Ontario's latest declaration of war against contraband tobacco is a combo of bluster and desperation.

This the third time in four years the governing Liberals have burbled about cracking down on illegal tobacco sales to help fight revenue shortfalls.

So far, it's been a failure with a capital F.

Despite higher tobacco taxes, tax revenue from smoking continues to tumble while unlawful cigarette sales continue to bloom, fostering criminal activity and youth smoking.

So why should we believe that Finance Minister Charles Sousa's call to arms at Monday's economic update will be any more effective than previous declarations?

According to Sousa, provincial revenues are down $509 million from budget forecasts, making it even harder to hit targets for reducing the $12.5 billion deficit.

Coincidentally, $500 million is what the Ontario auditor general calculates the province annually loses in taxes due to illegal tobacco sales.

It's also about the same amount former premier Dalton McGuinty predicted he'd add to the provincial treasury in 2015 by smashing black market tobacco.

It didn't happen. All the government has to show for its clampdown since 2011 is more inspections, higher penalties, some seizures, and a tepid $17 million or so in levied fines.

No wonder NDP finance critic Catherine Fife compares Sousa's latest sabre rattling to the recurring events of Groundhog Day. The Liberals have promised much but delivered little.

Perhaps it's time for a different approach. Perhaps it's time to listen to groups such as the Canadian Taxpayers Federation (CTF) and slash cigarettes taxes in order to entice smokers back to legal retailers instead of constantly raising taxes and driving them to illegal sources.

Despite the fact that smoking is the No. 1 cause of death and disease in Ontario, about 16 per cent of Ontarians 15 years of age and older still smoke. The Ontario government pulls in about $1.1 billion a year in taxes from them while nationwide the feds haul in about $3 billion.

But clearly millions of tax dollars are slipping through their fingers. Numbers vary, but it's estimated as much as 40 per cent of cigarettes now sold in Ontario are bought illegally. They come from smoke shacks on native reserves — where cigarettes are often unlawfully manufactured — and from so-called "buttleggers" who stealthily peddle their wares on the street or in bars.

The average retail price for a legal carton of 200 cigarettes is now about $85, which includes $27.94 in provincial tax and $21.03 in federal tax. By contrast, a carton of contraband cigarettes, which comes with no government taxes or duties, can sell for about half that price. Baggies of 200 black market cigarettes reportedly range from $8 to $15.

Is it any surprise that many smokers, who tend to have lower incomes than non-smokers, are willing to go outlaw?

Anti-smoking groups argue that steep taxes reduce cigarette consumption. But if up to 40 per cent of cigarettes are being purchased illegally, aren't high taxes also steering smokers to shady business?

What we do know is the RCMP estimates there are some 175 criminal gangs involved in the illegal trade. And it's a safe bet "buttleggers" aren't asking customers for proof-of-age before taking their money. Stamping out illegal sales would not only fight crime but could help curtail underage smoking.

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The CTF and others have pointed out increased enforcement or penalties are currently not winning the war. The only major victory came in the mid-1990s when both Ottawa and several provinces, including Ontario, dramatically cut tobacco taxes.

CTF argues research shows smoking rates didn't increase, but the bottom fell out of the illegal trade and legitimate sales soared. When taxes went up again in 2002, so did illicit sales. If the Liberals really want to crush the underground market, perhaps it's time for another change of tactics