Ontario farmers may be nearing buyout, new growers leader says
Nov 2, 2007—The London, Ontario, Free Press is reporting that strong hints are growing that Ontario's beleaguered tobacco growers may be edging close to a long-awaited buyout deal with the federal government.
Tom McElhone, newly elected chairperson of the Ontario Flue-Cured Tobacco Growers' Marketing Board sounded hopeful when asked about negotiations to get growers out of the industry.
"We feel as a board that steps are being taken to get this completed . . . We have confidence in the government they will come up with what is required," he said.
The once-mighty industry has been shrinking for years. Although about 1,500 people own tobacco quota, McElhone said only about 350 farmers actually grew a crop this past season.
The crop came in at at 32 million pounds, down from 108 million pounds just five years ago. The last remaining tobacco exchange in Delhi has chopped its payroll in half and is down to 67 employees.
The board has been trying to negotiate a quota buyout that would cost the federal government about $710 million.
McElhone said growers are becoming more desperate and depressed and he said the federal government now appears to appreciate their plight.
"The awareness of the problem is known. The main thing now is the time-frame, the urgency," he said.
McElhone's comments come after published reports that bureaucrats had warned federal Finance Minister Jim Flaherty that illegal, native-produced cigarettes were draining the government of substantial tax revenue.
In the memo to Flaherty, officials said the money spent on illegal cigarettes was profiting a cross-border network of organized criminals using native land and operatives.
Figures in the government's public accounts indicate that federal tobacco revenues dropped to $1.6 billion in 2006-07 from $2.7 billion two years earlier. McElhone said tobacco industry estimates peg the tax loss at $2.5 billion.
"Everybody should be upset that there is so much contraband tobacco," he said.
But McElhone said he is confident the federal government will move to crack down on the illegal tobacco sales.
"I'm sure the government is going to act on it . . . Flaherty is a gentleman that will see fit to do what he can."
McElhone said illegal tobacco sales are only part of the problem for tobacco growers. He said domestic cigarette manufacturers are bypassing Canadian tobacco and importing more cheap tobacco from foreign producers.
McElhone, a third-generation tobacco farmer who lives north of Delhi, was elected at a board meeting last week in a narrow upset victory over incumbent Fred Neukamm.
Nov 2, 2007—The London, Ontario, Free Press is reporting that strong hints are growing that Ontario's beleaguered tobacco growers may be edging close to a long-awaited buyout deal with the federal government.
Tom McElhone, newly elected chairperson of the Ontario Flue-Cured Tobacco Growers' Marketing Board sounded hopeful when asked about negotiations to get growers out of the industry.
"We feel as a board that steps are being taken to get this completed . . . We have confidence in the government they will come up with what is required," he said.
The once-mighty industry has been shrinking for years. Although about 1,500 people own tobacco quota, McElhone said only about 350 farmers actually grew a crop this past season.
The crop came in at at 32 million pounds, down from 108 million pounds just five years ago. The last remaining tobacco exchange in Delhi has chopped its payroll in half and is down to 67 employees.
The board has been trying to negotiate a quota buyout that would cost the federal government about $710 million.
McElhone said growers are becoming more desperate and depressed and he said the federal government now appears to appreciate their plight.
"The awareness of the problem is known. The main thing now is the time-frame, the urgency," he said.
McElhone's comments come after published reports that bureaucrats had warned federal Finance Minister Jim Flaherty that illegal, native-produced cigarettes were draining the government of substantial tax revenue.
In the memo to Flaherty, officials said the money spent on illegal cigarettes was profiting a cross-border network of organized criminals using native land and operatives.
Figures in the government's public accounts indicate that federal tobacco revenues dropped to $1.6 billion in 2006-07 from $2.7 billion two years earlier. McElhone said tobacco industry estimates peg the tax loss at $2.5 billion.
"Everybody should be upset that there is so much contraband tobacco," he said.
But McElhone said he is confident the federal government will move to crack down on the illegal tobacco sales.
"I'm sure the government is going to act on it . . . Flaherty is a gentleman that will see fit to do what he can."
McElhone said illegal tobacco sales are only part of the problem for tobacco growers. He said domestic cigarette manufacturers are bypassing Canadian tobacco and importing more cheap tobacco from foreign producers.
McElhone, a third-generation tobacco farmer who lives north of Delhi, was elected at a board meeting last week in a narrow upset victory over incumbent Fred Neukamm.
