Under the Tobacco Tax Act, unless otherwise authorized, it is illegal to buy, possess or distribute any quantity of untaxed cigarettes or any other untaxed tobacco products.
The presence of contraband tobacco in Ontario:
- Undermines the government's efforts to reduce smoking rates and protect children and youth from the dangers of smoking, as contraband cigarettes can be purchased for as little as a few dollars
- May generate profits that fuel other criminal activity, including trafficking of drugs or purchasing illegal weapons
- Results in a loss of government tax revenue.
Addressing contraband tobacco
The Ministry of Finance works closely with various law enforcement agencies such as the RCMP-led Cornwall Regional Task Force, local public health units, the Ontario Provincial Police and Crime Stoppers to reduce the presence of contraband tobacco.
Packages of legal cigarettes and fine cut tobacco in Ontario are identified by the Ontario-adapted federal tobacco stamp:
A tobacco stamp contains security features and has a yellow background with the letters 'ON' in white and in black letters the words 'DUTY PAID CANADA DROIT ACQUITTÉ'.
Because the provincial and federal taxes add up to at least $61.33 per carton of 200 cigarettes, cartons sold for less than this are likely illegal.
Subject to certain limited exceptions, cigarettes and fine cut tobacco sold in packages without a legal ON DUTY PAID CANADA DROIT ACQUITTÉ tobacco stamp are illegal.
For example, cigarette packages with a peach-coloured federal stamp may be sold at authorized duty‑free stores. Some on-reserve retailers are also authorized to buy, from authorized wholesalers registered under the Tobacco Tax Act, limited quantities of cigarette packages with a peach‑coloured stamp. These packages are to be sold only on reserves to First Nation consumers who are Indians as defined under the federal Indian Act, for their own use.
Consequences of breaking the law
Without proper authorization under the Tobacco Tax Act, it is against the law to have any packages of cigarettes or fine cut tobacco that do not have a legal ON DUTY PAID CANADA DROIT ACQUITTÉ tobacco stamp. Consequences include civil penalties, and, if charged and convicted of an offence, possible fines, jail time or both. Packages of cigarettes that do not have the tobacco stamp are unmarked cigarettes.
If you are convicted of possessing unmarked cigarettes you may be fined three times the tax on the unmarked cigarettes you possessed plus:
- a fine of $100 if you possessed 200 unmarked cigarettes or less
- a fine of $250 if you possessed more than 200 unmarked cigarettes but less than 1,001
- a fine of $500 if you possessed more than 1,000 unmarked cigarettes but less than 10,001
- a fine of not less than $500 and not more than $10,000 if you possessed more than 10,000 unmarked cigarettes.
In addition, if it is not your first conviction for possessing unmarked cigarettes or if you are in possession of more than 10,000 unmarked cigarettes you may be sentenced to up to two years in jail.
For tobacco retailers
Tobacco retailers must:
- sell only legal tobacco products
- have a valid tobacco retail dealer's permit
- only buy tobacco products from tobacco wholesalers who are registered with Ontario. You can see which wholesalers are registered by getting the current Tobacco Tax Registrant List . Please subscribe to receive e-alerts about tobacco tax and other topics from the Ministry of Finance
- keep, records and books of account for all tobacco product purchases and sales for seven years at their principal place of business
- not sell tobacco products to a person less than 19 years old
- require ID from anyone that appears to be less than 25 years old
- post applicable health warning and age restriction signs
- sell legal packages of cigarettes and fine cut tobacco that are marked with the ON DUTY PAID CANADA DROIT ACQUITTÉ tobacco stamp.
Tobacco retailers found selling contraband tobacco may be subject to penalties, fines, imprisonment, and may be banned from selling tobacco or lottery products.