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April 5, 2001
For immediate release

Province Joins Federal Government in Health Tax Increase on Tobacco

Provincial Treasury

Following the federal government announcement today to implement a series of measures concerning the taxation of cigarettes, Provincial Treasurer Patricia Mella indicated that Prince Edward Island will join Quebec, Ontario, New Brunswick and Nova Scotia to increase the health tax on tobacco.

"We have joined the federal government in increasing our health tax on tobacco out of a shared concern over the effect of smoking on the health of Canadians," stated Patricia Mella, PEI's Provincial Treasurer.

PEI reluctantly reduced tobacco taxes in 1994 along with the federal government and these four provinces in order to remove the incentive to illegally import cigarettes from the US.

"A carton of 200 cigarettes dropped in price from $50 to about $29 in the region at that time," stated Minister Mella. "Our provincial tax on a carton was lowered from $19.60 to $10.35. Since then there have been some modest increases in tax, and today our tax is $13.25," she said.

"The increase is in no way a revenue measure, and we would be most pleased if, by discouraging smoking, it generated no additional taxes," said the minister. "My colleague the Minister of Health and Social Services has stated on many occasions the need to discourage smoking, particularly of our young Islanders."

The tax measures will raise the price of a carton of cigarettes on PEI by $4 before GST. The tax on loose or fine cut tobacco and tobacco sticks will also increase to match those in effect in Nova Scotia. The increases are effective at midnight tonight.

Media Contact: Island Information Service
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