What Happens If You Possess or Sell Unstamped Tobacco?

Penalties for contraband tobacco come from two layers of law. The federal Excise Act, 2001 sets prison terms of up to five years and fines tied to the duty on the tobacco involved. Each province adds its own tobacco tax act, with fines that often scale by the number of cigarettes. This page reports what the federal Act, Ontario, British Columbia and the Canada Border Services Agency (CBSA) say on their own pages. It is general information and not legal advice.

The federal rule behind most charges

Section 32(1) of the Excise Act, 2001 says no person may sell, offer for sale or possess a tobacco product unless it is stamped. Exceptions cover licensed manufacturers and warehouses, certain exports and an individual who imported the product for personal use within prescribed limits. The text we read sets no quantity below which the rule stops applying, apart from those exceptions.

Section 216 sets the punishment for breaching section 32:

Route	Prison	Fine
Conviction on indictment	Up to five years	Not less than a minimum worked out from the duty on the quantity
Summary conviction	Up to 18 months	Same minimum, capped at the lesser of $500,000 and the formula maximum

The minimum fine is two times the duty on the cigarettes, tobacco sticks or manufactured tobacco involved, or five times for cigars, with flat floors of $1,000 on indictment and $500 on summary conviction. The maximum multiples are three and ten.

Raw leaf, stamps and unlicensed making

Selling, buying or possessing raw leaf tobacco that is not packaged and stamped breaches section 30. Section 215 sets the same prison terms, five years on indictment and 18 months on summary conviction, with fines tied to the weight of raw leaf involved.

Section 214 covers more serious supply-side conduct, including making tobacco without a licence and the stamp offences in sections 25.2 to 25.4, such as making or selling something meant to pass for an excise stamp. On indictment the fine runs from $50,000 to $1,000,000, up to five years in prison, or both. On summary conviction it is $10,000 to $500,000, up to 18 months, or both.

What officers can seize

Under section 260 an officer may seize anything by means of or in relation to which the officer reasonably believes the Act has been contravened. Section 264 says seized tobacco products must not be returned to the person they were taken from or anyone else unless they were seized in error. Section 267 says anything used in or in relation to a contravention is forfeit to the Crown from the time of the contravention. The Minister may return a seized thing on receipt of security under section 265, and the text we read does not say whether that applies to tobacco.

At the border

The CBSA can seize goods that are not declared or are falsely declared. For tobacco, its guide says products that are not properly declared are seized permanently. Other seized goods may carry a penalty of 25% to 70% of their value to get them back. An appeal must be made within 90 days of the seizure.

Ontario

Ontario lists penalties by quantity for unmarked cigarettes:

Situation	Fine	Jail
Possession, not for resale, 200 or fewer	Up to three or four times the tax plus $200	Up to two years on a repeat conviction
201 to 1,000	Same multiple plus $500	Same
1,001 to 10,000	Same multiple plus $1,000	Same
More than 10,000	Same multiple plus $1,000 to $50,000	Up to two years
Possession for resale	Up to five times the tax plus $500 to $75,000	Up to two years
100,000 or more, for resale, at a place used to buy, sell or store tobacco	At least five times the tax plus $10,000 to $100,000	Up to two years, and the name is released

The page does not say when three times applies and when four times applies. Ontario’s tobacco tax page adds that consequences can include jail, seizure of products, vehicle impoundment and a sales ban of up to 180 days for retail dealers.

British Columbia

B.C. lists these penalties for possessing or dealing in contraband tobacco: suspension or cancellation of any tobacco tax permit, forfeiture of the tobacco, fines of three times the tobacco tax up to $50,000, and up to two years in prison. The province runs a retail inspection program and an investigations unit that works with police, the CRA and the CBSA.

What we could not confirm

• Penalty details for Quebec and the other provinces and territories. Revenu Québec’s penalties page returned an access error when we tried to open it, and we did not find readable pages for the rest.
• The per-kilogram fine amounts in section 215 for raw leaf.
• Whether the Criminal Code adds charges in tobacco cases. We did not read a Criminal Code section on tobacco.
• How often courts impose the maximums. We found no official sentencing statistics.
• Whether a particular amount applies to your situation. Penalties depend on the quantity, the charge and the province, so check the current statute or ask a lawyer.