Hon. Tommy Banks:

Honourable senators, the first duty of a state is to protect its citizens. That is why there are states. States resulted from groups of people coming together to protect themselves from harm. Pretty much included in that duty is the duty to uphold the law.

Senator Segal has called to our attention a problem that he described as now worse than ever, and it has to do with the law. I was speaking briefly with Senator Brazeau earlier in the day and I mentioned the mortal fact that successive governments — this government and previous governments — have had their head in the sand in this regard. He said that was right, but that sometimes, though, one must draw a line in the sand. It is in that sense that Senator Segal called our attention to this problem.

It is the problem of lawlessness, and that is the principle that is at the root of the problem that occurs along our central border with the United States, particularly where that border is intersected by territories of First Nations. It has to do with, but is not limited to, the business of contraband tobacco. Nor is it limited, as I have sadly found, to Central Canada, to Ontario and Quebec.

Last month, the RCMP made a seizure of contraband cigarettes in the Montana First Nation in Alberta of 14 million illegal cigarettes — 75,000 cartons — that came from illegal manufacturers, through illegal importing, into Canada via Central Canada, costing millions of dollars in lost revenue to Alberta and to Canada. Sadly, this seems to have involved some of the leadership of that First Nation.

Senator Segal, in his excellent speech on November 18 on this point, provided us with numbers and figures that describe the extent of this lawlessness. I hope that honourable senators have read, will read or do recall his speech. Those numbers and figures are shocking. The circumstances and actions described by Senator Segal in his speech are shocking. They indicate a flouting of Canada's laws on a level and to an extent that is shocking.

Senator Segal talked about the extent of the cost to Canada of this flagrant illegality in terms of dollars. The amounts are in the billions — not millions, but billions — but also in terms of the principles involved and about the flagrancy of illegal activity by everyone involved: by criminal gangs; by ordinary Canadians out to make a fast, easy and relatively safe buck because no one prosecutes them; and by members of First Nations. I should not say that no one prosecutes them because the efforts of our law enforcement agencies are Herculean in that respect but, as usual, they do not have the resources or the political will behind them to deal properly with the question.

The geographical situation of the Akwesasne First Nation, which is where many of these cigarettes come from — that First Nation is a proud and ancient member of the Seven Nations confederacy in Canada. It has a population of about 24,000 people. The geographical and political situation of the Akwesasne lands is unique. These lands lie mostly in the United States, in New York State, and they include some islands on the St. Lawrence River that are Canadian.

The Akwesasne lands of the United States are not federal lands because the State of New York never ceded those lands to the union. The Akwesasne hold those lands by virtue of a grant from the State of New York. The lands are New York State lands.

As Senator Segal pointed out to us, it is this unique geographical and political situation that in many respects is pivotal to the illegal activity that goes on in and around this area. It is illegal activity that is not circumscribed merely by the revenue losses or by the increased danger of cigarette smoking because kids can buy cigarettes at $15 a carton rather than $70 a carton. It includes other, and in some ways more serious, criminal activity. It funds the smuggling of guns, drugs and people, and it is the view of law enforcement officers on both sides of the border that it now funds terrorism. With billions of dollars, one can provide a lot of funding.

The Senate has long been a place where Aboriginal rights are defended and protected. The Senate has often had salutary effects on public policy in those regards, and I hope that will never change.

In the case of the Akwesasne, by way of example, those rights include the right to travel freely between Canada and the United States across a border that is within the Akwesasne lands. That right was not created by, but is recognized by, the Jay Treaty, as it is called. It is actually the Treaty of London of 1749. Jay was the name of the American negotiator on the treaty, which provided, as it was put, that Native American Indians born in Canada have the right to travel freely across the United States border for all intents and purposes. That treaty, by the way — the formal title of which is the Treaty of Amity, Commerce and Navigation — managed to force all hostilities between His Britannic Majesty and the United States until 1812.

That treaty recognized that those American Indians, as they were called, could travel freely across that international border. The United States has codified this obligation in the Immigration and Nationality Act, which provides that Native Indians born in Canada are entitled to enter into the United States for the purpose of employment, study, retirement, investing and immigration. However, nowhere in the treaty or anywhere else does it say that anyone is entitled to conduct criminal activity in either the United States or Canada. Nowhere in the treaty does it say that there is a licence to break the laws of either country. Nowhere does it permit tobacco smuggling, drug smuggling and people smuggling by Aboriginal people or by anyone else, by criminal gangs or by ordinary Canadians. These things are all taking place. The difficulties faced by both Canada and the United States in enforcing their respective laws are exacerbated by that unique geographical and political circumstance of the area's First Nations, including the Akwesasne.

There are perfectly good and legitimate businesses owned and operated by Aboriginal people in the Akwesasne Nation, for example. One is called Grand River Enterprises. It is a large and respected corporation.

The Mackenzie Institute reports they are a major employer in the Niagara Peninsula. They co-operate fully with all Canadian and United States laws. They are a large and well-established corporation. They not only provide quality cigarettes for First Nations communities, which they are perfectly entitled to do legally, but they also have contracts to supply our Armed Forces with cigarettes and some of the Armed Forces of our allies with cigarettes. The corporation is a major First Nation business success story, but the contraband industry is now victimizing even them. Their products are now among those that are being counterfeited or mimicked by unlicensed producers and hawked in a variety of places as illegal cigarettes. A legitimate Aboriginal-owned business is being victimized by the illegitimate manufacturing, distribution and sale of illegal tobacco products, and the proceeds are in the billions.

That report, the Mackenzie Institute report, indicates that a variety of actors appear to be taking profit wherever they can out of the situation, such as individuals who live in that area working to benefit themselves and organized criminal societies. Worse yet, there is a clear linkage between criminality and terrorism groups. They are close working cousins and they scratch each other's backs.

In the United States, there have been three cases so far where individuals associated with Hezbollah or al Qaeda have been moving contraband cigarettes and enjoying the proceeds of this criminal activity, which is taking place under our noses. Behind this, the Mackenzie Institute report points out, is an old truth, that so long as someone has a demand for something, someone will supply it at a reasonable cost. If the legal product is too expensive or too highly regulated, contraband product inevitably will appear.

My information is that there are at least ten large cigarette manufacturing facilities on the New York State part of the Akwesasne lands. At least one of them is legal, licensed and observing the law, but the others are not. The cigarettes they make are illegal; the transport of them from the First Nations lands into Canada proper is illegal; the huge profits that result are illegal; and the other criminal activities that are funded by those proceeds are illegal.

Despite increased budgets, attention, surveillance and larger and more frequent interdictions and seizures, the problem, the lawlessness, seems always to increase. We seem unable or unwilling to tackle the problem head-on because, as Senator Brazeau points out, no one wants another Oka. As Senator Brazeau also points out, we have to draw a line in the sand some place, and the duty of the state is to enforce the law, unless it cannot be tackled head-on.

Maybe the social factors, the political difficulties, the constitutional impediments, the inconvenience and the danger are too great. Maybe we have to accept that criminals will operate there, as they always have, and there is nothing that anyone can or will do about it. If that is so, it is a pretty sad state of affairs.

Let us characterize, for the sake of the argument, and perhaps odious comparison, the Akwesasne lands as a state within a state along the lines of Andorra, San Marino or Monaco. It is preposterous to think that unbridled lawlessness on the part of Andorrans would be countenanced by France and Spain. To think that Italian authorities would look the other way if San Marinans were manufacturing and smuggling contraband into Italy is absurd. The suggestion that France would have her head in the sand in the face of flagrant violations of French law by Monégasques is silly. Everyone knows that that would not be allowed to happen.

It happens only in our country. No self-respecting nation can possibly do such a thing. No self-respecting nation whose first responsibility is to the safety and security of its citizens can stand idly by, watching while criminals operate openly and with impunity, driving trucks during the winter off the ice and up onto the streets of Cornwall with loads of cigarettes. Everyone knows they are doing it; everyone is selling the cigarettes and everyone is smoking them. In those relatively few instances when they are stopped and charged, they receive insignificant penalties, which they regard as a minor inconvenience and a cost of doing business; miniscule in comparison to the proceeds they are receiving.

That is what we do. We sit idly by watching this activity because we do not have the political will to do anything about it. We have the means; we have the people; we have the intelligence; and we have the information. We decide not to do it, and it is not that the enforcers of our laws are not working assiduously to maintain the right. They are, but, and here we go again, the resources with which they are supplied — the money, the people, the time and the political will — are insufficient to the task by a significant factor.

The cost to us of this rampant criminal activity is in the billions. To make more effective inroads against it would cost in the hundreds of millions. The benefits are exponential if it comes down to simple arithmetic, but, of course, it does not come down to simple arithmetic. It is more difficult, complicated and exasperating than that.

Suggestions have been made from many quarters as to how to deal with this problem. Some of them may be right. Many of them are certainly wrong. I would not presume to have an opinion on what courses to follow.

However, I know how to arrive at the recommendations that would have facts, truth, common sense and consideration behind them. It is to follow Senator Segal's proposal, which is exactly the right one, to move forward on this issue. He says, rightly, that the Senate is uniquely qualified and mandated to address that next step. He proposes that we should do so by means of a formal Senate inquiry.

It should be dealt with by a special committee of the Senate. The matters that need to be addressed in this dilemma have some aspects that fall into the bailiwick of national security and defence; others that are clearly matters of national finance; others that have to do with legal and constitutional affairs; and still more that concern foreign affairs and international trade. This matter concerns all of the above.

The best way to address the problem is by the creation of a special committee of the Senate, along the lines of the Special Senate Committee on Illegal Drugs that was chaired so effectively and efficiently by Senator Nolin. It should be a special committee with a clearly defined and circumscribed mandate, and a fixed time line in which to recommend to Parliament the next step and direction in public policy. That committee is precisely the kind of thing that the other place will not do. It is precisely the kind of thing that the Senate does best.

Something needs to be done urgently.

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