Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 16 - Evidence - September 18, 2014
OTTAWA, Thursday, September 18, 2014
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-10, An Act to amend the Criminal Code (trafficking in contraband tobacco), met this day at 10:30 a.m. to give consideration to the bill.
Senator Bob Runciman (Chair) in the chair.
[English]
The Chair: Good morning and welcome colleagues, invited guests and members of the general public who are following today's proceedings of the Standing Senate Committee on Legal and Constitutional Affairs.
We are meeting today to begin our consideration of Bill C-10, An Act to amend the Criminal Code (trafficking in contraband tobacco). According to the bill's summary, it will amend the Code to create a new offence of trafficking in contraband tobacco and would provide for mandatory minimum penalties of imprisonment for repeat offenders dealing in large quantities of contraband tobacco.
Bill C-10 was previously introduced in the last parliamentary session as Bill S-16. In the last session, this committee held four meetings on Bill S-16, hearing from a total of 17 witnesses.
On May 9, 2013, this committee reported Bill S-16 back to the Senate without amendment but with an observation with respect to the definition of ``officer'' as it relates to this bill and other coordinating legislation. Bill S-16 died on the Order Paper at the last prorogation, and Bill C-10 was introduced in its place on November 5, 2013. This is our first meeting on Bill C-10.
To begin our deliberations, I am pleased to welcome back to the committee Paul Saint-Denis, Senior Counsel from the Criminal Law Policy Section of Justice Canada.
Welcome, sir. I understand you have an opening statement. Please proceed.
Paul Saint-Denis, Senior Counsel, Criminal Law Policy Section, Justice Canada: Thank you, Mr. Chair. In light of your comments, where you essentially picked up most of what I was going to say, I think I might be even briefer than I'd expected.
As you indicated, this bill was essentially tabled last year as Bill S-16, which this committee has examined. This bill essentially deals with the creation of a new offence of trafficking in contraband tobacco. It proposes a penalty of five years maximum on indictment, but it does have this unusual series of penalties involving minimums, whereby individuals who are recidivists, that is to say who have been convicted of this offence a first time, will be liable to minimum penalties on a second offence of 90 days, a third offence of 180 days and a fourth and subsequent offence of two years less a day where there are substantial quantities of cigarettes or tobacco products involved. Indeed, we're talking about quantities of 10,000 cigarettes, 10 kilograms of raw leaf tobacco and 10 kilograms of tobacco products.
This bill actually is set in a fairly large context, which is the broader problem of tobacco smoking generally. Not only does this bill wish to tackle the issue of contraband tobacco smuggling, but it also wishes to help reduce cigarette smoking. These contraband cigarettes are sold at considerable discounts and, therefore, are obviously the kinds of products that the cigarette consumer will lean towards or will choose, including youth. As you know, young people are particularly vulnerable to cigarettes and cigarette smoke. The bill, we hope, will stem the tide of contraband cigarette smoking both in youths and in adults.
That will summarize my very brief remarks. I would be more than happy to answer any questions you may have.
The Chair: Thank you. I appreciate that, and we will begin those questions with the deputy chair, Senator Baker.
Senator Baker: Welcome to Mr. Saint-Denis. He has appeared before our committee many times over the years.
The recommendation that this committee made in reporting the bill was that the government should consider giving an officer, such as Senator Dagenais, when he was a police officer, the same power as a customs officer would have under the Customs Act or an excise person would have under the Excise Act.
I noticed you didn't mention that, but looking at the law, the only change in the law is that one sentence: ``No person shall sell, offer for sale, transport, deliver, distribute or have in their possession for the purpose of sale a tobacco product, or raw leaf tobacco that is not packaged, unless it is stamped.'' That's it. Half of that statement, ``No person shall sell or offer to sell,'' is in the Excise Tax Act, and the rest of this offence — transport, deliver, distribute — is in provincial legislation. In Ontario, you have the Tobacco Tax Act. It involves the transportation and distribution of tobacco products.
In the Excise Tax Act, the sale is covered — ``shall sell or offer for sale.''
The two main elements of this particular new offence — alleged new offence — are already contained in the law, in the Excise Tax Act and in the provincial tobacco acts that regulate the distribution and transportation of the product.
Is that a fair statement? What would you have to say about that?
Mr. Saint-Denis: Yes, sir, it is a fair statement. There is overlap between this offence and parts of the offences in the Excise Act, 2001, and there is some overlap between these provisions and some of the provincial statutes dealing with taxes or finance.
I don't really have anything to add to that other than the fact that what we're doing here is criminalizing this in the context of the Criminal Code, and we've added minimum penalties.
The Excise Act does not have any minimum imprisonment penalties. It does have minimum fines. The provincial statutes are essentially non-criminal in nature. This is a different type of animal, if you wish. While there is some overlap, overlap between a code offence and other federal statutes is not unknown. The purpose is simply different. In this case we wanted to criminalize the behaviour in the context of the Criminal Code to signify the importance of and the extent to which we wish to demonstrate the seriousness of tobacco contraband by putting it in the code.
Senator Baker: We have in Canada, on a regular basis, cases concerning each one of these elements. They appear before the court and sentences are handed out for every single element here — sell, offer to sell, transport and deliver for the purpose of selling.
To add another layer, aren't you or is the department concerned that there is a principle against multiple convictions for the same offence? In other words, you can't convict somebody for offences for which the elements of the offence or the approximation of the elements of the offence are covered by another count in the charge. In other words, an officer now is going to have a choice: the same wording in the Excise Tax Act, the same wording in provincial legislation, and he's going to have the same wording in the Criminal Code. The police officer, or the prosecutor after the police officer lays the charge, will have to determine which one of them is going to apply.
Would you not agree all of those res judicata and Kienapple principles and so on would apply in this particular case because there is nothing new being prosecuted here? All that's new is your mandatory minimum in the Criminal Code.
Mr. Saint-Denis: Right. Well, in point of fact, while there is overlap between let's say this legislation and the Excise Act, 2001 and there's overlap between this legislation and some provincial statutes, the arresting officer will pick the offence he wants to charge, so I don't think there is any risk of the Kienapple principle being breached. The officer will determine, based on his judgment and discretion, which offence best applies and will proceed with that.
Senator Baker: Some of these offences take place in Canada and in the U.S. I think that in the case of reserves, there may be one reserve that has authority in the U.S. and in Canada. The Ontario Court of Appeal ruled a couple of years ago — I'm sure you're aware of this — that you cannot issue a summons to anybody for an offence unless they're in Canada, unless the legislation gives you authority to do so. Why have you left out what I would consider to be a key provision that would allow you to deliver a summons to certain activities that take place not solely in Canada but partially in the U.S.?
Mr. Saint-Denis: First, if there is an activity that occurs in the U.S. then there is no offence being committed in Canada. The activity is occurring in the U.S. The U.S. has its legislation dealing with this phenomenon, and they will be free to deal with that activity on their territory as they wish.
With respect to your fundamental question, which is why there is no summons ability associated with this bill is that there is no extraterritorial reach to this offence. Therefore there is no need to incorporate the ability to issue a summons to someone in the U.S. on the first hand.
On the second hand, this is simply an offence that we've added to the Criminal Code, and to my knowledge there is no offence in the Criminal Code to which we can issue a summons outside of the country. So we're treating this offence as we've dealt with all of the other offences in the code. It's no more or less than that.
The Chair: I'm trying to draw on my memory from when this dealt with this legislation in the past. Wasn't there a problem with respect to having these offences under the Excise Act in terms of enforcement? I think we had testimony where, for example, the Ontario Provincial Police were involved and only the RCMP could enforce under the Excise Act. Wasn't that one of the concerns?
Mr. Saint-Denis: That is correct. In fact the effect of having this in the Criminal Code is to allow for the ordinary peace officer, non-RCMP peace officer, to apply this legislation, whereas presently the enforcement of the Excise Act, 2001 offence is limited to the enforcement actions of the RCMP exclusively.
Senator Joyal: The officer will have to decide under which legal heading the accusation will be launched. There is the choice of the Criminal Code with minimum penalty, whereby in terms of sentence then section 718.2(e) of the code would not apply. That is the Gladue principle because there is a minimum offence. There is also the choice to go through the Excise Act or through the provincial statute.
In other words, he or she will have the opportunity not only to select the kind of offence because then there is the Criminal Code and a criminal record and everything that follows from a criminal charge, but also in terms of the sentencing. Can you confirm that?
Mr. Saint-Denis: I'm sorry; perhaps I missed the question. You're saying that essentially the peace officer will have the discretion to lay the charge that he thinks best under the circumstances, either under the code, under the Excise Act or under a provincial statute, and that's correct, yes.
Senator Joyal: Yes, because the sentencing is different. The principle of sentencing under the Excise Act or the provincial statute and then, of course, the Gladue principle, 718, the fact that the person is an Aboriginal person, the judge could not take that into account in sentencing the person because the person is guilty of an offence with a minimum sentence provided. According to the jurisprudence and past decisions of the Supreme Court, when there is a minimum penalty, the Gladue principle, section 718.2(e), doesn't apply.
Mr. Saint-Denis: That's correct that it would not apply in that if the individual is charged with a Criminal Code offence and he is a second-time offender, having been found guilty the first time of this offence, not an Excise Act offence, if he is charged with this second offence, then he is liable for a minimum penalty. However, if the Crown, for reasons that would be known to him, chooses not to seek a minimum penalty, then no minimum would be applied.
Senator Joyal: Of course. There is no minimum. We all agree with that. There is no minimum and then there is the Gladue principle with fine application. We agree on that basis.
My second question is in relation to the comparable U.S. legislation in areas whereby, as my colleague Senator Baker has mentioned, Indian reserves cross borders on both sides. We all know which one we have in mind, which is not that far away from here.
Did you, in drafting that legislation, take into account the comparable penalty for a similar offence in the neighbouring states or the United States penal code in relation to that kind of offence?
Mr. Saint-Denis: No, we did not. We were primarily looking at the Excise Act offence and the penalties and bore that in mind. We did not consider the American legislation at all.
Senator Joyal: So we can't judge if this is about the same kind of criminal responsibility on the Canadian side as on the American side.
Mr. Saint-Denis: No, we can't.
Senator Joyal: In other words, a person who will want to be involved in the sale, transportation, distribution and whatnot, would have to know on which territory with a lesser penalty he committed the offence.
Mr. Saint-Denis: Practically speaking, I don't think that really would be the case. If the individual wishes to smuggle cigarettes into Canada, he will be committing part of the offence in Canada. He may be committing part of an offence on the U.S. side and the U.S. would be responsible for dealing with that, but if he wants to carry out any of the activity on Canadian soil, then he's looking at the Canadian legislation. I don't think he will start thinking in those terms — that is, unless he chooses to wholly commit his activities in the territory where there is the lesser penalty. Assuming that the U.S. offers a lesser penalty, he might choose to commit all of his offences in the States. That's fine. That means we don't have to deal with him. I don't think there is any issue there.
Senator Joyal: Did you consult the Aboriginal leaders in relation to the drafting of the new offence?
Mr. Saint-Denis: No, we did not.
Senator Joyal: You had no consultations prior?
Mr. Saint-Denis: We had no consultations. We knew that the Aboriginal people would be testifying before this committee. In a sense, that's a form of consultation. Parliamentarians will have had the benefit of their views in terms of this legislation, but we did not consult outside of the federal family. We did speak with people from Excise, Finance, the RCMP and Public Safety.
Senator Joyal: But no provincial Attorney General or provincial Minister of Justice?
Mr. Saint-Denis: No provincial or Aboriginal consultations at all.
Senator McIntyre: With Bill C-10, Criminal Code amendments would allow additional law enforcement officers to deal with contraband tobacco. Would designating various police forces under section 10 of the Excise Act achieve the same objectives as the new provision in Bill C-10? Instead of amending the code, would it not be simpler to amend the Excise Act, allowing additional law enforcement officers to deal with contraband tobacco? I understand RCMP officers are the only ones authorized to enforce the Excise Act.
Mr. Saint-Denis: In point of fact, no, it would not achieve the same thing. First, there is more than just having the ability of having non-RCMP peace officers enforcing this. There is the minimum penalties aspect. If we designated non-RCMP peace officers under the Excise Act, we still would not have the minimum penalties that we are looking for.
Equally important is that we would not have an offence in the Criminal Code with everything that criminalizing an activity under the code brings, which is generally viewed as something more serious because it's in the code. Even if it's a similar activity to that, let's say, which is in the Excise Act, the fact that it's in the Criminal Code brings with it a certain aura and shows the opprobrium that society has for this particular activity that's being inserted as a prohibition in the code.
Yes, if we had designated peace officers under the Excise Act, we would have had the opportunity to broaden the number of peace officers who can enforce this, but the other elements of this bill would not be there. While it's technically possible for other peace officer agencies to be designated, there is no indication by the Revenue Canada Agency that they are interested in doing so.
Senator McIntyre: As I recall in the 1990s, some major manufacturers of cigarettes legally produced in Canada were involved in smuggling contraband tobacco. They were exporting cigarettes to the United States which were then smuggled back into Canada to be sold tax-free. I further understand that large companies had to pay billions of dollars in criminal fines and civil restitution.
Since then the type of contraband tobacco has changed, with illegal manufacturing and counterfeiting of cigarettes increasing, while smuggling of otherwise legally manufactured cigarettes to avoid taxes is no longer a significant issue. Am I correct in this assumption?
Mr. Saint-Denis: I believe you are. The RCMP has indicated that the nature of the activity has changed along the lines you indicated.
[Translation]
Senator Dagenais: Thank you very much, Mr. Saint-Denis. This is a good bill, but I do not believe it criminalizes simple possession. You talked about all that. If simple possession had been included in the bill, do you not feel that it would have reduced the demand that drives the black market we hear so much about?
Mr. Saint-Denis: We asked ourselves that question, senator. Our fear is that simple possession runs the risk of criminalizing a pretty significant number of people. We came to the conclusion that it was preferable to avoid that kind of situation.
We were mindful of what happens with drugs. We know that, in some cases, possession of some drugs causes huge problems when the time comes to enforce the law. We wanted to avoid that. In addition, the idea of criminalizing the possession of one contraband cigarette would technically have been a little excessive, especially since the Excise Act has a section that criminalizes possession as such. That being the case, especially since we were adding minimum sentences, criminalizing possession was not warranted.
[English]
Senator McInnis: The bill hopes to reduce the number of youth that are involved in smoking. It is a fact that youth are one of the difficulties because they tend to get into it at an early age. Where do they buy these contraband cigarettes? Are they buying them off the reserve or on the reserve?
Mr. Saint-Denis: I believe they are available both off and on the reserve.
As for the youth, my understanding is that supply chain, as it were, goes from the producers, mostly on the reserve, and then it will move off reserve and go to places such as tobacco shacks and then move into convenience stores, and so on. By the time they reach convenience stores, they're available to the general public, including youth. There may be some sales on school sites. I'm not too sure about that part, but I think that the availability of the cigarettes in convenience stores certainly makes it open for youth to purchase them there.
Senator McInnis: Senator Joyal alluded to this; he didn't get into it much, but he asked the question about provincial consultation. The Natives always see this as a difficulty when they're not consulted. Whether they will agree or you think they will not agree with what you're about to do with legislation, it's always helpful to consult with them. I presume here, and it's a presumption on my part, that they are deemed to be the root of the problem here, to some degree.
I read that the Government of Ontario allegedly gave a grant to the Akwesasne council to bring about a tobacco law and that they would work towards a regulatory framework dealing with tobacco. They would have liked to have seen the federal government involved, of course, as well. But I take it that would be leading to them regulating the tobacco business. Do you know anything about this?
They also said that this would facilitate or help in dealing with organized crime and their involvement. Are you aware of any of this? It would have been another reason, I think, to consult. I know we have Aboriginal Affairs and Northern Development and so on, and I presume you wouldn't know whether they were involved or not, but I always found it helpful to consult.
Mr. Saint-Denis: I quite agree. Unfortunately, in this situation, for this bill, we did not.
As for the Ontario initiative, I'm not familiar with that. This is the first I have heard of this, so I can't speak to that at all.
In terms of Aboriginal involvement, the Aboriginal position, as I understand it, is that they're entitled to certainly be in possession for their own consumption. The government's position has been traditionally, and I think is now, that the sale of the tobacco product is not covered by Aboriginal rights and so their activities are caught by the Excise Act, and that would be caught by these provisions.
As to whether or not these provisions will be enforced on Aboriginal lands, I think that remains an open question.
I was looking at the witness list. You will have witnesses from the Aboriginal communities testifying, so they will be able to explain their positions much better than I can.
[Translation]
Senator Boisvenu: Good morning, Mr. Saint-Denis. In 1989, a study conducted in 75 high schools in Quebec showed that 40 per cent of all cigarettes were bought illegally. Today, we know that a carton of cigarettes costs about $85, as opposed to about $30 on the black market. That is a saving of $50 to $55. So we know that contraband has become even more common.
Clearly, I support this bill, but, the bill aside, what I am trying to understand is the strategy the government has in mind for stopping the contraband. I was on the Internet just now, as I was listening to you, and I was looking at cigarette seizures since 2010. In Estrie alone, there are seizures every week, and we are talking about 300,000 to 400,000 contraband cigarettes.
So I am trying to understand our strategy in enforcing this law, especially given what you said, if I understood correctly, that it would not be enforced by forces other than the RCMP. What will our strategy be in stopping this explosion in contraband cigarette purchases, especially by younger people, given that we know two things? First, that the state derives no financial benefit from it, and second, that, in terms of health, as Health Canada reminds us, these cigarettes contain 40 times more toxic substances than cigarettes that are sold legally.
I am trying to find out what our strategy is for reducing the illegal sale of cigarettes. It is all very well for us to arrest five, six or ten smugglers and get a few million dollars in fines, but if the black market is doing so well — Do you see where my question is going?
Mr. Saint-Denis: I do. First, let me correct one thing. Criminalizing this activity and putting the offence in the Criminal Code will mean that, not only would the RCMP be able to enforce the law, but other police forces would be able to do so too. So there is a multiplier effect, in that more peace officers would be able to become involved.
Senator Boisvenu: That is new.
Mr. Saint-Denis: It is new because the offence will be in the Criminal Code. Beforehand, the offence was in the Excise Act exclusively, limiting it to RCMP activities.
Second, when Bill S-16 was tabled, the minister responsible for public safety announced the creation of a new group made up of 50 or so RCMP officers to deal with contraband tobacco activities.
In addition to that, the government — Health Canada — conducts anti-smoking campaigns. I think that the provinces do the same kinds of things too.
Lastly, the deterrent effect of minimum sentences and the fact that the offence will be in the Criminal Code will perhaps have an impact on criminal activities. We hope it will and we think it will, though we recognize the fact that illegal cigarettes will be available at discount prices, and that is hard to fight. We have to recognize that. Perhaps we are facing some difficulties, but this is a start, I feel.
[English]
The Chair: Criminalizing these offences also, I assume, opens up avenues to get proceeds of crime and forfeiture provisions under the code as well. Is that a correct assumption?
Mr. Saint-Denis: It is, but I have to tell you that because the offence in the Excise Act is an indictable offence — it's a hybrid offence but therefore an indictable offence — the proceeds provisions of the Criminal Code already apply to that. But the fact that it will be open to other non-RCMP law enforcement officers might mean that more people will be thinking about that aspect of things and so it's possible, as you suggest, that these provisions will be applied more frequently.
The Chair: It will be interesting to watch because we know that some of these groups can be, at least in terms of rhetoric, very militant, especially if you're utilizing forfeiture provisions that could generate some confrontations. We hope that's not the case, but we've seen that in the past history.
When we talk about Ontario, I met with some folks a couple of years ago who were very concerned about tobacco growers in Ontario, that the Ontario government wasn't being as proactive as it could be and that a lot of the tobacco being supplied in Six Nations, for example, was coming from Ontario growers who were not being monitored by the Ministry of Finance in Ontario. Do you know anything about that? Has that situation, if it was accurate, changed at all?
Mr. Saint-Denis: I don't know the situation with respect to Ontario growers. There is, I think, some diversion of raw tobacco going from the growers to the manufacturers. I don't know if the tobacco manufacturers on the reserves are getting all of their tobacco from Canadian tobacco growers. I can't say. I think the RCMP might be in a better position to respond to that.
[Translation]
Senator Joyal: Mr. Saint-Denis, since you did not consult First Nations' representatives, or provincial attorneys general, which factual study did you use to lead you to the conclusion that it is important to amend the Criminal Code with the provisions that you are presenting to us today?
Mr. Saint-Denis: We did not come to that conclusion based on a study. We received directives to create a new offence and we followed them.
Senator Joyal: Who gave you those directives?
Mr. Saint-Denis: The minister.
Senator Joyal: So the source was political.
Mr. Saint-Denis: The minister set the policy he wanted us to follow, so we followed it.
Senator Joyal: So this was not the result of an RCMP report that concludes that, for some contraband products, setting harsher penalties is appropriate because it would be an effective way to meet the objectives that the force is not able to meet with the current legislative framework.
Mr. Saint-Denis: I am not in a good position to say exactly what motivated the minister to go in that direction. We know that the RCMP produced reports about the tobacco situation in 2008 or 2009. Perhaps the minister consulted those reports and obtained information from other sources, and that told him what he needed to know and guided him in what he wanted to do.
Senator Joyal: As you have presented it, this bill seeks to achieve social policy or public health objectives with the goal of reducing the consumption of a product that is deemed to be harmful to health. In your opinion, are there other examples in the Criminal Code of penal provisions that have been introduced or added with the goal of promoting social policy?
Tobacco is not in itself an illegal product. Neither is alcohol. They are products that can become dangerous if consumed in certain ways, in the same way as trans fats can become dangerous. If you eat too much of them in your diet, you develop all kinds of secondary diseases such as diabetes or even cancer.
Do you have any other examples of offences in the Criminal Code that were created in order to meet a social policy objective?
Mr. Saint-Denis: Perhaps firearms offences could be considered social policy in a way. Gun control could be said to have a social objective. There is an offence dealing with administering a toxic substance, which you might say has an aspect of social policy.
You referred to the Criminal Code only. However, the Controlled Drugs and Substances Act is just that, meaning that it seeks to control the use of certain drugs and substances. We could say that one of its main features is social policy.
I am trying to think of something else we might find in the code. You have recently addressed the issue of prostitution-related offences. That issue has a social aspect to it.
The code includes a number of offences. It all depends on how you define ``social policy'' in relation to the measures in the code.
This case is just another example of that.
Senator Joyal: You did not consider the more recent studies on the increase in tobacco use, for instance. Based on the general information in the media, it does not seem that tobacco use has increased so much that we must take the hammer, so to speak, of the Criminal Code to deal with a potentially unbridled increase that would put public health at risk and place considerable pressure on health institutions — we know all the chain reactions. Do you have a study that shows that tobacco use has increased considerably and that there is a case for acting directly through the Criminal Code?
Mr. Saint-Denis: I am not familiar with any studies like that. However, if I am not mistaken, on the one hand, the information suggests that tobacco use has increased for young people — but perhaps not significantly.
On the other hand, we are aware of some activities related to contraband tobacco and where violent acts have been committed. We are talking about gun shots, even the use of firearms to commit offences in some cases. That is one of the aspects that the government wanted to address. Apart from that, I am not aware of any studies like that.
Senator Joyal: Clause 3 of the bill deals with the selling, delivery and distribution of tobacco from the perspective of the sale, not of the purchase. In other words, a young person buying contraband cigarettes is not targeted by this bill — unless I am misreading it.
Mr. Saint-Denis: No, purchase is not one of the activities included.
Senator Joyal: We cannot say that this bill will have a direct deterrent effect on young people, telling them that, if they buy contraband cigarettes, they may end up in jail. That is not the case for marijuana or other drugs that young people might want to consume, the use of which we can suspect has increased, and as a result, so have the risks and all the other related consequences.
Mr. Saint-Denis: No, that is not the case.
Senator Joyal: It is not the case. In addition, based on your answer to Senator Dagenais, that is not the objective either. The bill will therefore have quite a peripheral effect on the use of contraband tobacco by young people since, in practical terms, once the tobacco is resold, the person buying it at the final destination is not committing a crime or is not presumed to be taking part in a criminal act.
Mr. Saint-Denis: That is quite right. However, the act of purchasing is closely linked to possession. One of the things we specifically wanted to avoid is criminalizing possession. We did not want to criminalize a person buying or possessing contraband cigarettes. This is an attempt to control the supply rather than the demand through criminal legislation.
Senator Dagenais: Mr. Saint-Denis, you said that other police forces will be involved from now on. You know as well as I do that police forces must manage their budgets and choose their battles accordingly. If I go by what I was reading this morning, the Sûreté du Québec is the third largest police force in Canada. In light of what is happening in Quebec, it will face budget cuts and will have to reduce its services.
What do you expect from police services, now that they will be able to participate in this fight because of the bill?
Mr. Saint-Denis: I could not predict what their reactions will be or what strategies they will adopt. It is very possible that they will restrict themselves to accidental discoveries where they might find significant amounts of contraband tobacco in a truck driving along Highway 40 or Highway 20, in Quebec. The police officers will then have the opportunity to lay charges for that new offence.
In terms of strategies for specific activities, I cannot say.
[English]
Senator Baker: As to the constitutionality of this provision, the existing laws in the Excise Act and in provincial legislation have been challenged several times in the courts as to whether or not it's cruel and unusual punishment under section 12 of the Charter, and I think the final resolution is that it passed the test.
Now in those cases, these were mostly regulatory offences, certainly all fines, but now you're using a sledgehammer on the same offences under the Criminal Code. It doesn't matter if you are the boss man or the mule, in this case; you can have a driver who will encounter the same penalty as the person or the persons who employed the driver.
As you are well aware, the sentencing provisions by judges under the Controlled Drugs and Substances Act deal with those who carry drugs differently than the bosses, than the people who are at the top of the ladder. The sentences are far less. If you look at every sentencing decision, they are far less for persons who are not kingpins in the operation.
Yet this provision here will apply to, what, 500 packages of cigarettes. If there are 20 cigarettes in a package and there are 10,000 cigarettes, that's 500 packages. Somebody's transporting those 500 packages. For the second offence, they go to jail for three months, regardless.
Did the department check the constitutionality, analyze it and make up its mind that this will pass the constitutionality test, as far as section 12 is concerned?
Mr. Saint-Denis: In short, yes. In fact, the department always verifies the constitutionality of any of the provisions that we propose, especially when minimum penalties are involved.
To respond to some of the questions or the issues you've raised, the question of the kingpin would not necessarily be dealt with through this particular proposed provision but might be dealt with through the criminal organization provisions of the code where the penalties are much more serious. If we can demonstrate that the individual has provided instructions or the like or is working for an organized criminal group, then those provisions would come into play.
Senator Baker: A different charge.
Mr. Saint-Denis: And then we're talking about a totally different ball game, as it were, with more serious consequences available.
Senator Baker: Thank you.
Senator McInnis: The reason, is it not, that you brought this in is, to the extent possible, all police forces in Canada can operate with this offence? The other reason, of course, is you're trying to fight organized crime as well as loss of revenue. The law in Canada is you have to pay taxes on cigarettes, federal and provincial, except if you're an Aboriginal on a reserve, in which case you don't have to.
But part of the problem with contraband cigarettes is that the seizure of cigarettes by the RCMP went down markedly from the year 1999 through to the year 2004. The reason for that, as I recall, was that they reduced taxes to combat this. That's part of the root of the problem, I think. As Senator McIntyre mentioned directly, you had large corporations in this country that were sending it off to the States and smuggling it back in — unbelievable. They got caught, but that is part of the difficulty insofar as the smuggling and the contraband cigarette issue.
Mr. Saint-Denis: Well, you're quite correct. I think that the high excise tax on tobacco contributes to the problem. The differential in the cost is obviously something that a criminal group will bear in mind when they're trying to move a commodity of some sort. It happens that the tobacco commodity is heavily taxed, and so if they can get around that, they can offer an equivalent product at a much lower price, thereby making it attractive. That's true, but that's something outside of the criminal law area altogether.
Senator McInnis: Oh, I know.
Senator Batters: Thank you for being here today, Mr. Saint-Denis. My first question is related to Senator Baker's earlier question about the potential arguments on constitutionality.
This particular offence — we're seeking to put it in the Criminal Code — relates to the fact that contraband tobacco has become a significant problem. We have organized crime involvement, and we heard a lot of previous testimony when this bill was first before us that the same pipelines used to smuggle cigarettes are also used to smuggle drugs and guns and all of that kind of terrible activity. Wouldn't that bolster the constitutionality arguments?
Mr. Saint-Denis: Well, there's no doubt the pipeline, as you indicate, does not involve itself exclusively with contraband tobacco. Our understanding is, from the RCMP's experience, that those same groups move other things, such as firearms and drugs, on the one hand. You're right that that would be an argument that would be made, as well as the significant level of illegal activity in this area.
I think the most important argument would be that, in point of fact, this is what we think is a tailor-made approach to the problem in that we're not suggesting that simple possession be criminalized on the one hand. We're not suggesting that a first offender be subjected to a minimum penalty. We're saying that for repeat offenders on the one hand, plus where there are significant quantities of tobacco products involved and, lastly, that the individual has been prosecuted by indictment, under those circumstances there is the possibility of imposing a minimum penalty. We think that the courts would recognize the rationale to imposing this type of penalty and would sustain the constitutionality.
Senator Batters: Thank you.
The Chair: Mr. Saint-Denis, thank you for your contribution to our hearings; it's much appreciated.
For our second panel today, please welcome from the Six Nations of the Grand River, Chief Ava Hill and Richard Powless, Advisor; from the Algonquins of Pikwakanagan First Nation, Chief Kirby Whiteduck; from Anishinabek Nation, Jody Kechego, Senior Policy Analyst; and from The Association of Iroquois and Allied Indians, Grand Chief Gordon Peters.
Welcome, ladies and gentlemen. Good to see you all, and I understand you all have opening statements. We'll begin with Mr. Peters.
Gordon Peters, Grand Chief, The Association of Iroquois and Allied Indians: Good morning. I come from an association where most of our members have pre-Confederation treaties; these treaties pre-date the formation of Canada. As such, we continue to exercise their sovereign authority as those nations that shared their relationships with different nations, including Great Britain.
It's clear to the peoples who have signed those treaties that they are indeed nations, and at no time did they surrender their sovereignty to anyone. In fact, it's clear that, today, the Supreme Court is moving in a direction that begins to recognize not only land and economic rights but Aboriginal title as well. So that is the area that we see ourselves working with.
Bill C-10 is the issue at hand today. We're at a place where we believe that this particular bill should be withdrawn on several bases. First and fundamental is the duty to consult. It is clear that the Supreme Court of Canada has provided the Government of Canada with the honour of the Crown, which is a duty to consult. That duty to consult requires Canada to work with us, not only to consult but to be able to negotiate and accommodate us as well. That remains outstanding because there has been no consultation with respect to Bill C-10. In our eyes, Bill C-10 is an economic issue. Clearly, it is not something that we take lightly. It will impact our communities immensely.
This particular bill reaches out to our basic community population. In our communities, most of the stores are small mom-and-pop stores. We will have a huge loss of employment. Jobs will be lost. Families depend on this industry to survive. We fundamentally believe that should this bill go through, you will see a marked increase in our communities in social requirements, crime and violence. We know that when people have incomes they enjoy a certain quality of life, but when they lose their jobs all those things diminish. That's the table that is being set right now for our communities.
We're recommending that the federal government work with our communities to consider new models for revenue sharing that respect that nation-to-nation treaty relationship.
This follows with the discussion that I laid out this morning, namely that we should be talking about revenue sharing. Revenue sharing in the context of tobacco is one of the areas that we can do. With the shared jurisdiction, one of the areas that we may be able to develop jointly is the notion of a tobacco trade commission where we can share jurisdiction, work together and find solutions. Ultimately, with the heavy-handed and paternalistic approach of this bill, we need to find new solutions. It's clear with First Nations control of First Nations education that that heavy- handedness did not work because it was dealing with our children. This will touch our families in the same way. I am sure you will see the same things as you go forward.
We need to have a new definition of ``contraband'' because the definition of ``contraband'' right now is aimed directly at our communities. It doesn't deal with the contraband that comes from the major tobacco companies or from the other countries around the world, which are imported into Canada. Clearly we need to talk about what ``contraband'' really means with respect to our communities and to begin to differentiate that from First Nations' tobacco and how we see that working.
I think it's a clear responsibility for us to sit down and work together. The treaties have laid out that process for us to be able to do so and a failure to do that continues to violate the rule of law in Canada. We certainly believe that we can regulate. We have the power to be able to regulate. We regulate many things in our communities right now. Although we don't particularly support the Indian Act, that regulatory process is entrenched in the Indian Act as well. There is no reason why anyone should not be able to work with us to find regulatory solutions for us to uphold our way of being able to deal with tobacco in our communities.
I leave that with you. I put that out there for us. If there are any other questions, we'll be pleased to answer those questions after everyone has presented.
[Ms. Hill spoke in an Aboriginal language.]
Ava Hill, Chief, Six Nations of the Grand River: Hello. I am the chief of the elected council of Six Nations of the Grand River. We have provided background information on our community in our written brief, so I will cut to the chase with our comments on Bill C-10. I want to thank all the senators for inviting us here so that you can listen to our concerns about Bill C-10.
I want to expand on some of the issues that Grand Chief Peters has raised. I will begin with the destruction of our First Nations economies. This bill will have a devastating effect on our economy. It will create an economic void for Six Nations. It will mean a loss in our community alone of 2,000 jobs and unparalleled unemployment. Unemployment will be created in tobacco industry jobs related to tobacco farming, retail outlets, the manufacturers and the many spinoff businesses that generate revenue out of that industry. For many, this bill will lead to poverty.
This government has stated time and time again that it is all about creating jobs and economic stimulus. This bill will have the opposite effect and we can't help wonder why we are being singled out for such harsh treatment.
In other sectors in this country, if 2,000 jobs were being eliminated, Canada would step in with a bailout plan or an alternative economic stimulus. Where is our alternative? Forcing honest, hard-working people onto welfare is not economic stimulus. Is Canada going to provide us with more welfare money to assist these individuals who will lose their jobs? That's where they'll have to go if they lose their jobs.
The tobacco industry provides jobs where they otherwise do not exist. Many of the businesses are family owned, mom-and-pop entrepreneurs. This bill will be taking the food out of their mouths and that of their families.
The number of our citizens employed in the tobacco trade affects many families. Many manufacturers also grow their own tobacco which is used in local manufacturing. There is a group of these tobacco manufacturers in our community who are working with the both the elected and traditional governments to develop regulations to control and regulate the tobacco industry in our community. I understand that group will be making a presentation to you next week.
To us tobacco is a sacred plant which we have been using and trading for thousands of years. We see this as a jurisdiction and rights issue as well as an economic one. Canada is using its dominant force to take income from First Nations in favour of themselves, yet offering nothing in return to replace the economic benefits from First Nations trade in tobacco. When people have surplus money beyond the basics, they spend it in the local economy. That creates additional jobs in the local economy. Restaurants, local grocery stores and car repair stores are but an example. Not only will the Six Nations economy be devastated but surrounding non-Indian businesses in Brantford, Cayuga, Hagersville and Caledonia, the towns near us, will also be affected because our people will not have money to spend in those businesses.
This bill is not about crime but about lost tax revenues. While the federal government wants to portray this bill as dealing with contraband or illegal tobacco and crime, it is not. This connection to crime is a red herring and part of a fear mongering strategy used by this government into scaring legislators and legislatures into passing this bill.
A criminal defence lawyer from Toronto received 1,000 criminal cases involving organized crime gangs and found that only 5 of those involved First Nations members but none were related to tobacco.
Six Nations acknowledges that there may be a criminal element in many sectors of business and society, but it must be stated clearly that we do not support or condone any connection with criminal activity related to the tobacco industry. The truth is the majority of producers, growers and sellers at Six Nations are not involved in organized crime and they, too, stand against any criminal element being involved in tobacco.
High federal and provincial taxes have made this more profitable for those seeking to take advantage, yet governments will not consider cutting back on this profitable enterprise. Six Nations welcomes the efforts to squash out illegal activity connected with tobacco if or when it exists within our community.
Federal scare tactics also claimed that First Nations-produced cigarettes contained dangerous or unhealthy additives such as illegal drugs. Nothing could be further from the truth. Many of our manufacturers grow their own tobacco which is used in the production of the final product. As such, there is more quality control, and First Nations cigarettes, in many cases, are a purer product than those produced by the multi-billion dollar manufacturers.
Bill C-10 is really about Canada trying to protect its tax revenues at the expense of First Nations communities. Yet we never agreed to allow the Crown or Canada to impose taxes on us or to invade our tax jurisdiction. As Grand Chief Peters says, we have pre-Confederation treaties with the Crown. These treaties were recognized and protected in Canada's Constitution in 1982 and now form part of the rule of law in this country. All of this is to say that the relationship between the Iroquois nations and the Crown in Canada is one of an equal and an ally. Never did we agree to be subjected nor give the Crown or Canada the right to enact laws over us.
We have consistently pressed that position at the international level since 1924 at the League of Nations when the presentation was made by Chief Deskaheh. This interference with our internal affairs and jurisdiction is a direct violation of the Guswentha, which is the Two Row Wampum Treaty. Our right to self-determination was also recognized by the UN Declaration on the Rights of Indigenous People, which Canada has supported.
Put simply, Bill C-10 is a violation of Canada's Constitution and is therefore illegal and should be withdrawn. Bill C-10 may also be a violation of the Canadian Human Rights Act because it is focused primarily on First Nations communities.
The Chair: Chief, I will have to encourage you to come to a conclusion.
Ms. Hill: Should this bill proceed we will review all of our options, including a charge of violating our human rights. Also, Canada did not meet its duty to consult in drafting this bill.
I will skip right to our recommendations: that Canada withdraw Bill C-10 for the reasons cited above; that if Canada should decide to proceed with the bill, then they should make First Nations exempt from the law; that Canada should move immediately to adjust settlement of the First Nations lands rights — Six Nations has a long outstanding grievance and the federal government refuses to come back to the table to talk about it — and that they should do that and pay outstanding monies owed for stolen lands and resources; that both the federal and provincial governments share their billions of dollars in tax revenues from tobacco products with First Nations; that Canada withdraw this bill and refer it to Supreme Court of Canada as a violation of section 35 of the Canadian Constitution, the Canadian Human Rights Act and the duty to consult and respect the free prior and informed consent; and that Canada commit to a true consultation with First Nations rights holders across Canada, consultation that would be comprehensive with travel to all First Nations regions to discuss and seek input from First Nations on the larger issue of economic support for our communities, leading to resource revenue sharing agreements and tax treaties with our nations; and, lastly, that Canada engage in a process with First Nations to review all federal legislation for compliance with sections 25, 35 of the Canadian Constitution.
Kirby Whiteduck, Chief, Algonquins of Pikwakanagan First Nation: I am Chief of the Algonquins of Pikwakanagan First Nation. Pikwakanagan is the name of a reserve about 90 miles west of here. We're part of the larger Algonquin Nation. Our traditional territory is the watershed on both sides of the Ottawa River. We're also a member of the Anishinabek.
I would like to start off with some recommendations that the bill should be withdrawn as read and also that consultations should be done directly with all First Nations, including Pikwakanagan. If there is a need or desire to put in some regulations, there should be direct negotiations with the First Nations, including Pikwakanagan, and some broader regulations developed in common.
I would also like to state that the Algonquins of Pikwakanagan First Nation have never signed a treaty with respect to land surrender, so this building, the Parliament Buildings, the Governor General's residence, the Supreme Court of Canada, many international embassies and over 1 million people live on un-surrendered Algonquin territory. We never surrendered our jurisdiction, lands or rights, and because of that, the provincial and federal governments are currently in negotiations with us, although we haven't heard from Canada in 10 months. I'm not sure what's going on there, but they accepted the claim for negotiation because they haven't met the constitutional obligations.
The Algonquins have proven they occupied the territory at the time of contact when Champlain came here, just past this building in 1613, assisted by Algonquins. They were provided by a copy of the Royal Proclamation of 1763 that was signed by King George III, stating that lands of the Indians would not be taken or settled upon without a treaty to that effect. The Algonquins were given a copy of the Royal Proclamation and carried it with them for about 80 years, being a semi-nomadic people. They referred to that Royal Proclamation and the King's promise in many petitions and council meetings with Crown representatives. To this day there is no treaty and the Royal Proclamation that is referred to is still an existing document and is part of the Constitution in section 25.
Pikwakanagan has been attempting strongly to encourage and create economic development in the last number of years. We have built a couple of small business centres and we're helping to encourage businesses and economic development. A number of smaller businesses are occurring, including smaller family businesses as mentioned by my colleagues, where tobacco is being sold. It does involve elders, and in some cases grandparents and youth, who are trying to improve their quality of life. They are trying to provide better for their families and themselves, to buy a bicycle, put better clothes on their children's backs so they look half-decent when they go to school, and to help them with their schooling. So this all provides benefit to the local economy because a lot of that money is spent out at local businesses off reserve. If we're then labelled as criminals with the passing of this bill, you're labelling youth, grandparents and elders as criminals and, in this case, on un-surrendered Algonquin territory. We think that, in itself, is criminal.
This bill will have a very negative impact and it should not be passed. We have Aboriginal rights. Canada and Ontario accept that we do, and we feel that tobacco, the use of it and possession, is an Aboriginal right. When Champlain first came here, he was treated to a feast by the Algonquins and with the use of tobacco involved. On his way back down the river, he also witnessed the Algonquins with tobacco just over here up at Chaudière Falls. Tobacco has been used by the Algonquins before contact and ever since.
We also have a case where we may have Aboriginal title. I think everyone is aware of the William decision that just came down at the end of June, which said semi-nomadic people, such as the Algonquins, may be able to prove Aboriginal title and a degree of ownership of land. We've asserted title many times with the government and if we can prove it, then we have ownership. The court also said that if the government implements a development, project or impacts rights, and a First Nation can subsequently prove title, we can go to court and have that decision, that development overturned and removed no matter how much it costs. We may have to do that. That's an option for us if this bill is passed. We were not consulted. It impacts our rights, it contravenes the Constitution and it may contravene the Supreme Court of Canada decision. We may resort to remedies, possibly lawsuits, et cetera. Our options are open to us. Hopefully the honour of the Crown prevails and this bill is not passed.
Jody Kechego, Senior Policy Analyst, Anishinabek Nation: I will be reading a prepared statement on behalf of Grand Council Chief Patrick Wedaseh Madahbee of the Anishinabek Nation.
The Anishinabek Nation represents 39 First Nations in Ontario. The Anishinabek Nation follows the principles of traditional governance, language and cultural practices that are common among all Anishinabek people.
Anishinabek First Nations remains sovereign nations according to international standards.
The Government of Canada has no legal right to regulate tobacco within First Nations treaty and traditional territories. Tobacco is an indigenous plant to North America and First Nations peoples cultivated and traded with tobacco for hundreds of years before and after the arrival of the first European settlers in Canada. We did, in fact, introduce tobacco to the world. The Anishinabek Nation has never, and I reiterate, never, in any treaty or legal agreement, relinquished, surrendered or given up its right or authority over tobacco to Canada or the British Crown. Canada's rules, regulations and laws, whether through legislation or departmental policy, are subject to First Nation- Crown treaty agreements, especially treaties that predate the British North America Act, 1867. Anishinabek First Nations tobacco, whether it is cultivated, manufactured, bought, sold or used as a trading good, has always been under the full power and authority of the Anishinabek First Nations.
Anishinabek First Nations have inherent relationships with their land, water and all elements of the natural world. We recognize and honour our treaty rights as a means to protect our inherent rights that were gifted to the Anishinabek peoples by Gitchi Manitou, the creator of all things. Our rights were not given to us by the British Crown, the Canadian government or any other persons or government who are, in fact, immigrants on our land.
All natural resources within Anishinabek First Nation territories are subject to treaty and inherent rights, especially tobacco as it is central to all Anishinabek cultures and economies. No First Nation has ever agreed to be taxed in its own territory, and Canada has yet to pay its own debts for the numerous treaty breaches and abuses in exploiting natural resources within treaty boundaries, including tobacco.
The British Crown and Canada have never conquered First Nations peoples through war or any other means. Instead, they made treaties with First Nations in the interests of land and military alliances. Historical and legal documents clearly support the position that First Nations people have always maintained their right to fish, hunt, and cultivate tobacco and other indigenous plants. Bill C-10, an Act to amend the Criminal Code, if it should come into force, in fact will have a negative impact on First Nation rights, economies and First Nation families. According to Canada's own laws, Canada must consult and accommodate First Nations where they are contemplating actions that may negatively impact First Nation treaty and inherent rights.
The Anishinabek Nation has no faith that the federal government of Canada will honour its duty to consult and accommodate First Nations on Bill C-10. By regulating tobacco within First Nations communities and, moreover, criminalizing First Nation citizens who have family-owned businesses, Canada is once again breaching its treaty relationship with First Nations and also breaching its fiduciary obligations.
It is well known that First Nations lead every ethnic group in Canada in poverty, homelessness and incarceration on their own land. Tobacco has allowed many families in many communities across the country to find their way out of poverty and maintain an average standard of living. Now with Bill C-10, Canada has decided that it's time to punish First Nations by making it more difficult for business owners to make a living while rewarding itself as a government by collecting more tax revenues.
Today, tobacco is a major commodity in all global markets, and the federal and provincial governments receive billions of dollars in tobacco tax revenues annually. We introduced tobacco to the world, and now you want to regulate us and charge us taxes for cultivating our own plants, while families suffer from poverty and all the social issues that come from poverty. This is a moral issue as well as a legal issue.
Canada is once again proving that First Nations peoples have no reason to trust the government that makes laws in order to produce revenue and criminalize underprivileged families. Tobacco has never, in the history of indigenous use, been viewed as contraband. But this government has decided to introduce legislation and change the terms of tobacco as it sees fit, paying no mind to the historical or cultural relationship developed over centuries of cultivation, trade and commerce. First Nations' resolve is again being tested by a government that is making up rules and terms as it goes, with no due process, no consultation and no honour.
I encourage the present and future generations of the Anishinabek Nation to heed my warnings: Do not trust governments and do not make treaties with them because they have proven that they do not honour treaties and they take advantage of the most vulnerable in order to feed the most privileged. Until government honours its treaty obligations, we have no friend in government.
This statement is signed by Grand Council Chief Patrick Madahbee of the Anishinabek Nation.
The Chair: Thank you. We'll begin the questions with the deputy chair of the committee, Senator Baker.
Senator Baker: Thank you, witnesses, for your testimony before the committee today. Some of us older parliamentarians read a lot of case law on many decisions of the court as they relate to charges under the Excise Act, the Criminal Code and provincial laws. One thing that struck me when reading the reported cases was the incredible amount of regulation that you have on your industry.
I recall a case recently where a truck was stopped. The officer inspecting the truck wanted to see seven permits that the person had to have to move, manufacture, sell, transport, import and export, whatever. One permit was not up to date. Guess what happened? Everything was seized, including the money.
I can't imagine. How did we get to the point where you have to produce so many permits? You have to go to the province and get permits under their legislation, and then you have to comply with federal legislation. How did you get to the point you're at today? Everything is controlled, even the number of cigarettes that can be sold in a store — a quota. Imagine if you had a quota in every other store in this country on the number of cigarettes they are allowed to sell. I can't for the life of me figure out when we got to the point we're at today with so much regulation that you have to go through. What's the answer to that?
Mr. Kechego: In my mind, the answer to that has to do with colonial practices, disease starvation and the bleeding out of First Nations people over the past few hundred years. At the time of contact and at the time of the Royal Proclamation, 1763, we had the largest military in North America, and we had alliances with the British Crown. Within an 80-year period, up to 90 per cent of the indigenous population had died of European diseases, and Canada subsequently continued with residential schools, et cetera, legislation and regulations to regulate First Nations peoples.
Richard Powless, Advisor, Six Nations of the Grand River: A few years ago, former Auditor General Sheila Fraser did a report. She said that First Nations communities supply, on average, 64 reports a year to the Canadian government. I think it makes us one of the most accountable governments, communities in Canada. We really don't understand the overemphasis. The federal government recently passed the First Nations Financial Transparency Act, again requiring more and more reporting. Of the 64 reports, she said that the majority, 90 per cent, simply sat on shelves and were never read. We ask the same question: Why all the reporting?
Senator Baker: Ms. Hill, did you want to offer anything?
Ms. Hill: I agree with what they're saying. It's been forced upon us. When people want to make a living, they get along with the regulations that have been forced on us; but our people are standing up now and saying, ``No more.'' We're not going to put up with it anymore.
You talked about the requirement for permits. I want to tell you a story about a gentleman who came into my office the other day. About six or seven years ago he had to have a heart bypass, so he had no income. He decided that he would transport some tobacco from our community to another First Nations community, Akwesasne. He never left the country. He went to Cornwall Island, picked up some cigarettes, came back and got stopped on the 401. Everything was seized because he didn't have the seven or eight permits that you talked about. They seized him and fined him. That was six or seven or eight years ago, and they are still harassing him, trying to get him to pay $30,000. All he was doing was trying to make some money so he could buy some food and clothes for his kids. He couldn't work because he had a heart bypass.
That's just one of the situations that we deal with. I have people coming into my office telling me these stories. It's been forced on us. How did it get to this point?
People don't like getting harassed by saying, ``You owe us this much money or we're going to throw you in jail.'' How are they going to look after their families if they're thrown in jail? In some cases people have gone along with it but, as I said, we're becoming more progressive and knowledgeable. We have a young population that knows what they're doing and is becoming more demanding.
Senator McIntyre: Thank you all for being here today and for your presentations. There's no question that First Nations believe that the use and trade in tobacco is an inherent right that should be constitutionally recognized under section 35 of the Constitution Act, 1982. My understanding is that as an alternative to Bill C-10, First Nations would like to see the tobacco business regulated by band councils. From what I understand, regulation would ensure that profits are reinvested in the community.
I know that sometime last year the Mohawk Council of Akwesasne received a grant from the Government of Ontario to assist them in developing an Akwesasne tobacco law and regulatory framework. I'm sure that you're aware of this. Could I have your comments, please?
Mr. Peters: We are well aware of the pilot that Ontario started with Akwesasne in trying to determine how they're going to regulate tobacco products. I believe fundamentally that it's part of an ongoing process that needs to happen with a number of areas.
Earlier the gentleman asked what happened. Well, what happened was section 91.24 of the BNA Act, where Canada took responsibility for Indians and lands reserved for Indians, and from that point on Canada just dominated us.
As we go forward today, we have built that capacity in our communities to do the very things that we're talking about here. It is a way forward. I have suggested a number of areas with respect to how we might be able to do things on a shared jurisdictional basis, any kind of a tobacco commission, any way that we can to be able to work forward. We're able to talk to the Ontario government and we're able to work with the Ontario government in many areas. Our problem is that we are not able to work with the federal government.
The federal government has refused to work with us. The Conservative government has refused to talk to us about many of these issues. We have not had an opportunity to sit down and try to figure out how we might be able to work together. It hasn't happened, and that's the difficulty that we face.
Senator McIntyre: How is the Akwesasne pilot project coming along?
Mr. Peters: From what I understand, I was talking to Grand Chief Mitchell about the process. It's a requirement that you have to go back into the community and talk to all of your vendors, to the manufacturers, people who grow tobacco, and you have to begin a process of getting them to understand how they can move forward and the best way of being able to organize themselves so that they can come under that given process.
They are moving forward and they are making progress. Grand Chief Mitchell said the most difficult part is over. The most difficult part is talking to those people who are in the industry. For the most part, people in that industry didn't come to the community councils. They didn't go to any kind of grants or programs or services to start their businesses. Most of them started on their own. So when you go to them and you say that they need to fall under a regulatory process, it becomes difficult for them to be able to accept that.
They have done that and that's an important step in being able to get to do that. Only time will tell us for sure exactly how it works, but it's moving forward very well.
Senator McIntyre: Thank you, Chief Peters.
Ms. Hill: Could I just make a few comments?
The Chair: Very quickly.
Ms. Hill: I know he mentioned that some communities want to do their own regulations and that's what we're doing. The band council, per se, is not doing it. We have the tobacco manufacturers coming together in a group amongst themselves. They are the ones that are in the industry and know best what needs to be done. They are developing it with our assistance and also with the assistance of our traditional government. They're looking at regulations. They're going to control it, and if they develop it then they can help police it once it's done. We're moving forward in that respective, and I think that's the better fit for us, that we're going to control it and regulate it ourselves. We are working on that and we can do that.
If we want to call it our own tobacco commission, they will do the stamping, the inspections and the control. They're going to set strict rules about who can buy it and about partnerships and a number of things. As I said, they're working on it. That's something that we really support as an elected council. We do have the jurisdiction and the right to do it, so they're moving forward in that perspective.
Senator Joyal: It's a pleasure to see you, Chief Hill and Grand Chief Peters. We've known one another for many, many years. I will not say a century, but we were in a different century; it was another time. At that time we were debating section 35 of the Constitution Act, 1982, in Parliament about the recognition of treaty rights.
Last summer, when I read the decision of Supreme Court of Canada in relation to your treaty rights and, as Mr. Whiteduck has mentioned, about the Aboriginal territory that was not the object of a treaty, which was essentially the context into which the decision was made by the court. The court nevertheless recognized that there are public purposes for which the Canadian government could adopt legislation when there is a public purpose. For instance, in matter of health, if there is public health at stake, of course, then everyone will recognize that the protection of the health of individuals is a fundamental objective where everyone should concur in it.
Do you interpret that decision as limiting in any way your capacity to trade tobacco with whatever constraints might be attached for other purposes than the mere commercial transaction?
Mr. Whiteduck: I think the court does say that, but the court also says the government has to take the least intrusive measure in order to adopt that. In this case we think this is a heavy-handed approach. I note the question from Senator McIntyre. I believe this is connected to that. In our community, if there's going to be regulations, then the retailers want to regulate themselves, probably with the assistance of the council. That would be a less intrusive way to achieve the objective of government. I agree that that's probably the approach the courts would prefer.
If the bill is passed and we do go to court, one of the things that we would be looking at is if there is infringement of a right, you have to take certain steps and do it through the least intrusive method.
Senator Joyal: Thank you.
Mr. Powless: I just want to give you a different perspective of the background to that question. The courts are an instrument of the state, and as nations we have a treaty with the Crown that was adopted by Canada as equals, as co- partners. The Two Row Wampum Treaty has two parallel lines; in the same way they never meet, our nations are not meant to interfere. It's a non-interference treaty.
Fast forward, we're asking ourselves: Where did Canada get the authority to pass these laws and impose them on us? There is no treaty whereby we surrendered our right to self-government, self-determination. So we ask ourselves, why is the state using its institutions to impose its will on us again? We ask ourselves how Canada's court gets to determine our rights when we're supposed to be partners. That's the other perspective on that question.
Mr. Peters: I find it quite amazing that you could recognize Aboriginal title, land that people have occupied for a long, long time before contact, and that it can somehow be regulated by the federal government. That's a difficulty I have with the court decision.
I know the process of the infringement and other areas that are there, but it's just a notion that the same principles that are applied to Aboriginal title in that decision are the same principles that were applied almost from the very beginning of contact, and that somehow people who came here to our lands were superior to us and we were not able to look after ourselves; we were not supposed to be organized; we're not supposed to have governments and all these things, and therefore they had a right to take our lands and had a right to do with us as they pleased.
That theory, that doctrine of discovery, whether we agree with it or not or whether we come to our own personal conclusion, is part of the Supreme Court of Canada. It's still there. We can deny it, but it's there. For us, when we sit on this side of the table and we're talking to the federal government, no matter which party we're talking to, we come with the same position. We come with the same knowledge. We come to talk about the same things, and we come to say that we have never extinguished our inherent right; it's never been there.
In fact, former Prime Minister Brian Mulroney during the Charlottetown Accord recognized the inherit right, unfettered right. It went to a referendum in Canada. Basically, the agreement was dead when Quebec voted against it, but the matter still stood, that there is that inherent right that exists, and governments have recognized it. The Rae government in the early 1990s recognized it.
Those things are valid. The issue we come here many times with is why do we continue to have this battle? How much money has the federal government spent on litigation?
The Chair: We have to move on. I've got a long list of senators who want to ask you questions.
[Translation]
Senator Dagenais: I would like to welcome our guests. I must let our guests know that I was a police officer with the Sûreté du Québec for 39 years. Grand Chief Peters, I had the opportunity to work on the Akwesasne reserve in 1990 when two members of your community killed each other because of the cigarette smuggling that was taking place on the Snye River. I was then called to work in Kanesatake, since Grand Chief Gabriel's house was burnt down because he opposed cigarette smuggling. In fact, the Aboriginal police officers were thrown out of the territory. We had to ensure the safety of your community members for a number of years, because they were afraid of cigarette smuggling and organized crime.
I worked on the Kahnawake reserve, among others, because a great deal of cigarette smuggling was happening on the Mercier Bridge. I myself stopped a number of vehicles there. You may not have known, but cigarettes used to be brought in float planes that landed in the middle of the night on the St. Lawrence River.
You talked about the economy and treaties, but I would like to hear your comments on the security measures you have in place for the members of your community. We left Akwesasne but we always had a very clear idea that not everyone agreed with the smuggling on reserves and that some were afraid to speak out because of reprisals. What security measures do you now have in place for your communities in response to cigarette smuggling, which seems to be a scourge akin to organized crime?
[English]
Ms. Hill: Six Nations council, although it is underfunded, does have its own police force. We have had our own police force in place for quite a while. As I mentioned earlier, if we get into the position of regulating and controlling the tobacco, our community members will help police it, because we're going to build regulations into that, and we're going to do a lot of community work within our own community so that people understand what is going on.
Is there going to be opposition to it? Yes, there's always opposition to everything, but we are prepared as a community to go out to our community and start educating people and saying, ``This is what is going to happen if we don't start looking after our own internal affairs.'' That's what we're prepared to do, with the assistance of our Six Nations police force and, if necessary, our police force will drag in other police forces if they need it. We are prepared to look at the security in our communities.
You're talking about two other communities. They have their internal problems, which I'm sure that they can deal with. What we don't need is interference that is going to make more problems for us, and that's what this bill will do. It's fear mongering. It's getting our people afraid. When people do that, they sometimes do things that they shouldn't have to do or they shouldn't do.
So we are going to work with our community. I've already had two or three community meetings talking to people who are involved in the industry. Our community doesn't want any organized crime there. If it's there, we're going to work to get rid of it. We're going to make all those efforts, and we're going to do it by educating our own community and getting everybody onside. When people are part of the regulations that are going to take place, they will help police it. They will help us, and that's our message to our community members.
As I said, we have our police force that is very supportive of us, and we're working very well with them.
The Chair: We're running on a clock here, and I want the opportunity for every senator to ask at least one question.
Senator Batters: Chief Peters, you were earlier speaking in your opening statement about how you feared that the passage of Bill C-10 would lead to an increase in crime and violence in your communities. When we dealt with this particular bill — we've just started re-examining it — in a significant way last year and had many witnesses before us, we heard considerable testimony about organized crime involvement in this particular issue of contraband tobacco and these pipelines being used — as I referred to with the previous witness from the Department of Justice — not just for contraband tobacco but also for guns and drugs and all kinds of terrible criminal activity. Wouldn't you acknowledge that the passage of Bill C-10 and what we're trying to accomplish here is to decrease the crime and violence in your communities? That's a significant matter that we're trying to accomplish here. Wouldn't you acknowledge that that will, in fact, result?
Mr. Peters: Thank you, senator.
No, I don't see this legislation being able to do that at all. You drive whatever processes are there underground and then it creates a whole series of things that in fact create more problems.
Senator Batters: How would that happen?
Mr. Peters: I'm reminded of this study that was done with the thousand cases and no criminal activity.
I will tell you very quickly about the flip side. The problem of why this happens in our communities is because we don't have any control. We're band councils. We don't have any control. If we exercise jurisdiction, we could fight this thing. We could have control, but the problem is that we don't have that jurisdiction right now.
The Chair: Four senators remain with questions and I ask for the responses to be concise. We're going to run over time, but I want to give everyone an opportunity.
[Translation]
Senator Boisvenu: Welcome. I am pleased to hear that the cigarette industry is the livelihood of many families on your territories, despite the fact that cigarettes kill 50,000 Canadians every year.
I read the RCMP's report saying that approximately 175 criminal groups are involved in the illegal trade of cigarettes. You are saying that this supports many small communities, but I must tell you that this also supports many non-Aboriginal criminal groups outside your reserves.
In Sept-Îles, cigarettes have been seized recently that were manufactured in an Aboriginal community, but the white people are basically living off the sale of cigarettes made in your communities. Are you equipping yourselves with operational mechanisms to control the cigarettes that leave your reserves so that they do not end up in the hands of non-Aboriginal criminals who live off your industry?
I agree that Aboriginal communities depend on this industry. I would give you all the powers, but the problem is that non-Aboriginal groups, predominantly involved in organized crime, live off your industry.
Could you tell me what steps you can take to equip yourselves with adequate control mechanisms to stop supporting these criminal groups? This is what gives a bad name to the cigarette industry on Aboriginal reserves. There are also non-Aboriginal criminal groups that live off it.
[English]
Mr. Peters: The problem is that at this point what happens to us is that when we manufacture cigarettes or sell cigarettes, we're limited to the on-reserve economy. That's the biggest problem. If the federal government was prepared to work with us and develop that economy and we could sell our cigarettes publicly to Canadian citizens, we wouldn't have intermediaries. We'd be able to do that directly.
So the solution, we said today, is to help us get to a solution. Let's work together so that we can eliminate those things. Right now, we can't because we only sell cigarettes in our communities.
Senator Plett: Chief Hill, you told us a very sad story about an individual who had a heart condition and took measures to try to get some resources to undergo heart surgery or whatever it was he was going to do with the money. Nevertheless, he was breaking the law. Whether he liked the law or not, he was breaking the law. Whether the law is fair or not, he was breaking the law.
I don't want to debate whether this is a good bill or not. You've said it isn't and some people are saying it is. How do you justify supporting somebody breaking the law, whether you like the law or not? That would be my first question.
My second question, chief, is that, in the Brantford Expositor, you did an interview with a reporter where you said that if this bill passes, ``I can't guarantee that there isn't going to be some violence.'' What did you mean with that statement?
Ms. Hill: Firstly, I don't think he was breaking the law. We're a sovereign nation, and we don't think that Canadian laws are applicable to us. We can develop our own laws.
Senator Plett: No matter where you are?
Ms. Hill: I think that we have the inherent authority to trade between First Nations, and that's what we were doing, between Akwesasne and Six Nations. He was using the 401. That's where he was stopped, so I don't agree that he was breaking the law. I think that is another part of it; we have the inherent right to trade with each other. We've been doing that since time immemorial.
With respect to the comment I made that I can't guarantee that there won't be violence, that's what I've been hearing from people in our community.
Senator Plett: What kind of violence?
Ms. Hill: Who knows? I'm not condoning violence, but people are saying that if this bill is passed and people try to swoop in on our people or try to do raids in our community, they will do whatever they have to do to protect themselves.
Senator McInnis: I want you to distinguish the tobacco industry on your reserves from situations that I've seen. For example, at Membertou in Cape Breton and Millbrook in mainland Nova Scotia, there is everything from casinos to convention centres, to convenience stores, gas stations, movie theatres, all kinds of businesses. Of course, they operate, I presume, and are built under the building code and laws of Canada and laws of Nova Scotia, I rather suspect, zoning and so on. This takes place, I'm sure, up here as well on your respective reserves.
Distinguish this for me: What I'm gathering is that you would like some form of regulation where you could be a competitor — a minor competitor, perhaps, at the beginning — with Rothmans or Macdonald's cigarettes? Am I getting that? Is that what you're looking for ultimately? You want to run a business.
Mr. Kechego: I think with the presentations that we're providing here and with this bill, the intent here is to stop criminalizing First Nations for inherent and jurisdictional rights that we've always had. The idea of being competitive in business is open for dialogue, but the federal government has never opened that dialogue.
Senator McInnis: That's a wider discussion than this committee.
Mr. Kechego: Exactly.
Mr. Whiteduck: I think we're trying to become competitive, to develop economies, to be self-sufficient, and we're trying to find ways to do that. I know there is the question that there is no treaty in our case, and short of that, we're making the best efforts that we can, in any way possible, without trying to create conflict. There are no gangs in Pikwakanagan. There is no criminal activity in Pikwakanagan. There might be in some other cases, but I don't think everyone should be punished through this bill.
We just want to continue to the try to end the constraints that we have, to be competitive and to increase the quality of life and the stability of families and income in First Nations communities.
I don't know if that specifically answers the question, but it kind of touches on the topic.
Senator McInnis: I haven't seen the evidence, but allegedly contraband cigarettes are being smuggled or being imported. That's what we're talking about here. In the long-term, I think what you're looking for is the regulatory regime whereby you could operate a business that would compete. You mentioned 2,000 jobs that could be threatened here. No one wants that if they're done legitimately, but you can understand the problem here.
Mr. Whiteduck: If there are going to be safety concerns, et cetera, then we would definitely want to have some kind of regulations of our own in place. I don't believe they are contraband in our case here. I clearly understand what Grand Chief Peters is saying because it's hard for me to figure out why other people are making laws here and making us criminals by passing laws when there is no treaty. You have your Constitution; you have section 35 and 25, which say that we are supposed to enjoy the rights and freedoms pursuant to the Royal Proclamation, which says that people and governments will not occupy and settle this territory unless there is a treaty. What do we have here? The City of Ottawa, Canada. I have a hard time dealing with that. It's hard to fathom how that can continue to happen. It just bothers me all the time when I think about that because it's contradictory. I don't believe our trade in tobacco is contraband. That's my position on it.
Senator Joyal: In previous testimony that we heard from the representative of the Department of Justice this morning, the statement was made that the issue of the sale of tobacco outside the reserve or on the reserve is not covered by treaty. It's not a treaty right. So with it not being a treaty right, there is no formal obligation to consult and accommodate Aboriginal perspectives. Could you comment on that, Mr. Powless?
Mr. Powless: I think the mistake they're making is that they're defining our territory as the small, postage-stamp sized reserves that we now have. The reality is that, for the Six Nations, for example, we're on 50,000 acres now, but the original territory is 1 million acres — from the source of the Grand River, six miles on either side. It's like that for every First Nation in Canada. What their small reserves are now and their traditional territories that they use to survive, that's their territory. That's the Aboriginal title that was decided in the Supreme Court's Tsilhqot'in decision. That's the Aboriginal title that's unsettled. When you're talking about jurisdiction over territory, that's the territory you're talking about. So the sales, we can't control what happens off the reserve, when the product is taken off the reserve.
I want to make a comment about the gang issue. There is criminal activity in every facet of life and everywhere. Everyone knows that. You see it on TV and in the media all the time. It's going to exist. What we're saying is we don't condone it. If it exists, we're going to try to get rid of it in our community.
Second, I think there is a real simple solution to this, which the federal government knows but they don't want to take: Reduce the taxes and you'll get rid of the criminal interest in this area. Reduce the taxes. It's very simple. You guys have a majority government. You could do it tomorrow. There's your solution, but don't punish impoverished communities that are trying to take advantage of a legal product. Don't criminalize possession of a legal product.
Senator Batters: The point you brought up about the taxation, we heard earlier that this is a two-pronged approach. There are criminal law issues that need to be dealt with regarding this piece of legislation, but there are also significant health issues that we're trying to deal with. The sale of tobacco is significant, and it's something that your people, Aboriginal people, are greatly affected by.
Chief Hill brought up the example of a man with heart disease. Well, smoking is one of the most significant risk factors for heart disease, and we haven't even touched on cancer. We haven't even heard that word yet in this discussion today.
One of you said in our opening statement that this is a moral issue as much as a legal one. How do you deal with the massive issue that this is a very significant health issue for all Canadians and your people?
Mr. Kechego: First of all, related to the last question, the Department of Justice is wrong. This is a treaty issue. There are many treaties in Canada, not just one treaty. The Department of Justice has been proven wrong time and time again in many specific claims and court cases.
On your issue about health, Bill C-10 does not address health issues; it's a crime bill. The Government of Canada has never approached First Nations to have an open dialogue about how to address the health issues with cancer and tobacco, et cetera. This is strictly a bill aimed at revenue and criminalizing First Nations on tobacco and regulations.
Why doesn't the government criminalize du Maurier, Rothmans and others that have poisonous additives and have historically proven that their cigarettes are massively distributed and kill more people than anything else in this world?
Why all of a sudden is it a health issue when small First Nation tobacco companies start up and aren't paying regulatory taxation on reserves? It doesn't make sense. If this is about health, let's have a health discussion. There has been no health discussion or health issue addressed in this bill.
Also, on the crime element, can this government guarantee that, as a result of this bill, only the criminal element — organized crime, as you say — will be labelled as criminals? We've already seen in newspapers that families raided by police have been labelled as ``organized crime,'' and it's false. This whole premise and intent is a smoke-and-mirrors tactic.
The Anishinabek Nation does not believe the intent of the government is for the good health of Canadians. If it was, then we'd have a health discussion.
The Chair: Thank you very much. We're going to have to wrap it up there.
We want to thank all of you for being here today and expressing your views on the issues before us and answering our questions. It's very much appreciated.
(The committee adjourned.)