Black Market: Why We Need the Canadian-US Border Fence

Erica Berry

International cigarette smuggling is big business, and Canada is fighting to reclaim lost revenues and protect its borders from the black market trades. The Royal Canadian Mounted Police (RCPM), backed by business owners throughout Canada, announced plans to erect a $92 million, 700 kilometer high tech surveillance grid along the US-Canadian border.

The fence, which will run along the Quebec-Maine border to Morrisburg, Ontario, then along the St. Lawrence Seaway, across Lake Ontario, and ending just west of Toronto in Oakville, will protect the Ontario-Quebec border with New York State -- a key route for tobacco smugglers. This same route, along with many others, are also used by organized crime groups move narcotics and illegal immigrants south into the U.S.

“The concept involves employing unattended ground sensors, cameras, radar, license plate readers, both covert and overt, to detect suspicious activity in high-risk areas along the border,” Joe Oliver, RCMP’s assistant commissioner, told security industry executives attending the SecureTech conference and trade show at Ottawa’s Shaw Centre. “What we’re hoping to achieve is a reduction in cross-border criminality and enhancement of our national security.” 

Experts claim smuggling generates hundreds of millions annually in black market profits, which deducts from the bottom lines of law-abiding businesses and has sweeping negative effects on all aspects of society.

While all businesses may not be directly affected by cigarette smuggling, here are a few reasons how your business, government and consumer habits could be affected by the black market and why your bottom line may benefit from an international border fence:

  • Tax Avoidance: By dealing underground, suppliers and buyers avoid various taxes, which otherwise would go directly the government and be used to better communities and provide aid.
  • Lost Revenue: More often than not, the products offered by the black market are smuggled and stolen and then resold at a discounted price. By under dogging legitimate companies, smugglers make it almost impossible for white marketers to compete.
  • Inaccurate Census Data : Black markets are a big part of the informal economy of the world, and millions of people are employed in these markets. With all these workers overlooked, economic statistics to estimate the exact number of employed people in the country are skewed and need-based aide is going to those who are living in luxury under the radar.
  • High Price Tags: Corruption is at the foundation of the black market, which means its players are greedy and will do anything to put more money in their pockets. To boost their profit margins, black marketers will create deliberate shortages of high-demand items, raising underground prices and skyrocketing white market prices as well.

The surveillance web, formally known as the Border Integrity Technology Enhancement Project, was announced under the 2014 federal budget, but despite its dual use to combat terrorists and immigrants crossing borders using the same routes, it was framed solely as a measure to improve the RCMP’s ability to combat contraband cigarette smuggling. The fence will be completed in 2018.

Do you feel your company has been directly or indirectly affected by the black market? Share your thoughts and connect with other industry leaders on our social sites – Facebook, Twitter, Google+