Tobacco tax rate adjustment for Labrador border zones

Finance Minister Joan Marie Aylward announced that effective today, August 2, government has adjusted the tobacco tax rebate rates in Labrador border zones in response to increased tobacco tax rates in Qu�bec.

Tobacco tax rates in these zones remain lower than rates in the remainder of the province. The Labrador border zones include Labrador West (Labrador City and Wabush) and Southern Labrador (from the Qu�bec border to the community of Red Bay).

The rebate rate on fine cut tobacco and manufactured cigarettes in designated Labrador border zones has been decreased by 2.2� per gram on fine cut tobacco and by 2.2� per manufactured cigarette. This change will mean an increase in the effective tobacco tax, of $4.40 on a carton of manufactured cigarettes and $4.40 on a 200 gram tin of fine cut tobacco.

In 1997 government introduced reduced tobacco taxes for Labrador border zones to help mitigate a serious cross-border shopping problem that existed in communities in Labrador close to the Qu�bec-Labrador border. "In order to have competitive tobacco prices with Qu�bec communities, tax rates imposed on tobacco in the Labrador border zones are linked to Qu�bec�s tobacco tax rates," said Minister Aylward. "The tobacco tax rates in these border zones change only when the Qu�bec tobacco tax is changed."

"Since February 2002, all provinces have increased their tobacco taxes in an effort to discourage tobacco consumption. The Government of Newfoundland and Labrador implemented a tobacco tax increase as part of Budget 2002, with the exception of the Labrador border zones. The recent increase in tobacco taxes in Qu�bec is now resulting in a corresponding increase in taxes for the Labrador border zones," said the minister.

Media contact: Deirdre Robinson-Greene, Communications, (709) 729-0084.

2002 08 02                               10:25 a.m.