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Majority of tobacco taxes potentially paid by low-income smokers, stats show

While tobacco use continues to decline in Canada, according to GNWT statistics, the NWT still has one of the highest number of smokers per capita in the country — despite having Canada’s highest tobacco taxes.
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Statistics from the GNWT show the majority of smokers in the territory make $20,000 or less per year. NNSL file photo

While tobacco use continues to decline in Canada, according to GNWT statistics, the NWT still has one of the highest number of smokers per capita in the country — despite having Canada’s highest tobacco taxes.

And most of the people paying those taxes are likely earning less than $20,000 a year.

The NWT Bureau of Statistics last compiled numbers in 2018. Of 34,338 people surveyed age 15 or over, 11,467 or 33.4 per cent said they were regular tobacco smokers. That’s more than three times the national average in 2018, when 10.9 per cent of all Canadians reported routinely smoking tobacco. A more recent 2020 survey by the federal government showed the national average held at 10 per cent.

The GNWT is raking in taxes from those 11,467 smokers. In August of 2022, NWT News North reported the GNWT was hiking tobacco taxes, increasing its take on cigarettes by 13 per cent and the tax on loose tobacco by 21 per cent, setting out to discourage consumption of the addictive narcotic by pricing people out of the habit.

That government’s take works out to 34.4 cents per cigarette or $94.60 for a 200-gram tin, according to CBC News. Assuming all current NWT smokers are smoking 20 cigarettes, or a pack a day, that adds up to nearly $29 million in tax revenue for the GNWT each year.

Almost one-third of those taxes are shouldered by smokers who report making $20,000 a year or less — 4,570 people, to be exact. The second biggest group of smokers paying the hefty tobacco taxes, were the 3,456 people who described themselves as regular smokers earning $60,000 or more each year.

The 2018 NWT statistics also report 75 per cent of smokers forking out taxes on tobacco are Indigenous. A whopping 8,582 of the 11,467 surveyed said they were Indigenous.

Yellowknife is the NWT’s smoking capital, with 3,698 people identifying as such. The Beaufort Delta is home to the second biggest number of smokers in the territory, with 2,583 smokers. The South Slave region is comes in third with 2,356 users. The Dehcho region has 963 smokers, the Tłı̨chǫ region has 957 smokers and 909 people are hooked on cigarettes in the Sahtú region. However, it should be noted these regions have total populations of 2,784, 2,247 and 2,024 people, so the percentage of the community using tobacco is considerably higher than in larger communities.

Smokers remain the minority

But tobacco users remain a minority in the NWT. Of the 34,338 people surveyed, 7,395 said they had managed to quit and 15,476 said they never started in the first place.

Far more popular in the NWT is the recently legalized cannabis. In the NWT Bureau of Statistics 2018 survey, 21,642 out of the 34,338 people surveyed said they had tried marijuana at least once and 8,847 said they had used it in the last 12 months.

Usage of cannabis is also skewed towards lower income, with 3,679 people who reported earning less than $20,000 a year saying they used cannabis within the last year, compared to 2,880 people who earn $60,000 or more.

Taxes on cannabis are collected by the federal government to the tune of $1 per gram or 10 per cent of the pre-tax price, whichever is higher. This is on top of GST. The federal government then returns 75 per cent of the taxes collected to provincial and territorial governments. Assuming each cannabis user in the NWT is smoking a gram of cannabis a day, that adds up to $273.75 in taxes to the GNWT, per person and more than of $2.4 million in total revenue.

Smokers also have to be extra careful where they spark up. The city of Yellowknife, as well as the towns of Hay River and Inuvik all have bylaws outlawing smoking in public spaces, including government buildings, common public areas like hallways or building lobbies, in taxis or on public transit, at private businesses or pretty much anywhere else that isn’t a designated smoking area or private family residence. Businesses that fail to uphold the bylaw in all three municipalities can be fined up to $10,000 and individuals can be fined up to $2,000 for smoking where it’s not allowed.

Cannabis use while driving is also dangerous and illegal. In the NWT, anyone caught driving a motor vehicle under the influence of cannabis by a “Drug Recognition Expert” can have their driver’s licence suspended. Drivers suspected of being high can also be asked to take a “Standardized Field Sobriety Test” or physical coordination test to prove they’re sober. Failing to take a test upon request or failing the test itself can also result in a suspension.

Any cannabis transported in a vehicle “must be unopened or be stored in a place that is out of reach of the driver and any passengers.”



About the Author: Eric Bowling

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