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N.S. to hike cigarette tax by $5 per carton
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Canadian Press
Date: Tue. Mar. 16 2004 4:40 PM ET
HALIFAX Smokers in Nova Scotia will pay a total of $23 million more a year in tobacco taxes as the provincial government tries to curb tobacco use among teens while fattening its coffers.
The increase of $5 a carton -- or 62 cents a pack -- takes effect Wednesday.
Health Promotion Minister Rodney MacDonald said Tuesday the government's aim is to decrease smoking, primarily among young people, and downplayed the windfall to the treasury.
"The focus today is certainly on getting Nova Scotia to be a healthier community," he said.
"Research shows that higher cigarette prices are a major factor in preventing teens from taking up smoking. It's my intention to see more young people stop smoking."
It is the third such increase by the provincial government in three years and will bring the cost of a carton of cigarettes to about $74.45.
Both MacDonald and Finance Minister Peter Christie said they don't believe the added tax burden will reignite the black market trade in cigarettes, which overwhelmed police agencies in the early 1990s.
"You always have worries about the underground economy, but it's our belief that those concerns are outweighed by the need to reduce smoking," said Christie.
MacDonald said some of the extra tax revenue will go into more and better anti-smoking campaigns, but he would not commit to a figure.
The government has made no secret of the fact that it is struggling to balance its upcoming budget and has often blamed a steep decline in federal transfer payments for its dire financial straits.
Senior government officials have said equalization payments will be down by as much as $110 million and the overall budget shortfall could go as high as $140 million.
Christie has refused to confirm any of those figures and maintained Tuesday that he is committed to delivering a balanced budget.
Opposition finance critic Graham Steele said the tax increase is the right move for the wrong reasons.
"Any time you see the minister of finance coming to a health promotion announcement, you know there's more going on than just health promotion," he said.
"This announcement is motivated by a desire to gain more revenue."
Despite the province's budget woes, a spokesman for the Canadian Cancer Society said he's looking for more money to be pumped into stop-smoking initiatives when the spring budget is tabled, likely at the end of April.
"We are very concerned," said Steve Machat, the society's Nova Scotia spokesman. "Any tobacco tax increase has been proven to decrease consumption, but we still have questions on where the revenue will go."
When Wednesday's increase is included, Nova Scotia collects roughly $190 million a year in tobacco taxes, but only spends $1.8 million on its stop-smoking strategy.
Machat said that is not acceptable and the cancer society has stated in the past that the minimum budget for the province's tobacco strategy should be $2.8 million.
Both opposition parties said the cancer society shouldn't hold its breath waiting to see more money put into the strategy.
Liberal health critic Dave Wilson said the government is focused almost entirely on its fiscal problems and taxpayers should prepare themselves to be stung with other more varied tax increases later this year.
"The tobacco increase has the makings of cash grab," he said. "I think it's as clear as the nose on your face that the Tories have this province in a mess and we can expect more tax increases and user fees, whatever they want to call them, are going to be forthcoming."
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I applaud the budget, even though Health Care and education may stay unscathed. Sadly this cannot last and I worry to later this year where cuts will become enviable. If anything, this provides the Wildrose Alliance plenty of ammo when an election is called.

