally because we are getting to a level where illegal tobacco is booming in the country," Araya said in an interview after a speech organized by Quebec's main employers association.

About 70 per cent of the price of a pack of cigarettes is taxes, he said, and the illegal market in Canada represents 25 per cent of sales and billions a year in lost revenue for governments.

Imperial Tobacco has started selling a small machine that heats tobacco to release nicotine as opposed to burning it, which emits fewer toxicants.

The company also want to be able to sell liquid nicotine inside electronic cigarettes, Araya said.

"What we want is to sit down with government and look at all nicotine products and reach an agreement on how to treat taxation in a very sustainable way," Araya said.

A Quebec anti-tobacco coalition says it is misleading to treat tobacco like marijuana because tobacco is tied to tens of thousands of deaths a year, unlike pot.

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