Display bans have been introduced in all Candaian provinces between 2002 and 2009, and retailers believe this has helped to fuel the illegal market.
Canada's Youth Smoking Survey, carried out every two years, shows that 13% of older teens said they were smokers compared with 11% in 2004-2005. The figure for younger children also rose slightly.
In a series of press conferences to be held in stores across the country, retailers will ask MPs to pledge to reduce contraband tobacco in their constituencies to 10% by the end of the year.
"MPs can do a lot to reduce it to 10% of the market instead of current rates of 20-50%," the Canadian Convenience Stores Association (CCSA) said.
A recent survey by the CCSA found that the illicit trade had contributed to the closure of one in 10 independently owned convenience stores in 2009.
"Local shop owners simply can't compete with these ultra-cheap smokes," said CCSA vice-president Steve Tennant.