Absolutely. It is peanuts. Incidentally this would break down to about $20 million a year.
Ten million dollars would be going toward education and the other $10 million would be going toward enforcement. In other words, I guess we would have cigarette police out there.
Senator Kenny's bill would raise $120 million a year at the manufacturing level which would be about 5 cents a pack. This is so illogical I cannot believe it. But the finance department argues that it could not do that because that would break its agreement with the provinces not to raise taxes or prices on cigarettes from coast to coast. In other words, there has to be federal-provincial agreement to do that.
That in itself is a fallacious argument because what the government is basically arguing is that if we indiscriminately raise the price of cigarettes across the country we are going to get into another smuggling problem like we had in the early nineties.
The smuggling problem was addressed by the government in 1994 when it capitulated again to the cigarette giants, the cigarette manufacturers, the tobacco people. It was the single largest reduction in taxes in the history of Canada. It cut the price of cigarettes almost in half by taking away a big chunk of the tax component.
The government caved in to the smugglers at the expense of young Canadians. Because of that capitulation we have seen the single largest increase in the number of new smokers in the history of Canada ever since, year after year. It is just like a rocket taking off.
What we are saying is that the time is right to enforce that 50 cent levy per carton at the manufacturing level. Why is the time right? Because if we look to the border states of the United States we will find that we are pretty well on par with where they are in terms of price.
The smuggling issue is not going to be as big an issue as it was in the past. Although, I think what we should have done then was to enforce our own laws and get tough on the smugglers. I do not think we should have capitulated to the Mafia kings or the smugglers, but this government did.
Let us take a look at my home province of New Brunswick. In New Brunswick people are paying $3.74 a pack. That was as of September 30, 1998. If we bought a pack of cigarettes in the state of Maine today we would pay $4.10 Canadian, given the fact that our dollar is much weaker than theirs. That is another story.
In other words, in Canada we would pay $3.74 and in Maine we would pay $4.10. There would be a 36 cent difference in our favour. We have room to increase the cost to help educate young Canadians about smoking. I think the government should do it.
This is something that I have to put on the record. The tobacco manufacturers have absolutely no credibility when it comes to arguing their case. The manufactures at one time argued that there is a death benefit to smoking. They actually commissioned a study to prove this. The manufacturers said that there is a net gain in Canada if we all smoke.
Their reasoning went like this. If we smoke we are going to die younger. Therefore, we are not going to be collecting as much old age pension because obviously we will be dying younger. We are not going to be collecting as much Canada pension because we will die younger. We are not going to be receiving any health care benefits because we will be dead. Cigarette manufacturers actually commissioned that study and expected Canadians to believe it.
I go back to my basic argument. The attack on cigarette smoking can only be done in three ways. It has to hit the price, that is the tax on cigarettes, because the government can control prices through taxes. There is a direct correlation between price and consumption. Economists call that fundamental pricing theory. In other words, if the price is high enough fewer people will smoke the product because they will put their money some place else.
The second way is advertising and the third is education. In other words before we could support any tobacco legislation in the House, all three of those components have to be in the bill. Unfortunately they are not in the bill. It has been weakened and weakened badly.