Provincial jurisdiction in question over cigarette seizure

Legal action will be taken by the Montana First Nation and Rainbow Tobacco Company to have cigarettes confiscated by the provincial government returned.
In what was dubbed “a record seizure of contraband,” the RCMP and the Alberta Gaming and Liquor Commission removed 14 million cigarettes from a Quonset in Hobbema on Jan. 5. The cigarettes were not marked for sale in Alberta. Provincial taxes are approximately $3 million.

Montana First Nation Chief Carolyn Buffalo said the provincial government had no right to seize the cigarettes, which were located on the reserve, which falls under federal jurisdiction, and the cigarettes bore the mark necessary for federal sale.

“Wherever cigarettes are sold in Alberta they do have to be marked for legal sale in Alberta and there are legal tobacco sales that take place everywhere in Alberta including on First Nations,” said Lynn Hutchings-Mah, spokesperson for the Alberta Gaming and Liquor Commission.

The AGLC is storing the cigarettes in a secured undisclosed facility, said Hutchings-Mah, who would not speculate on how long the investigation would take nor what the details of the investigation were. Charges had not yet been laid.

Counsel for Montana First Nation, Buffalo and Rainbow Tobacco Company, gave the AGLC until Jan. 27 to determine if AGLC would return the tobacco and acknowledge the province’s lack of jurisdiction.

 “They didn’t respond so a legal claim has been put in,” said Rob Dickson, chief executive officer for Rainbow Tobacco Company, which operates on the Kahnawake First Nation in Quebec.

The cigarettes came to the attention of the AGLC when Buffalo phoned the RCMP to report a break-in at a Quonset in Hobbema. The cigarettes had been in storage there since mid-December. The RCMP contacted the AGLC and Buffalo was served with a search warrant.
Buffalo said money had not exchanged hands between Montana First Nation and Rainbow Tobacco.  Dickson flew from Quebec to Alberta to claim his cigarettes and get them released. He was unsuccessful.

Rainbow Tobacco supplies First Nations in Quebec and Ontario with tobacco product. Dickson is required to pay federal tax but doesn’t pay provincial tax in either of those provinces. Dickson’s federal manufacturing license was renewed on Jan. 11, a full six days after the seizure of the cigarettes in Alberta.

Adding to Buffalo’s problems was the immediate action taken by her band council to suspend both her and councilor Len Standing on the Road for their involvement with obtaining the cigarettes. Buffalo fought the suspension, saying she had not contravened the band’s Election Act. She continued serving as chief although carrying out her duties outside her office. She returned to her office on Jan. 26.

“Some people (on the Montana First Nation) think it’s an embarrassment,” said Buffalo. “But we’ve received so many calls of support. Everybody says the province does not have jurisdiction.”

However, in the first week of February, in separate incidences, cigarettes shipped by Rainbow Tobacco Company to Squamish, B.C., Elders and a woman with the Federation of Saskatchewan Indian Nations were seized by those provincial governments. Dickson is frustrated with this latest development but said he would continue to focus his efforts in the legal action being taken in Alberta.

Legal counsel for the band and Rainbow Tobacco Chady Moustarah expects the province will move ahead on Sect. 4(1) of the provincial Tobacco Tax Act which states, in part, “. . . no person shall, in Alberta, purchase, possess, store, sell or offer for sale tobacco products that are not marked for tax-paid sale in Alberta. . . .”

 “The constitutional argument is that the Provincial Tobacco Tax Act does not apply to First Nations lands because they are federal lands,” said Moustarah.

He cited Section 35 of the Constitution Act in conjuction with sections 87 and 88 of the Indian Act.

“It’s quite clear this is federal lands. Our view that the provincial government doesn’t have the jurisdiction to enforce the Provincial Tobacco Tax Act.”

Dickson said he began talks with a representative from the Montana First Nation six months ago, pursuing an economic venture that would benefit both First Nations. He would not go into further detail over the business transaction.

Buffalo said council did not discuss purchasing tobacco and she personally was not involved in discussions with Dickson.

But there are advantages to the Montana First Nation selling the product to other reserves.

“The vast majority of my people live in poverty. We want jobs,” Buffalo said. The cigarette distribution could employ up to 80.