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Ont. files $50-billion suit against tobacco companies
Updated: Tue Sep. 29 2009 5:35:12 PM
The Canadian Press
TORONTO — Ontario has become the latest jurisdiction to take aim at Big Tobacco's wallet, launching a lawsuit to recover smoking-related health costs from a beleaguered industry that denounced the action as hypocritical.
The suit, which seeks a jaw-dropping $50 billion from a dozen Canadian firms and their parent companies, follows enabling legislation the province passed earlier this year to the delight of anti-smoking groups.
"That is our view of the costs of health-care related illnesses directly tied to tobacco from 1955 until now," Attorney General Chris Bentley said of the damages claim.
"We believe that taxpayers should be compensated for the costs that they have paid."
The claim follows similar actions in British Columbia and New Brunswick, as well as in the United States and abroad.
Among those named in the suit is Canada's largest tobacco manufacturer, Imperial Tobacco Co., a wholly owned unit of British American Tobacco of London that sells cigarettes under such well-known brands as du Maurier and Player's.
Imperial spokesman Eric Gagnon said the suit came as no surprise given the legislation, but suggested the Ontario government was being hypocritical.
"They're collecting billions of dollars in taxes, and right now they are turning and suing the tobacco companies," Gagnon said from Montreal.
"This is a legal product and we do it in the way the government dictates us to do it."
Tobacco companies in Canada operate under increasingly stringent legislation that includes, for example, restrictions on the sale of cigarettes to minors, how products can be displayed in stores and bans on advertising.
The government also regulates other products, such as alcohol and casinos, which can pose significant health and safety risks, Gagnon noted.
"Are they going to sue those industries?" he said. "From our perspective this does not make any sense."
Bentley said he had no plans go after other industries. He also rejected a connection between tobacco taxes and the suit, arguing the cost of health care related to smoking "far exceeds" the amount collected in taxes.
Ontario collects about $1.1 billion in tobacco taxes out of a total of more than $7 billion levied by all governments in Canada.
The lawsuit makes numerous claims. Among other things, it alleges the companies have long known that cigarettes were addictive, and that active and passive smoking can cause diseases such as lung cancer, but did little to mitigate the risk.
It also accuses the companies of conspiring to mislead the public about the dangers, suppressing evidence of the risks, and failing to take proper care to stop adolescents from smoking.
The claims have not been proven in court.
The province says tobacco-related illnesses cost the health-care system more than $1.6 billion per year. Tobacco use accounts for the deaths of about 13,000 Ontario residents each year, or 36 deaths per day, and almost 500,000 hospital days annually.
Anti-smoking groups welcomed the lawsuit, but said any money the province might win should be earmarked for public health, and not go into general revenues.
"If litigation is used by government only to recover the costs of treating diseases but not used to establish ways of reducing tobacco-caused disease, justice will not be done," said Dr. Atul Kapur, president of Physicians for a Smoke-Free Canada.
Bentley said he wasn't prepared to spend any money before he had it, adding the lawsuit could take years to play out.
Tobacco companies have been taking it on the chin around the world for years.
In the U.S., all 50 states have launched legal action to recover the costs of smoking-related illnesses. In 1998, the states agreed to a US$25 billion out-of-court settlement.
Last month, a Los Angeles jury recommended that Philip Morris USA pay US$13.8 million in punitive damages to the daughter of a longtime smoker who died of lung cancer.
Earlier this summer, three Japanese took on Japan Tobacco Inc., half owned by the government, seeking US$320,000.
The Ontario government ruled out banning tobacco, arguing education and progressive restrictions on smoking were the smarter way to go.
Also named in the suit is the Canadian Tobacco Manufacturers Council, an industry lobby group.
Other provinces are also expected to take legal action of their own against the industry.
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Parallax Abstraction
Hilarious. The tobacco industry is one of the most highly taxes industries in this country and in addition, sell a legal product. Any increase in health care costs I bet is dollars to donuts covered and then some by the ever-increasing tax burden this industry has.
McGuinty's inept leadership has this province bleeding money and now he wants to spend millions more mounting a court challenge against an industry without whose revenue, this province would be even further in the red.
I don't smoke and don't care for it at all but this is insanity. If the government was truly concerned about the public health impacts of smoking, they would just ban tobacco products. They won't do that however because they make far too much money from this industry, money which they would be crippled without. Better to impose smoking bans on private property owners and once in a while, file a frivolous lawsuit to make it look like you really care about the issue when in reality, you have one hand out for money and are smacking the person giving it to you with the other.
McGuinty & Co. are a burden on this province that must be removed.
Joe
How about if you decide to smoke, you void your health care.
Cleaver
Great idea government, sue the tobacco companies. Oh, how about all that tax money from the sale of tobacco products you decided to collect over that period of time? What a bunch of hypocrites.
Sarah
About time!
I think that smokers should pay more on their income tax to help support their future health care costs as well. If the smoker quits, after one year they should get a tax break of $2500 (rough estimate of a carton of cigarettes per week for one year)
odatjo
Nicotene is a strong drug and many become addicted to nicotene..... the cigarette companies have always known this and continued to advertise and sell cigarettes. They should be held responsible since they knew what the smoker did not know. It is a very hard addiction to quit and that's what keeps many smoking. Good that cigarettes are now hidden from view and not sold to people under 18, hope that is the right age. There is no easy way to get people to stop smoking, they have to desperately want to quit, but by then they may have serious health problems that the taxpayer foots the bill for.
reidjr
Joe
How about people that over drink and do drugs and over eat should they aslo not get health care.
Sophia
I agree with Parallax......they make millions of dollars in taxes off of smokers...they raise the taxes on this product almost every year because they know most people will continue to purchase them. How about the government to start going after fast food chains and the likes..maybe even that big fair they have at the end of August in Ottawa....go after the vendors, tax them all to death....the fast food and junk people purchase and consume, our country has a problem with obesity, far more taxing on our health system than smokers as this covers all age groups! Obesity has led to many health problems in all ages and our government has not made as much in taxes to cover the health care for this problem!
J.D.
I also suggest that they tax donut shops, fast food, chip wagons, hamburger/hot dog stands, KFC. And don't forget make those who don't exercise pay more taxes.
Don't forget car, bus & truck manufacturers who poison our air. Also all the plants that put chemicals in the air and our water.
Where will it all stop. Maybe the govt should give a tax credit for people who join gyms and such.
All that will happen anyway is that they will increase there prices and we will still pay.
GS
Instead of encouraging sales of tobacco on the one side and suing on the next, government should not cover any tobacco related illness under the OHIP plan or charge a portion of the costs directly to smokers.
We should also ban all public smoking completely (inside or out) for it is very awful to come out on the sidewalk to be going through a smoking cloud or stinky smokers. Very bad to get into an elevator or bus with people that smell like an ashtray. The government should concentrate more on imposing tougher rules(and enforcing them unlike OC transpo)while hicking cigarette prices. 15 to 20 $ a pack sounds good, and then if you choose to be poor versus healthy that is your choice and have to live with the consequences of higher medical bills and nowhere to go for a smoke.
J.D.
Just an after thought. go by the schools and see our youth that smoke. It is illegal to purchase cigarettes under 18 but not to smoke.
jo
Well, I may smoke but do not drink, what about all the drinkers out there with liver problems that are in our hospitals and are dying?Why are the company's who make alcohol not being sued to cover the bills in our hospitals. The government needs to stop this bull crap stop arguing who will be in power and how much money they would get from tax payers or company's.I have been smoking for 24 yrs and will not stop.And if they were to ban it all together then you would see taxpayers paying out a lot more than they do now? The question is what does our darn government really do with our$$$$$$ Maybe the citizens of Ontario should ask for an AUDIT to be done on our so called government to really see where our money does go and I'll bet ya a lot of it is spent on CRAP!
Jayme
GS
You can't just pick on smokers and leave it.Ok you don't think they should get medical care then that aslo applies to these groups.
Drug Users
No treatment centres or medical care unless they pay for it.
Obesse People
No medical care or a heavy tax on fast food to cover costs.
The list goes on and on.
Gerry in Barrhaven
This is yet another smokescreen by the McGuinty Government. We all know that they will have to prove each and every individual died because of cancer caused by smoking, and there is still not definitive link between smoking and cancer. Then there is the fact that people weren't forced to smoke, the chose to smoke. There is no smoking gun here.
This is a thinly veiled attempt by our government to deal with a deficit they have brought on themselves by all their monetary give aways.
If our government really wanted to eradicate smoking, they would ban it, not collect taxes, and court settlements from it.
The only good thing to come from smoking is like...the Darwin Effect. People killing themselves due to their own stupidity, by smoking.
Smoke away my friends...smoke away.
Elena from Ottawa
Good move on the part of the Ontario government. First, recoup health care costs from 1964, the year when all cigarette packs had to warn of dangers of smoking, to 2009. Then double the cost of cigarettes and divert half of the purchase price toward a government-regulated health care fund to offset the cost of future smoking-related illnesses.
Cliff
I think smoking is absurd, but see the Ontario govt as absurd also. With all the revenue they have taken from tobacco, it's hypocritical to sue them. Why not just outlaw tobacco like other harmful drugs, or is that too tough politically?
Glen
I thought we paid for our health care through taxes? So does that mean a smokers health care is basicly paid by them anyways? So just let the people who pay for thier taxes the hell alone?
Travis
More signs of political hypocrisy.
Taxing a product that is legal validates the legality of it.
Suing the companies that produce the product is most idiotic, most back-stabbing.
Perhaps the government can turn its attention to more important matters... like not looking like the total jerks they are.
Madeleine
I totally agree with Parallax, Cleaver, Sohphia and J.D.. What will the government taxe us for next?
As usual we as the people can not win. Makes you wonder if they have too much time on their hands and can't think of anything better to work on.
Gabriel in Ottawa
since the government permits and regulates and even taxes cigarettes - and the government is supposed to look out for its dumb citizens - than smokers should be able to sue the government for permitting and faulty regulation and profiteering through obscene taxation on cigarettes. As well, the tobacco companies should be able to sue the government for the over taxation of their product - as the government has consistently indicated that this taxation is for Health Care costs (yes, i know they say as a deterent from buying cigarettes, but we all should know that price does not deter drug addiction).
And be sure to sue the Liquor Store and The Beer Store and Brewers Retail as well as all of the Wine Shops. Alcohol has a far worse impact on society and the Health Care system than smoking.
Sue all of the corner stores selling cigarettes too. And do not forget the makers and sellers of The Patch.
More people smoke in Ontario than voted for the Liberal government. Yes, just a random meaningless statement. Because we also know that the people only vote for whomever "the media" tells them to. And the "issues" are whatever the candidates tell us they are.