 | The smugglers’ commodity is tobacco, mostly ready-rolled cigarettes, boxed and branded but untaxed, uncontrolled, and being sold at barely one third of the legal price, particularly in Canada where taxes are much higher. The problem has been growing since it took off in 2008. The Canadian government claims to have seized to date 252 million contraband cigarettes and 4.3 million untaxed cigars, but believes that is just the tip of the illegal tobacco mountain. Between 2014 and the summer of 2016, the Canadian government estimates that 2,081 tonnes of tobacco worth some C$530m was imported illegally, much but not all of it from the US, but all headed for the cigarette manufacturing plants on the First Nations reserves. |
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The Oka Crisis ended with a retreat by the authorities and advice to police forces to go softly on native relations. Fast forward three years to the signing of the North American Free Trade Agreement and many of North America’s big tobacco companies relocated their manufacturing plants to Mexico’s cheap labour market. The result? Members of the Indigenous community acquired their equipment cheaply and went into the business themselves, setting up on the reservations, theoretically not subject to US or Canadian domestic law. The theory was that the cigarettes could only legally be bought by reservation-dwellers; the result was a contraband explosion. |
 | The profit to be made from a single tractor-trailerload of native-produced cigarettes resold at half the commercial price could bring in an illicit profit of nearly C$2.5m and a loss to Ottawa’s revenues of nearly double that. The incentive is enormous. In March 2016 a mammoth cross-border operation involving some 700 US and Canadian police and customs officials seized C$4m in cash and 5,200kg of smuggled tobacco worth C$13.5m. Six months later, Hells Angels associate Sylvain Éthier, 41 was shot dead outside his home near Montreal. Associates who get caught and expose Hells Angels operations tend to do poorly. |  |
