Abstract
Manipulation of the price of tobacco products has proven to be one of the most effective tools in tobacco control. However, a strategy relying predominantly on tampering with free-market conditions by raising prices independently of the quantity available is unlikely to be successful over the long term, unless balanced by equal efforts to reduce demand. Canada has a number of unique factors which combined to create a contraband market that eventually led to political pressure for action at a national level. Although presented with a number of policy alternatives, the federal government based its strategy on reducing tobacco taxes to compete with the contraband product. Provision of an effective comprehensive national strategy to combat tobacco has yet to be realized. Econometric models predict significant changes in consumption from drastic tax reductions that effectively halved the retail price in a large part of Canada. The medical profession and public health authorities will need to combat these effects, not only by working for restoration of fiscal pressures but also for sweeping measures to restrict overall demand if increases in long term morbidity and mortality are to be prevented.