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The Alberta government is planning to get tougher on contraband tobacco with legislation that includes mandatory reporting of seizures and harsher financial penalties for buyers, sellers and distributors.
“Contraband tobacco not only undermines public health and makes tobacco more available for minors, it creates unfair competition for legal retailers and diminishes revenue that funds the programs and services Albertans rely on,” Finance Minister Nate Horner said in a news conference Tuesday.
The proposed changes are part of Bill 12, or the Financial Statutes Amendment Act (No.2), introduced Tuesday in the legislature.
If the legislation is passed, sellers, buyers and anyone caught in possession of illegal tobacco could be hit with fines equal to triple the amount of tax paid on legal tobacco.
The fines would apply to contraband cigarettes, tobacco sticks and fine-cut tobacco, and cigars containing more than 1,000 grams of total tobacco.
Horner’s announcement came on the heels of a large bust near the Alberta-Saskatchewan border last week.
Huge seizures in Alberta, Saskatchewan
A routine traffic stop of a semi-truck travelling through Lloydminster on Highway 16 led RCMP officers to intercept unstamped cigarettes valued at $7.65 million — one of the largest loads seized in Alberta. Lloydminster is about 235 kilometres east of Edmonton.
“The seizure represents a significant disruption to the illegal tobacco trade,” said Sgt. Christopher Byford said in a statement released Monday.
Police say a driver of a semi-truck stopped in the early morning on Nov. 18 was unable to provide documentation for his cargo, which led to a search of the trailer and discovery of 8.8 million contraband cigarettes.
No further details about where the load came from or where it was headed were available. Police were also unable to comment on whether or not the case is linked to another load of 9.3 million unstamped cigarettes intercepted Nov. 14 on Highway 16 near Saskatoon.
The driver, a 33-year-old man from B.C., was charged with multiple counts under the Criminal Code, the Excise Act and the Tobacco Tax Act, including fraud, unlawful possession of and importing tobacco into Alberta.
“This not only impacts our city, it impacts our province,” said Lloydminster Mayor Gerald Aalbers. “Money that’s collected in excise taxes pay for the services that our residents and the residents of Alberta and Saskatchewan receive each and every day.”
Millions in tax revenue up in smoke
In 2024, the Convenience Industry Council of Canada (CICC), commissioned a study into the illegal tobacco sector in five provinces, including Alberta. The council represents retailers like 7-Eleven and Circle K and a wide variety of vendor partners, including Imperial Tobacco and Rothmans, Benson & Hedges Inc.
The study found the sale of illegal cigarettes between 2021 and 2023 cost the province approximately $262 million in tobacco tax revenue. It also estimated contraband sales made up 29 per cent of the cigarette market in Alberta, up from 13 per cent in 2019.
“Our retailers have been ringing the alarm bell on contraband for a number of years,” Sara CICC’s vice-president for Western Canada, told CBC News. “It’s impacting small businesses — community, local convenience stores can’t compete against the black market offering the same product at a 10th of the cost.”
Although hard data around illegal tobacco isn’t readily available, the impact is tangible, she said.
“The Alberta Treasury is out an estimated $100 million a year,” said MacIntyre. “Think about how many police officers, paramedics, nurses, schools that could be dealt with with that money.”
She said the council’s lobbying efforts had an impact on Alberta’s 2025 budget, which included funding for 10 more agents in the Alberta Gaming, Liquor and Cannabis’s (AGLC) Tobacco Enforcement Unit.
Two Alberta Liquor Gaming and Cannabis investigations seized a total of $12 million retail value of what it alleges is illegal tobacco. CBC’s Travis McEwan explains why the Crown corporation is focused on getting black-market tobacco off the street.
“We were really happy to see that the Alberta government was actually listening,” said MacIntyre.
She said the proposed changes in Bill 12 are “a step in the right direction,” and called Alberta an example of how other provinces could crack down on illegal tobacco.
“They really are head and shoulders above everybody else in the country,” MacIntyre said on Tuesday.
