On the flip side, the president of the Ontario Convenience Stores Association applauds the measure and warns about a "crisis" for small business, hit hard by the native trade.

The move by the province, which has Ministry of Revenue enforcement officials targeting smoke shop customers with the help of OPP, is the boldest jab at the local industry in recent memory.

Officials started pulling people over last week and, according to smoke shop operators, are confiscating their newly purchased cigarettes and giving them a warning. They are also being provided with a copy of part of the Tobacco Tax Act.

Natives with a status card are allowed to buy the cigarettes without paying sales tax, but non-natives are not.

"I do support that kind of initiative," said Haldimand MPP Toby Barrett. "It is a start, but it's not going to go very far because ... people are going to very quickly figure out, 'Well, let's throw all the cartons in the trunk, because they're probably not going to pry open the trunk."

At 6 Nay Tobacco, employee James Logan said he's seen "no change" in business.

At the shop, located near Argyle Street on Highway 6, the equivalent of a carton (200 cigarettes) sells anywhere from $23 for a plastic bag to $32 for a carton with duty paid.

Logan, who does not ask for a status card when selling cigarettes, said if the government feels the need to hassle its own people over taxes, that's up to them.

"We're not their tax collectors."

Stephen (Boots) Powless, operator of Pine Ridge Tobacco, said he has been advising his clients they have rights. OPP and revenuers have no right to unlawfully search them, he said.

"I would say these people's constitutional rights are being denied," he said.

Powless said clients who come to the shops are not "notorious individuals," but people who are overtaxed and going there for relief.

The land on Highway 6 is in dispute and is not officially recognized as Six Nations territory. Those who run the shops are quick to point out there is still a debate about who owns the land.

Others say the tobacco trade is having a positive effect on the community.

"I think they should leave us alone," said customer Wayne Watson, 52, an Oneida from London. "It's the best economic renewal this community's had in (a) lifetime."

But those benefits may be coming at a high price to retailers bound by Canadian tax and tobacco retailing laws.

Dave Bryans, president of the Ontario Convenience Stores Association, said statistics show that last year nearly 50 per cent of all cigarettes in Ontario were contraband.

He said at an independent family-run store in Hamilton, for example, cigarette sales would account for 50 to 75 per cent of their daily revenue and sales.

"Your regular customers who buy an addictive product called tobacco don't come into your stores as often and therefore we don't sell chips, pop, lottery," Bryans said.

"The whole pattern of business (is altered)."

He said last year 865 convenience stores closed in the province and the association predicts that in time, 30 per cent of stores will be gone and those will be the smallest family-run shops.

Dalwinder Singh, owner of Rockland Variety on Rymal Road East, said lots of variety stores have closed because of native cigarette sales. He thinks if the enforcement is done properly, it will help curb the problem.

"Here, every law and enforcement works on us," he said. "After 10 kilometres from here, there's no laws, there's no enforcement, there's no checking."

For Shams Zaman, owner of Petro V Plus on Centennial Parkway North, the crackdown is welcome news.

"It's the best idea for me, of course, and ... (it's) good for the government too, they can get the taxes ... they don't get if people are buying cigarettes from there," he said.

The Ministry of Revenue would not provide details about the crackdown. A spokesperson said it is ministry policy not to talk about current and future investigations.

An OPP spokesperson said she did not know how long the initiative would last, but said police will be there to help revenue officials as long as they're required.

dbrown@thespec.com