Back in 1998, British Columbia became the first province to sue tobacco companies in an attempt to recoup some of the costs of treating smoking-related illnesses.
Every other province and territory followed suit, along with additional class-action suits filed by smokers in Quebec. All told, the claims exceeded more than $500-billion.
Now, after a quarter-century of legal manoeuvering, three tobacco giants – JTI-Macdonald Corp., Rothmans, Benson & Hedges Inc., and Imperial Tobacco Canada Ltd. – are set to settle the legal claims for a mere $32.5-billion.
The amount is paltry considering the cost of smoking-related illnesses to the public purse, and the enormous profits these companies make selling lethal (but legal) products. Smoking kills about 45,000 Canadians annually, and smoking-related illness costs the economy about $16-billion, almost half of that for direct-treatment costs.
In the decade since tobacco companies lost the first Canadian lawsuits and declared bankruptcy, they have amassed more than $12-billion in profits. It will take them about five years to pay off the balance of $20-billion or so.
In other words, Big Tobacco is coming out of this just fine, thank you very much.
The provinces and territories are doing okay, too. If the mediated settlement is accepted – decision day is Dec. 12 – they will receive $24.8-billion. Another $4.25-billion will go to Quebeckers who smoked between 1950 and 1998, while $2.5-billion will be shared among other Canadians who suffered smoking-related illnesses between 2015 and 2019. The final $1-billion will be used to create a foundation to study tobacco-related illness.
Public-health and anti-smoking groups in Canada are almost unanimous in their condemnation of the proposed settlement, and rightfully so.
Just as important as what the deal includes is what it doesn’t.
There is no apology for the deceitful marketing at the root of all of this. Tobacco companies have known since 1958 that cigarette smoking caused cancer, a fact demonstrated incontrovertibly in U.S. litigation. (The 1998 U.S. Master Agreement saw tobacco manufacturers pay at least US$206-billion over 25 years, and prompted the Canadian legal action.)
There is no money being paid back for smoking prevention or education programs. No money for smoking cessation. More than 1.2 million people have died of smoking-related illnesses since the lawsuits were filed. Yet the deal does nothing to prevent future generations from becoming addicted to tobacco (and other nicotine products). Nor does it require the end of tobacco sales, or even any further restrictions.
In other words, it’s business as usual: 4.6 million Canadians will continue to use tobacco products, while 125 Canadians will continue to die of smoking each day. Governments will continue their unhealthy dependency on tobacco taxes – about $6.5-billion in direct revenues. And tobacco companies will continue to rake in unhealthy profits, while expanding their addictive reach with other nicotine-delivery means like vapes and nicotine patches, all while claiming, semi-honestly, that their goal is to end the smoking of combustibles.
It all leaves a bad taste in the mouth – like smoking itself.
To say that the settlement – which took more than five years to negotiate – is complex, is an understatement. It weighs in at a hefty 1,426 pages.
One of the problems here is that the Companies’ Creditors Arrangement Act (the bankruptcy law in Ontario) focuses on recouping money for creditors (or, in this case, plaintiffs), and that means prioritizing keeping businesses running and generating profits.
Even odious businesses like tobacco.
It was not the role of the mediator, Warren Winkler, former chief justice of Ontario, to pay any mind to the public-health implications of the deal. That’s up to the main claimants – the provinces and territories – and they failed.
At this point, they are unlikely to walk away from the deal, or even insist that it has some sharper teeth, so the question becomes: How will the provinces and territories use the settlement money to help end the scourge of smoking?
We have no idea yet. Only one province has hinted at its plans, with Manitoba Premier Wab Kinew saying it will build a state-of-the-art cancer treatment facility.
In the meantime, we have to make do with our federal tobacco strategy.
It has a lofty goal: To make Canada “smoke-free” by 2035 – meaning that fewer than five per cent of people over the age of 18 will smoke, down from the current 11.4 per cent.
The strategy has a modest $66-million annual budget. That’s enough to pay for a pea shooter, compared to the big guns wielded by a now-free-of-litigation Big Tobacco.