(Image: Robbie Dickson, president of Rainbow Tobacco. APTN)
By Jorge Barrera
APTN National News
The federal tax agency has faced pressure from the RCMP to stop licensing Kahnawake Mohawk cigarette manufacturers, court documents show.
The documents also show that an RCMP investigator met with a Canada Revenue Agency (CRA) official weeks before the federal tax body decided to deny a 2012 federal tobacco license for Rainbow Tobacco, a cigarette maker based in Kahnawake, which sits near Montreal.
A large part of Kahnawake’s internal economy depends on the tobacco trade and the community is home to over a hundred cigarette shacks and at least a dozen cigarette manufacturers.
The court documents are part of an ongoing Federal Court case between Rainbow Tobacco and CRA over the decision to revoke the cigarette maker’s license.
Rainbow Tobacco has held a federal tobacco license since 2004. The company wants a judicial review of the CRA decision and a court hearing on the matter could be heard as early as this summer.
In a sworn affidavit, Rainbow Tobacco president Robbie Dickson accused the RCMP of pressuring the CRA into revoking his license.
“I believe the RCMP had a personal vendetta against myself and Rainbow Tobacco and finally convinced CRA to shut us down,” said Dickson, in the Oct. 12, 2012 affidavit.
While none of the documents filed in court show a direct link between RCMP pressure and the CRA’s decision, they do show the RCMP continually expressing concern over the agency’s decision to license Kahnawake cigarette manufacturers. The documents also reveal the federal police force’s interest in the Rainbow Tobacco file.
The RCMP expressed concerns in at least two letters sent in response to criminal background check requests by the CRA on the owners of Rainbow Tobacco. The checks came back clean each time.
Still, the RCMP included identical paragraphs in the letters, dated 2006 and 2008, informing the CRA that it was not in the “public interest” to license tobacco firms in Kahnawake.
“Considering the special situation that prevails in the territory of Kahnawake, we believe that the issuance of a license to manufacture on the reservation allows manufacturing operations and distribution to escape the control of your inspectors as well as our investigators,” the RCMP letters say. “Therefore we consider it not to be in the public interest to give licenses to tobacco product manufacturers in the territory of Kahnawake.”
The letters were signed by different investigators.
The RCMP also took a particular interest in Rainbow Tobacco and was in contact with CRA officials in the weeks before the agency decided to not renew the tobacco firm’s license for 2012.
In a CRA memo filed with the Federal Court, CRA official Denis Beausoleil describes a meeting with Denis De Launiere, an RCMP investigator on Oct. 18, 2011. On Dec. 15, 2011, Rainbow Tobacco received a letter from the CRA informing them that they would not get a license for 2012.
Beausoleil also informed two separate RCMP divisions on Jan. 4, 2012, that Rainbow Tobacco did not get its federal license renewed.
“Here is the RCMP, an agent of the federal government, writing various letters to the CRA, another federal branch of the government, telling it not to issue permits to anyone in Kahnawake,” said Dickson’s lawyer Lisa Hollinger. “I find it extremely discriminatory.”
The RCMP could not be reached for comment.
The CRA refused to renew Rainbow Tobacco’s license saying the company wasn’t complying with provincial legislation and because it had a “delinquent excise duty liability” of $2.2 million, according to the Dec. 15, 2011, letter from the CRA.
Rainbow Tobacco has seen its shipments and equipment seized in Ontario, Saskatchewan, Alberta and British Columbia.
The company maintains that CRA was always kept appraised of its plans to expand its cigarette distribution to First Nation reserves in western Canada and that the tax agency okayed the sale of its product in First Nations communities.
In his affidavit, Dickson said a large seizure of his product from the Montana First Nation in Alberta by provincial authorities distorted his company’s excise duty liability.
The Alberta Gaming and Liquor Commission seized 14 million Rainbow Tobacco cigarettes from the Montana First Nation in January 2011. All the cigarettes bore “Canada Duty-Paid” stamps. The cigarettes were destined for reserves in Alberta, British Columbia and Saskatchewan.
Rainbow Tobacco cigarettes were also seized by provincial authorities in Saskatchewan and British Columbia the same year.
Rainbow Tobacco is fighting the Alberta government in court.
Dickson has said the issue comes down to the right of First Nations to trade amongst themselves without provincial interference. He plans to fight the issue all the way to the Supreme Court.
Public Safety Minister Vic Toews recently announced plans for the RCMP to create a 50 officer force dedicated to combating the underground tobacco trade. Toews also said the government plans to introduce legislation to impose mandatory minimum sentences on repeat tobacco smugglers.
First Nation people introduced tobacco to Europeans and many see the trade of the plant as an inherent right.