At a news conference in Ottawa with the Royal Canadian Mounted Police, Canadian Public Safety Minister Stockwell Day said intelligence indicates almost all of the discounted and untaxed cigarettes on the black market originate on Indian reservations, Sun Media reported.
A majority of the total comes from the Akwesasne reservation, which straddles southeastern Ontario and upstate New York, the report said.
Day downplayed the excise taxes being lost and focused on proceeds of sales.
"You are actually in effect supporting a host of criminal activities that literally lead to destructive activities in your own communities -- destruction and even death depending on the level of criminal activity you are supporting," Day said.
He said an undisclosed number of new RCMP hires would be made to specifically target the trade.
A carton of regular, taxed cigarettes costs about $70, while contraband cartons sell for as little as $6, the report said.