Nearly one in four cigarettes smoked in Ontario and Quebec is illegal, according to a new study by Canada's largest tobacco company.

Illicit cigarettes make up 23.5 per cent of sales in Ontario and 22 per cent of sales in Quebec and are costing federal and provincial governments US$ 1.5 billion dollars a year in lost taxes, the survey of 2,300 adult smokers across Canada commissioned by Imperial Tobacco Canada, a BAT subsidiary, found.
The illicit sales in Ontario and Quebec are fuelled by high tax prices and a failure of both levels of government to enforce laws related to cigarette manufacturing and taxation, said Imperial Tobacco president and CEO Benjamin Kemball Saturday.
According to Imperial Tobacco's estimates, 75 per cent of the decline in legal sales has been transferred to the illicit market, Kemball said.
His company estimates the current average annual decline in tobacco use is only two per cent a year, considerably lower than the 18 per cent reduction equivalent to 2.6 billion cigarettes recently announced by Health Canada and the Ontario government.
Illicit cigarettes are sold for as little as US$ 20 for 200 cigarettes, Kemball said, a third of the cost of a carton of legal smokes. According to the study, at least 95 per cent of the illicit cigarettes were manufactured on native reserves and nearly 97 per cent of the sales are concentrated in Ontario and Quebec.
According to the Criminal Intelligence Service Canada, illicit cigarettes are manufactured on reserves near the Canadian border in the United States and smuggled into Canada before being distributed across the country. (pi)