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A question of tax

Paul Bickford
Northern News Services

Hay River Reserve (Feb 2o/06) - There doesn't appear to be much support for - or even interest in - the idea of taxing tobacco sales on the Hay River Reserve.



Alfred Moses of Health and Social Services shows models of healthy and smoke-damaged lungs at a Feb. 13 public meeting.- Paul Bickford/NNSL photo

Here are some of the numbers on smoking on the Hay River Reserve, plus the potential income for K'atlodeeche First Nation from a tax on tobacco products.

  • 298 - reserve population
  • 127 - estimated number of smokers over 15 years of age
  • $7.50 - price of a pack of cigarettes (compared to $12.10 in Hay River)
  • $4.00 - price of a tin of chewing tobacco (compared to $7.29 in Hay River)
  • $503,624 - total sales of tobacco products on the reserve
  • $35,253 - potential income from a seven per cent tax, which would raise the cost of a pack of cigarettes by about 50 cents
  • $251,812 - potential income from a 50 per cent tax, which would raise the price of a pack of cigarettes to just over $11


  • Only six people showed up for a Feb. 13 public meeting to hear Alfred Moses pitch the idea as a way to reduce smoking on the reserve, where there is no GST or territorial tax on tobacco.

    On the reserve, a pack of cigarettes costs only $7.50, compared to $12.10 in Hay River.

    "It's too cheap. It's like giving cigarettes away," said Moses, the First Nations and Inuit tobacco co-ordinator with the Department of Health and Social Services.

    Despite Moses' arguments, there was a distinct lack of enthusiasm for a tax.

    Clara Sabourin believes people will still smoke, no matter what the price. "I don't think the cost will stop anyone from getting it."

    Robert Lamalice, a KFN councillor, said smoking is a personal choice for people. "I can't tell them to quit. It's their personal choice."

    Lamalice expects someone will bring up the tax idea at a future band meeting, but he expects many people will be against it.

    Arthur Martel noted tobacco's significance in traditional ceremonies, such as feeding the fire.

    "This is a form of religion for me," he said, adding people should be educated to respect it.

    Martel believes taxing tobacco would mean benefitting from other people's misfortune.

    "We don't need to generate money out of a bad product," he said.

    But Moses said smoking costs the territorial government $10 million a year, mainly because of increased health costs.

    The low-priced cigarettes are a big draw, explaining about 60-65 per cent of customers live off reserve, said Ehdah Cho store manager Warren Nekurak.

    "That's the number-one reason people come to the store," he says, explaining any person with treaty status can buy the cigarettes without paying tax.

    But while the majority of the store's customers are aboriginal, don't think just anyone can belly up to the counter to purchase a box of smokes for a cheap price.

    The reserve store buys its supplies from the same place as tobacco vendors in Hay River. Taxes are paid by the vendor at that point, who must then recoup those costs from the customer.

    In the case of the Hay River Reserve store, manager Nekurak said everyone must sign for their purchases, showing a band number or treaty card as their identification.

    The store is then refunded what it spent on taxes based on the sales matching treaty aboriginals' purchases, the manager said.

    "It's very important we get our customers to sign for it," Nekurak said of the process.

    No taxes on the reserve is an inherent right of the people, added Nekurak, a band employee, but not a KFN member. "I think it's something they should safeguard."

    Moses said a tax could be collected by the federal or territorial governments and submitted to the band at the end of the year, or it could be directly imposed by the KFN.

    The band-owned store on the reserve sells more than $500,000 worth of tobacco products a year.