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Canada report

Tobacco company accused of selling to smugglers

© St. Petersburg Times
published March 2, 2003

A major Canadian tobacco company and its executives are accused of fraud and conspiracy for allegedly selling cigarettes to smugglers in the 1990s.

The Mounties announced the criminal action against JTI-Macdonald Corp., eight of its officers and three associated companies in the United States.

The smuggling cost Canadian governments $1.2-billion in lost tax revenue, police estimated.

They said cigarettes and tobacco produced in Montreal and Puerto Rico were exported legally to the United States. Then the accused knowingly sold the goods to smugglers who moved them illegally into Canada, mainly through the Cornwall area in eastern Ontario near the borders with Quebec and New York, police said.

The alleged offenses occurred at a time when the Canadian government and some provinces had steeply increased tobacco taxes, in part to discourage consumption.

A black market in contraband cigarettes developed because of lower taxes in the United States, and led to Canada scaling back duties to remove the incentive for the illegal trade.

JT International, a division of Japan Tobacco Inc., has denied that it or its executives had condoned smuggling or other illegal activity.

Helicopter crash forces retreat

The crash of another aging Sea King helicopter has caused a warship heading for the Persian Gulf to return home.

The chopper crashed on the deck of HMCS Iroquois, injuring two seamen and forcing an embarrassing retreat to Halifax harbor. Repairs are expected to take several days.

The crash came three days after the Iroquois left to be the flagship of a naval task force checking for terrorists and enforcing sanctions against Iraq.

In brief

Carolyn Parrish, a Liberal politician from Toronto, has apologized in the Commons for off-handedly calling Americans "bastards" in reference to Iraq. "These are difficult and frustrating times for everyone," she said. "I share a fear of imminent war experienced by many Canadians." A TV microphone picked up the antiwar activist's comments after she walked away from reporters.

Quebec Premier Bernard Landry says he's more concerned with getting re-elected in a vote as early as this spring than with planning another independence vote. Support for sovereignty is in the mid 40s in the latest polls. "I have promised not to hold a referendum if there is the slightest risk of losing," he said.

Facts and figures

Expectations of a one-quarter percent increase in the key Bank of Canada interest rate on Tuesday pushed Canada's dollar higher Friday to 67.13 U.S. cents. The U.S. dollar returns $1.4896 Canadian, before bank exchange fees.

The key Bank of Canada interest rate remains at 2.75 percent while the prime lending rate is 4.5 percent.

Soaring gasoline and electricity prices led inflation to a decade high of 4.5 percent in January, up from 3.9 percent in December.

Canadian stock exchanges were higher Friday, with the Toronto index at 6,591 points and the Canadian Venture Exchange 1,105 points.

Lotto 6-49: (Wednesday) 1, 5, 18, 19, 24 and 28; bonus 30. (Feb. 22) 2, 6, 17, 34, 46 and 48; bonus 49.

Regional briefs

A spring election is expected in Ontario as Conservative Premier Ernie Eves shuffled duties of several members of his Cabinet. The appointment of Attorney General David Young to minister of Municipal Affairs is a bid to repair strained relations with cities and towns over funding for services.

British Columbia's recall law shouldn't be used to try to overturn lost elections, Premier Gordon Campbell says. The Liberals, under fire from labor, seniors and social activists, survived a recall campaign involving Val Roddick in Delta South but face seven more, including a new attempt to recall Campbell. Canvassers have 60 days to collect valid signatures of more than 40 percent of registered voters to overturn the results.

Daniel Harrison, 41, of Regina, is accused of possessing a missing computer hard drive filled with the personal information of hundreds of thousands of Canadian investors and business tax records. He is under arrest for possessing the property owned by his former employer, the data management company ISM Canada. Harrison told police he borrowed the hard drive to work on a personal project.

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