Money begins rolling out to provinces in ‘historic’ tobacco settlement
Money from a historic tobacco settlement is set to flow to provinces and territories starting Friday, but advocates say the money needs to go towards health programs aimed at smoking cessation and youth prevention.
The settlement was approved in March by Ontario Superior Court Chief Justice Geoffrey Morawetz, with $32.5 billion in compensation to be distributed.
“There is a historic opportunity for provincial and territorial governments to invest in their provincial tobacco control strategies, allocate a significant portion of the funds to reduce smoking, reduce tobacco use,” said Rob Cunningham, senior policy analyst at the Canadian Cancer Society.
The settlement first came about in October 2024 after years of mediation between JTI-Macdonald Corp., Rothmans, Benson and Hedges, and Imperial Tobacco Canada Ltd. and the three companies’ creditors.
Plaintiffs in two Quebec class-action lawsuits, as well as provinces and territorial governments seeking to recoup smoking-related health-care costs, were among those creditors.
Under the settlement, about $24 billion will roll out to provinces and territories over the span of two decades, while plaintiffs in the two Quebec lawsuits will receive more than $4 billion to split. The claims period for those members opens Friday.
But on Friday, a portion of the overall settlement will roll out directly to provinces and territories, with Ontario and Quebec seeing the most — $1.8 billion and $1.7 billion respectively.
Canadian smokers are also being compensated from the settlement, with $2.5 billion to go towards those not included in the lawsuits. More than $1 billion will go to a foundation to fight tobacco-related diseases, with part of the money coming from $131 million taken from the amount allocated to the Quebec plaintiffs.
Imperial Tobacco said the rollout of the money was a “milestone” as it allows them to move away from the Companies’ Creditors Arrangement Act and manage the business “in an ongoing basis.”
“The settlement did a few things. I think it maximizes the payments for claimants, but also took into consideration the ability of the industry and its capacity to pay,” said Eric Gagnon, vice-president of corporate and regulatory affairs for Imperial. “We’re on the journey to support Canada’s objective of reducing smoking incidents in this country below five per cent by 2035.”
Rothmans, Benson & Hedges said in an email it was pleased the settlement was being implemented.
“The plan resolves all tobacco product-related claims and litigation in Canada against RBH and its affiliates, allowing RBH and its stakeholders to focus fully on the future,” the email said.
When the funding was announced, some provinces indicated where their share would go. Saskatchewan, for example, said the money would support cancer care and prevention efforts.
But some have not said what they plan to do or how the money will be used.
“How these funds will ultimately be allocated is still to be determined,” the Ministry of Primary and Preventative Health Services of Alberta told Global News in an email.
Quebec’s Ministère de la Santé et des Services sociaux said due to the funding being spread out over 20 years, it is difficult to determine how the money will be spend, though its goal is to reduce the proportion of smokers in the province to 10 per cent.
“Tobacco control and raising awareness of the risks of tobacco use have been a priority for the MSSS for several years,” a spokesperson wrote in an email.
British Columbia Attorney General Niki Sharma called the initial up front rollout marks an “important milestone,” adding the money Friday and overall $3.7 million expected will be invested, though did not break down exactly how much will go into certain tobacco strategies.
“Regardless of any settlements or future payments, our government will continue to invest in cancer treatment, primary care and treatment research, and to promote smoking cessation for the benefit of British Columbians,” Sharma said.
Robert Schwartz, professor emeritus at the University of Toronto and executive director of the Ontario Tobacco Research Unit, said the lack of information on where the money will go is concerning.
“It’s scandalous,” he said. “Provinces like Ontario not telling us what they’re going to do with the money. I mean, you know, the default is that it goes into the general coffers and gets lost. The least that the province could do was to take this money and invest it in tobacco control to prevent many, many people in the future from becoming sick and dying.”
The number of smokers in Canada has dropped to its lowest levels, but there remains about four million tobacco smokers in the country and approximately 46,000 die from tobacco-related deaths every year.
While billions are being sent out, some advocates like Les Hagen says it’s still a “disappointment.”
“It’s a big disappointment because it’s really just all about the money,” Hagen, the executive director for the Association for Action on Smoking and Health, said. “This settlement is really a 40-year licence for the tobacco industry to keep operating in a business-as-usual manner.”
Hagen went on to criticize what he said is a lack of remedial measures in the settlement, but added it’s something provinces and territories could improve on.
“They can take further action to limit the marketing efforts of this industry, and of course … a small portion of those funds would go an awful long way to supporting smokers through increased, improved cessation programs (and) better prevention programs for youth,” Hagen said.
Gagnon argued having tobacco companies still in place may help avoid an illicit market.
“We comply with every regulation. We recognize the health risk associated with smoking,” Gagnon said. “But tomorrow morning if the government decided that they don’t want a tobacco industry that’s legal, they’re allowed to do that, but we have to accept that, you know, 100 per cent of the market will be illegal and people will continue to smoke nonetheless.”
The deal is a pan-Canadian settlement of all outstanding tobacco litigation in the country. As noted by Schwartz, the companies had faced claims totalling more than $1 trillion, including lawsuits from provincial governments seeking to recover smoking-related health-care costs as well as other actions.
— With files from Global News’ Andrea Macpherson and The Canadian Press
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