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Rights + Justice

The Big Tobacco Lawsuit that Fell Off the Public Radar

Negotiations between the industry and the provinces could lead to a $500 billion payout. But they’re completely confidential.

Michelle Gamage 8 Jun 2023The Tyee

Michelle Gamage is The Tyee’s health reporter. This reporting beat is made possible by the Local Journalism Initiative.

Did you know that B.C. is participating in negotiations with Big Tobacco that could result in tobacco companies paying out $500 billion?

The matter has been completely hush-hush since March 2019, when tobacco companies applied for creditor protection under the Companies’ Creditors Arrangement Act.

This means the government is unable to say anything about what’s going on, the Ministry of Attorney General told The Tyee.

That’s concerning to Canadian anti-smoking groups, who used last week’s World No Tobacco Day to raise awareness about closed-door discussions between the government and industry.

In an open letter to provincial premiers, the Canadian Cancer Society, the Heart and Stroke Foundation of Canada and the Canadian Lung Association called on politicians to include measures that end the promotion of tobacco and reduce tobacco use as part of the settlement.

“What provinces should be doing is bringing health organizations together and asking them, consulting with them, about what health measures they’d want to see in there,” says Rob Cunningham, a lawyer and senior policy analyst with the Canadian Cancer Society. “Even if the negotiations are confidential they should be allowed to say what their priorities are.”

In a similar lawsuit in the U.S. between state governments and tobacco companies, “health organizations were intimately involved,” Cunningham says.

In their open letter the anti-smoking groups also call for the disclosure of internal tobacco company documents.

U.S. companies were required to publish 40 million pages of internal documents as part of a settlement in a similar state-versus-Big Tobacco case. Cunningham says the Ontario government was given millions of pages of documents as part of a pre-trial process but companies in Canada have not yet had to publish anything.

“It’s a matter of justice for those documents to become public,” Cunningham says. “They’ll tell us what the companies did or didn’t know, what strategies they used to keep people smoking, what they knew about the health impacts.”

Around 125 Canadians die every day from smoking-related illnesses, which is more than the deaths from alcohol, opioids, suicides, murders and traffic crashes together, according to the federal government. That adds up to 48,000 tobacco-related deaths every year, or over one million deaths since 2000.

This also adds an annual $5.4 billion to the country’s total health-care costs, Cunningham says.

Canada’s Tobacco Strategy committed $330 million in 2018 to help people quit smoking and protect young people and non-smokers from the health impacts of tobacco use. Its goal is to have less than five per cent of Canadians using tobacco by 2035.

According to the latest national tobacco and nicotine survey, 12 per cent of Canadians currently use tobacco on a monthly basis.

There are higher rates of tobacco use in LGBTQ2S+ and Indigenous communities and smoking is often linked to other health and social inequities, according to the government website.

Tobacco is considered a sacred plant by many Indigenous groups across many parts of the country, according to the First Nations Health Authority. The health authority distinguishes between its use in ritual, ceremony and prayer, and its use in commercial, non-traditional products such as cigarettes.

In 1998, all U.S. states, territories and the District of Columbia won a major lawsuit against the country’s four major tobacco companies, which agreed to pay for billions of dollars in damages caused by their products. As of last year the companies have paid out US$206 billion and will have to continue paying US$9 billion every year, forever.

That caught the attention of 100,000 Quebecers who filed two class-action lawsuits against Canadian tobacco companies in the same year as the U.S. settlement, alleging cigarettes made them sick and they were unable to quit.

In a 2015 decision, a judge ruled tobacco companies had known cigarettes cause cancer since the 1950s and ordered them to pay $15.5 billion.

The companies appealed this decision but lost the appeal in 2019.

B.C. launched its own lawsuit against Big Tobacco in 1998.

The lawsuit argues tobacco companies should be held responsible of health-care costs because they allegedly marketed to children, falsely marketed “light” cigarettes as safer, suppressed research about the harms of smoking, conspired to invalidate public health warnings, according to a provincial website.

In 2012 B.C. joined New Brunswick, Nova Scotia, Saskatchewan, Manitoba and P.E.I. to create a single, national lawsuit against Imperial Tobacco Canada Ltd., Rothmans, Benson & Hedges Inc., and JTI-MacDonald Corp., as well as their foreign parent companies.

The claims from these lawsuits total more than $500 billion in damages, Cunningham says.

In 2019, when the companies lost the appeal in the Quebec case, they filed for creditor protection.

“Normally creditor protection is for companies that can’t pay their bills,” Cunningham says. “They make profits every year. What it did was immediately stop the lawsuits against them in their tracks and made them not have to pay dividends to their parent companies.”

Since filing for protection, the three largest tobacco companies have added roughly $10 billion to their bank accounts, he adds.

“The strategy of tobacco companies has always been delay, delay, delay,” Cunningham continues. “Tobacco companies will try to pay as little as possible.”

The Tyee reached out to Canada’s largest tobacco companies, Imperial Tobacco Canada Ltd., Rothmans, Benson and Hedges Inc. and JTI-MacDonald Corp. to ask for comment on negotiations.

JTI-MacDonald said it was in talks to “reach the most effective resolution for our business and all stakeholders.” Imperial Tobacco Canada said it was working to settle all tobacco claims. Both cited creditor protection and said other details of the negotiations were confidential.

Rothmans, Benson and Hedges Inc. did not respond by press time.

The Tyee also contacted the provincial Health Ministry, who deferred to the Ministry of Attorney General.

“As a result of a court ordered mediation and related confidentiality obligations, we can make no further comments at this time,” a ministry spokesperson said.  [Tyee]

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