News Release

FREDERICTON (GNB) – New amendments to the Tobacco Tax Act will raise the price of cigarettes to discourage smoking and help pay for the additional costs that smoking imposes on the health-care system.

As announced in the 2016-17 budget, the tax rate applied to tobacco products will be increased by 6.52 cents per cigarette or gram of loose or fine cut tobacco over the next two years.

Effective Feb. 3, the tobacco tax rate has been increased by 3.26 cents, bringing the tax rate from 19 cents to 22.26 cents. This rate will be further increased by an additional 3.26 cents from 22.26 cents to 25.52 cents, effective Feb. 1, 2017.

The amendments also include provisions that would increase penalties for those who participate in activities that violate the Tobacco Tax Act.

“The amendments being proposed will help bring us one step closer to addressing our province’s financial challenges, as well as move us one step closer to the fulfilment of our commitment to better police the illegal sale of contraband tobacco products and the smuggling of tobacco from other jurisdictions,” said Finance Minister Roger Melanson.

In addition to increased penalties, the amendments also provide a mechanism that could suspend or revoke the licence of a tobacco retailer if they participate in illegal activities related to gaming, tobacco or liquor.

“The contraband tobacco market is estimated to represent a revenue loss of about $15 million annually,” said Melanson. “This is money that is not going to priority areas like health care, education, social programs and job creation. Rather, in most cases, it is simply funding more illegal activity. The underground economy hurts legitimate businesses, puts unwitting consumers at risk and puts an additional burden on law-abiding New Brunswickers who are paying taxes.”

The new amendments would:

• increase the minimum fine from $1,000 to $2,000;

• impose a minimum fine of $5,000 where it is a second or subsequent offence within five years; and

• increase the additional fine amounts from three times the amount of tax to five times the amount of tax that would be payable on the tobacco in respect of which offence was committed.