Groups condemn "betrayal of public health" as pro-industry settlement gets creditor approval

OTTAWA, ON, MONTREAL and EDMONTON, AB, Dec. 12, 2024 /CNW/ - Three antitobacco groups, Physicians for a Smoke-Free Canada, Action on Smoking & Health (ASH Canada) and the Quebec Coalition for Tobacco Control condemned the unpresented selling-out to Big Tobacco with the creditor vote today approving the settlement plan after five years of secret backdoor negotiations.

"Provincial and territorial governments that voted for this plan have thrown the public's interest under the bus. They have given the tobacco industry everything it could possibly have wished for. With this immensely flawed settlement, they have squandered a unique opportunity to change Big Tobacco's profitable addiction and disease business model in Canada," says Flory Doucas, Co-Director and spokesperson of the Quebec Coalition for Tobacco Control.

"Today's vote is a very sad day for tobacco control and a dangerous precedent for achieving corporate accountability. The CCAA process was always the wrong tool to deal with rogue industry like tobacco giants whose products have killed over a million smokers in Canada.

"The money to be gained through these negotiations has blinded provincial governments to the further harm these companies will continue to cause. There was sufficient money on the table to properly compensate victims without relying on future sales to fund payments to governments. Normally, companies facing insolvency are forced to restructure, but not Big Tobacco. They can continue 'business as usual' to recruit and addict new generations of addicts whose lives will be ruined and whose diseases will result in more health care costs.

"The settlement contains no measures to accelerate the decline in smoking or prevent the recruitment of new smokers and vapers. Instead, the settlement aims to perpetuate commercial tobacco use and youth vaping for the foreseeable future. The Plan is actually designed to be financed by the continued tobacco purchases of addicted smokers. Future payments to provinces depend on the continuation of financial and social harm caused by tobacco addiction," she adds

According to the now approved plan, provinces and territories will receive a percentage of the net revenues from tobacco sales (exclusive of excise and sales taxes) until $20 billion has been received, and forecasts that the companies' revenues will be maintained at over $1 billion per year. "

Provinces and territories should counterbalance this money-grab with concrete measures

"Given the colossal net loss for public health that this settlement represents, provinces should compensate their failure to include concrete health measures in this settlement with new and bold provincial laws to accelerate the decline in smoking and reverse the youth vaping problem. Endgame measures like phasing out combustible cigarettes or eliminating the profitability of addiction to harmful products are workable options to consider," says Les Hagen, Executive Director of ASH-Canada. "If Canadian governments can phase-out internal combustion vehicles, single-use plastics and CO2 emissions—they can certainly phase-out an industry whose products kill almost 50,000 Canadians annually."

Nothing to acknowledge or correct harmful behaviour

"The settlement does nothing to acknowledge, address or correct the harmful and wrongful actions of the tobacco industry," adds Cynthia Callard, Executive Director of Physicians for a Smoke-Free Canada.

Quebec courts ruled that Canada's three largest cigarette manufacturers acted illegally throughout the decades that were the subject of one of Canada's longest civil tort trials. The companies were found guilty of failing to ensure that consumers were provided with information about the risks associated with their products, of misleading consumers by attacking the health information provided by others, of misleading consumers through their advertising and of violating the rights of Quebecers to life and personal security. These wrongful behaviours did not end in 1998, and that there are strong echoes of their past behaviour in their current marketing of novel nicotine products. 

Protecting the industry's new nicotine products

"Instead of ensuring that there is a foreseeable end to the industry's harmful and addictive products and deceitful marketing, the settlement ensures that they will continue," adds Ms Callard. Indeed, the settlement contains a set of covenants and undertakings by the companies, including a commitment that the "operational practices" they have established for selling tobacco will be maintained. The apparent goal of this covenant is to ensure that tobacco revenues and the payments that are based on them will remain high.

"Under the bankruptcy process, governments could have negotiated solutions to such problems like front groups that parrot industry half-truths, legal threats and an ever-evolving array of new products and gimmicks aimed to eluding rules that protect kids. On the contrary, the provinces and territories agreed to prioritize the viability of the tobacco industry's new business model focussed of nicotine addiction through products like vaping, heated tobacco and other novel products," explains Ms Callard.

"One has to ask: why grant the tobacco industry the rare and unique privilege of carving out the profits generated by these new product categories? Any other company would have dig into all of their profits to pay such fines. After all, it's the owners and shareholders who share the responsibility for the damage their products cause, not the products themselves."

Even the $1 billion that is meant to create a foundation to fund research is only focused on "improving outcomes in tobacco-related diseases" to "provide indirect benefits to" smokers who were or will be injured by tobacco products. This as well is no threat to industry profits as they will have already cashed in from all the cigarettes these victims have purchased. Nothing in the foundation rules allows aims to prevent addiction and harms to new consumers or to help smokers quit or to support the traditional pillars of tobacco control.

SOURCE Quebec Coalition for Tobacco Control

Information: Cynthia Callard, 613-600-5794; Flory Doucas, 514-515-6780; Les Hagen, 780-919-5546