$6 contraband cigarettes

It is a commercial strip unique in Canada. On a short stretch of highway crossing this Mohawk reserve, one smoke shack after another beckons with signs advertising the low price of $6 for a plastic baggie holding 200 cigarettes.

Some shops opt for such native-inspired names as Wigwam and Bear’s Claw; Another Dam Cigarette Store pokes fun at the proliferation of the businesses. Even the computer store offers a daily special on cigarettes.

The unchecked expansion of contraband cigarette sales has meant an economic windfall for this community of 9,000, just across the St. Lawrence River from Montreal. An RCMP report published last week said there were 125 known contraband smoke shops in Kahnawake in 2006 — more than anywhere else in Canada — with new locations opening all the time.

Shop owners can be seen driving Mercedes and Cadillac Escalades, and the Grand Chief boasts cigarette sales have eliminated unemployment. Nationally, the illegal trade is worth hundreds of millions of dollars a year, according to the RCMP.

But the business comes with a significant cost. The cut-rate cigarettes make smoking affordable for children both on and off the reserve. The head of Imperial Tobacco Canada cited evidence last week that as many as 70% of the cigarette butts found in some Quebec schoolyards are illegal.

Governments are losing out on $1.6-billion a year in taxes. And even Kahnawake Grand Chief Mike Delisle, while defending the Mohawks’ right to sell tax-free tobacco, acknowledges that the lure of easy money has attracted organized crime to his community. “The infiltration now of outside influence and forces and organized crime — gangsterism as they call it –it really can’t be denied,” Chief Delisle said in an interview.

The Mohawk police force, known as the Peacekeepers, are seeking out these elements “to have them disposed of from our community,” he said.

Kahnawake smoke shops aren’t worried about tough enforcement talk

That apparently is not enough for the RCMP and federal Public Security Minister Stockwell Day, who have announced a new push to stop the trade in illicit cigarettes. The Minister singled out Kahnawake as well as the Six Nations and Tyendinaga reserves in Ontario as particular hot spots. In the smoke shops of Kahnawake last week, nobody was too worried about the tough talk from Ottawa.

“It’s none of Quebec’s business or Canada’s business. We don’t bother them,” said one seller, who insisted on anonymity. “They’re supposed to stay in their canoe and we stay in ours, and we don’t cross over.” Like others in the trade, he predicted that any enforcement action by outside police would end badly. “There’s no tension right now, but if there is, there are going to be funerals on both sides, off the reserve and on the reserve.”

The 1990 Oka crisis, which left one provincial police officer dead at nearby Kanesatake and prompted a lengthy Mohawk blockade of the Mercier Bridge next to Kahnawake, is never far from authorities’ minds when considering how to tackle crime here.

Two years before Oka, an RCMP raid on Kahnawake tobacco vendors led to 17 arrests and the seizure of $450,000 worth of tobacco products. It also triggered a 29-hour armed standoff when, in retaliation, Mohawks blocked highways through Kahnawake.

Since those clashes, the cigarette trade has been left to grow unfettered. Cuts in federal and provincial tobacco taxes in 1994 temporarily reduced demand for contraband, but it has surged back as taxes returned to previous levels.

Contraband cigarette sales have topped 50 million cartons per year

In 2006, the RCMP seized a record 456,333 cartons across Canada. That was a 16-fold increase from 2001, but still a tiny fraction of last year’s estimated illegal trade of 50 million cartons. Some of the cigarettes are being produced in facilities on Kahnawake, but the RCMP says most come from illicit manufacturers on the U. S. side of the Akwesasne Mohawk reserve, which straddles the borders of Ontario, Quebec and New York State.

“These cigarettes come from different manufacturing operations, ranging from small ad hoc operations to fully equipped manufacturing plants involving serious organized crime groups,” the RCMP’s Contraband Tobacco Enforcement Strategy says. It adds that an estimated 105 organized-crime groups are known to be involved in the illegal tobacco trade nationwide and notes “a growing disregard for the law and escalating violence within the contraband tobacco trade.”

Federal and provincial governments have no business trying to regulate native tabacco sales

John Stacey, the owner of Kahnawake Tobacco Manufacturing, said the federal and provincial governments have no business trying to regulate the native tobacco trade, even if almost all his customers are non-natives. “Everything we do, they want their cut, and they want us to ask permission. That’s not the rules over here.”

Mr. Stacey has carved out a niche among the scores of other Kahnawake smoke shacks by hiring employees who speak French, the mother tongue of most customers.

He portrays the Mohawk tobacco trade as deeply rooted and integral to the Mohawk identity. “Indians and tobacco are like oil and Arabs,” he said. “To us the plant is sacred.” He also cautions against police intervention: “Maybe they should think twice before coming in. We’re ready to defend our right.”

Mr. Delisle, the Grand Chief, recognizes that something needs to be done to control the current tobacco free-for-all. At the moment, anybody on the reserve can open a smoke shack and sell cigarettes.

Rules, he said, would have to be set and enforced by the aboriginals themselves. He talked of creating a Mohawk regulatory body to patrol the industry and said he is in contact with other aboriginal communities about co-ordinating efforts.

“If [outside governments] have identified now for 25 years that the majority of the problem rests in First Nations territory, why can’t they formally understand that the majority of the answers must rest in First Nations territory as well?” he asked.