Tobacco tax rebate to be eliminated

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Finance Minister Jerome Kennedy. — Telegram photo

Finance Minister Jerome Kennedy says the provincial government will introduce legislative amendments in the spring session of the House of Assembly to end the current Labrador border zone tax rebate on tobacco, effective July 1, 2013.

The minister says the move is part of the expenditure reduction measures in the 2013 provincial budget.

“There is no other rebate provided in any other part of the province for tobacco sales and no other province offers a similar rebate. The elimination of this program will result in savings of approximately $3.4 million annually,” Kennedy said in a news release.

The release said, effective 12:01 a.m. on March 27, tobacco purchases by retailers in the Labrador border zone are no longer eligible for the tobacco tax rebate because they have reached their annual quota.

 A reduced tax rate on tobacco products was introduced in Labrador in 1984 at the request of retailers in the area. In 1997, the Labrador Border Zone rebate was linked with the taxation levels of tobacco products in Quebec in an effort to limit the incentive for cross-border shopping in Labrador west and the southern coast areas of Labrador. A rebate has been provided to about 33 retailers in Labrador west and the south coast of Labrador.

 The province says it has made several changes to legislation with a goal of discouraging tobacco use, including banning the promotion of tobacco products, eliminating smoking in bars and restaurants, and banning smoking in areas around government buildings. It says, in addition to realizing savings, removing this rebate is consistent with those efforts.

 “We are committed to the promotion of health and well-being in the province and providing a tax rebate that serves as an incentive for increased tobacco sales goes against this commitment,” said Kennedy. “Since 1998, the amount of cigarettes purchased has more than doubled in the Labrador west region. With the end of the program, it is our hope that cigarette sales will also decrease.”

The province also announced a tobacco tax increase in its latest budget. Effective March 27, 2013 the tax per cigarette has increased by 1.5 cents, resulting in increased revenues of approximately $8 million

Geographic location: Labrador, Quebec, Labrador.The

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Recent comments

  • yo mama
    March 30, 2013 - 05:46

    Excellent strategy, they should do the same with any unhealthy habit, alcohol, dirty ass fast food...etc.

  • Enforce the Legislation
    March 29, 2013 - 20:29

    Quote: "The province says it has made several changes to legislation............and banning smoking in areas around government buildings". Mr. Kennedy, when did this come into effect? Last week I was conducting business at one of your crown corporations and 6 people where just outside the door having a smoke. You could smell the smoke in the conference room. If you are committed to the promotion of health, please sir, enforce your legislation.

    March 28, 2013 - 19:51

    Oh Please, give me a break!! This Government will rake in app. 8 extra million on the 30 cent cigarette pack increase, and the Minister wants us to belive that by taking off the tax rebate in Labrador, he hopes it will decrease the amount of tobacco sales, for the health of the smokers!! He knows there will be millions made in tobacco sales because of this action and to say otherwise is laughable at best. Does he think the electorate are absolutely stunned as a box of rocks??? Personally , I think it's about time ,but please be honest. It's for increased revenue , nothing more nothing less. Lab City residents have had this perk for to long. Most smokers in Lab City can afford to pay the extra bucks for a pack of fags and pay they will. This Government caved into the shop owners yrs back because they said they were losing revnue because of cross the border shopping. That being said , there will be increased smuggling from tobacco from Fermont to Lab City, but let the RNC and RCMP handle that. But again , to say the rebate is to hopefully make people reconsider smoking because of the price increase, is just another bold faced LIE that this last term Government is trying in vain, to pursuade us to believe. Pathetic Mr. Kennedy , just pathetic.