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HAY RIVER - The store on the Hay River Reserve is expecting an increase in business when territorial tobacco taxes increase on April 1.

That's because people with status Indian cards don't pay territorial taxes on the reserve and therefore won't be affected by the hikes.

Ellen Jacobs, assistant manager of Ehdah Cho Store on the Hay River Reserve, holds a pack and carton of cigarettes. - Paul Bickford/NNSL photo

"It is my opinion that more status people will make the trek across the ice road or on the reserve road in the summer to make their tobacco purchases here," said Warren Nekurak, manager of Ehdah Cho Store.

For people with status cards, a pack of cigarettes at the store costs $8.75, and a carton of eight packs costs $68.

"The status price is not going to go up at all," Nekurak said, noting Ehdah Cho Store only raises prices when manufacturers raise their prices.

For anyone without a status card, a pack of cigarettes now costs $13.05 and $103 a carton at the reserve store. As of April 1, the territorial tax increase will hike those prices up to $15.50 per pack and $114.60 per carton.

That means the status/non-status price gap for a pack of cigarettes will grow from the current $4.30 to $6.75. The gap for a carton of cigarettes will expand from $35 to $46.60.

Nekurak estimated at least 60 per cent of the store's current customers are from off the reserve, and most of them are status card holders attracted by the lower tobacco prices.

Those off-reserve customers don't just come from across the Hay river, but often from Fort Providence and Fort Resolution.

Other status card-holders visiting the Hay River area from further afield also often head to the reserve to buy tobacco products.

As of April 1, the territorial tax on tobacco will increase from $5.25 to $6.70 per pack of 25 cigarettes and from $42 to $53.60 per carton.

Nekurak does not believe a black market will develop in the NWT as a result of lower cigarette prices on the reserve, unlike in the south, where varying levels of taxation often causes smuggling between provinces. "I don't have any concerns of that happening here," he said.

Cigarette buyers at the Ehdah Cho Store are limited to 12 cartons a month. Territorial taxes are also increasing on other tobacco products, including loose tobacco and chewing tobacco.

Ehdah Cho Store requires people to show their status cards and provide their names, DIAND/band number and signatures to buy tobacco products at the lower price.

Ehdah Cho Store is owned by K'atlodeeche First Nation.