How tackling financial crime could reduce youth tobacco access in Canada
The pledge to fund and create a new financial crimes agency to fight illicit activities that fuel organized crime in Canada and around the globe was big news out of April's spring economic update.
Tasked with intensifying scrutiny of money laundering, fraud, and complex financial schemes—while accelerating the seizure of illegal proceeds—this agency has the potential to deliver meaningful results across multiple fronts.
One unexpected but powerful benefit? It could significantly curb youth access to tobacco and nicotine products.
Current retail regulations, while well-intentioned, have created unintended consequences that fuel the very problem the federal government is attempting to solve. When responsible retailers face excessive restrictions or outright bans on age-restricted products like tobacco and nicotine pouches, demand doesn’t disappear—it shifts underground. In the unregulated depths of the black market, counterfeit, contraband, and often unsafe products proliferate without any age checks, quality controls, or oversight.
The scale of the illicit tobacco trade in Canada is staggering.
A recent study by KPMG found that this illegal activity may represent as much as 38 per cent of the market, translating to $2.1-billion in the hands of organized criminals, who use these proceeds to fund the production of drugs, traffic guns, and other illegal activity. That translates into more gangs, guns, and grief on Canadian streets.
Youth access tells the real story. Legitimate convenience stores, staffed by trained employees who rigorously enforce age-gating, consistently demonstrate the highest compliance rates in the nation. Health Canada data shows that convenience and gas retailers are among the least likely sources for youth obtaining nicotine products—reinforced by a recent study that revealed a 99 per cent compliance rate. In contrast, when restrictions tightened on legal nicotine pouches, an online black market exploded almost overnight, complete with anonymous sales and zero age verification.
Yet, policy responses always target law-abiding parties rather than the unregulated fringe because that’s the easiest path of least resistance, not to mention terrible public policy.
Canada’s 21,000 convenience stores serving 5,000 communities take our responsibility seriously, and we play an essential role in providing regulated, reduced-risk alternatives to adult smokers.
Ignoring the massive scale of Canada's illicit market does nothing to advance public health goals—in fact, it undermines them. The result: strict retail bans will continue to fail, shifting youth access to social sources, online sales, and unregulated sellers rather than well-trained convenience store staff.
There is an urgent need to act now. Youth continue to access unregulated products through illicit channels and the federal government cannot tackle this alone. Success demands close collaboration between federal authorities, provincial governments, and law enforcement—working together on policing, intelligence sharing, and co-ordinated regulatory approaches that target the criminal networks rather than burdening compliant retailers.
Protecting youth from tobacco requires confronting reality, not an erroneous ideology.
Let’s direct enforcement where it matters most—against the criminals profiting from the black market, not the corner stores who are already part of the solution and strengthen Canadian communities every day.
Anne Kothawala is president and CEO of the Convenience Industry Council of Canada.
The Hill Times