Ontario: Liberal’s Budget Fails, But Price of Cigarettes Increase by $3.75 Anyway

Update:

Queens Park. The price of cigarettes have increased twice in 2014, bringing the price of a large pack of cigarettes to $13.00. In February, the Federal Conservative party increased the price of cigarettes by $2.11 and the Privincial Liberal's announced another increase of $3.75 in the 2014 Ontario Budget. But the budget never passed, which triggered a June 12, 2014 general election.
Queens Park. The price of cigarettes have increased twice in 2014, bringing the price of a large pack of cigarettes to $13.00. In February, the Federal Conservative party increased the price of cigarettes by $2.11 and the Privincial Liberal’s announced another increase of $3.75 in the 2014 Ontario Budget. But the budget never passed, which triggered a June 12, 2014 general election.

Ontarians have been very confused since the Ontario Liberal Party introduced a budget on May 1, 2014 through Premier Kathleen Wynn.

In the news of the budget, the Liberals announced a number of items contained with the budget, including the increase in the price of cigarettes (about $3.75 on a carton of 200 cigarettes) which would be borne by smokers across the Province of Ontario.

The problem is, the budget was not passed by the Legislative Assembly prior to the dissolution of the 4oth Parliment of Ontario on May 2, 2014. Given the lack of confidence in the government, this action triggered a Provincial general election which will take place on Thursday June 12, 2014.

People are asking the question “how can the price of cigarettes be increased on May 1, 2014 then the 2014 Ontario Budget never passed”?

It was bad enough when the Federal Harper Conservative party introduced its’ federal budget in February, 2014 where it was announced that the Conservatives were increasing excise taxes on tobacco which would increase the price of a carton of 200 cigarettes by $4.00 (with the changes to the excise taxes on tabacco, Harper will pull in another $700 million a year). When the Wynne’s Provincial Liberal government  announced the cigarette tax increase, this would increase the price of a carton of 200 cigarettes by $3.75 on May 2, 2014; that would mean that the price of a carton of 200 cigarettes have increased, between the federal & provincial budgets by $7.75 in a mere three (3) months! Now a single large package of cigarettes (not a carton) costs the average Ontarian smoker about $13.00.

Most Ontarians thought that the price of cigarettes went up to $13 a package on May 2, 2014 as a  result of the Ontario 2014 budget that the Wynn Liberal government introduced on May 1, 2014. The budget never passed and a general election was called for June 12, 2014. Fact is, the Provincial government had passed a regulation (Ont. Reg. 125/14) under the Tabacco Tax Act, which introduced the price hike of cigarettes on May 2, 2014 whether or not the budget passed or not.
Most Ontarians thought that the price of cigarettes went up to $13 a package on May 2, 2014 as a result of the Ontario 2014 budget that the Wynn Liberal government introduced on May 1, 2014. The budget never passed and a general election was called for June 12, 2014. Fact is, the Provincial government had passed a regulation (Ont. Reg. 125/14) under the Tabacco Tax Act, which introduced the price hike of cigarettes on May 2, 2014 whether the budget passed or not. The announcement of the price hike was made simultaneously with the May 1/14 budget.

Naturally, people are still scratching their heads about the May 2, 2014 increase, as the cigarette price boost was announced in conjunction with the Ontario budget and yet the budget didn’t pass – so how can the price of cigarettes increase when the budget failed?

What the Wynne Liberals never announced to the general public, through a media release or otherwise, is that the boost in the price of cigarettes had nothing at all to do with the budget, a regulation was already passed before that, which affected the Tobacco Tax Act.

On April 28, 2014 the Wynn Liberals passed Ontario Regulation 125/14 made under the Tobacco Tax Act, which was filed on May 1, 2014 and became law on May 2, 2014.

It would have prevented the confusion and chaos that the public felt, given that the price hike of smokes was leaked to the media to be announced simultaneously with the Ontario 2014 budget, if the government had made it clear, that the price boost was taking place, whether the budget passed or not.

 Tobacco Tax Rates under Regulation 125/14, made under the Tobacco Tax Act

TABLE 1

 

Item

Column 1

Day

Column 2
Tax per Cigarette

Column 3

Tax per gram or part gram of tobacco product

1.

January 19, 2005

$0.11725

$0.11725

2.

February 1, 2006

$0.12350

$0.12350

3.

May 2, 2014

$0.13975

$0.13975

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