During the lengthy process, some 700 Quebec class members succumbed to their tobacco-related illnesses and died. Others chose assisted suicide.
This story was originally published on July 4, 2024. On Oct. 17, three large tobacco companies — JTI Macdonald Corp., Rothmans, Benson & Hedges Inc., and Imperial Tobacco Canada Ltd. — filed a proposed plan to pay $32.5 billion to settle legal claims launched by the provinces, including a landmark 2015 Quebec class-action lawsuit.
OTTAWA — For more than two decades, big tobacco companies in Canada have been fighting lawsuits claiming they sold a highly addictive product that caused cancer while holding back information about the health risks.
Between 1998 and 2012, every Canadian province and territory filed suit looking to recover hundreds of billions of dollars in costs of providing health care to former smokers. Several other class-action lawsuits were also filed on behalf of Canadian smokers.
The tobacco companies have yet to payout a single cent in Canada from any of these suits.
In contrast to Canada’s long wait, tobacco companies settled similar suits with all U.S. states by 1998, the same year British Columbia moved forward with the first provincial lawsuit.
In 2015, after years of pre-trial appeals and a 251-day trial, one of the Canadian class-action lawsuits, known as the Blais and Letourneau case, won a historic judgment. The judge ruled against Canada’s largest tobacco companies — Imperial Tobacco, Rothmans, Benson & Hedges and JTI-MacDonald — finding them at fault and ordering the payment of $15 billion in damages to an estimated 100,000 Quebec smokers.
The tobacco companies appealed, but in 2019 they lost at the Quebec Court of Appeal.
Every Canadian suit against them was stopped after that appeal court ruling. That’s because the tobacco companies, who produce hundreds of millions in profits annually, have been in bankruptcy ever since.
Smoking remains the largest cause of premature death in Canada, taking the lives of 48,000 people a year, according to Statistics Canada. A 2018 Conference Board of Canada report estimated smoking-related illnesses cost the health-care system $6.5 billion a year.
In the lawsuits, the provinces are seeking more than $600 billion, targeting both the Canadian firms and their global parent companies. The other class-action suits are also seeking billions of dollars, amounts exceeding the funds the companies actually have.
But there are hints a big tobacco payout may finally be coming.
Since 2019, when the bankruptcy proceedings began, a mediation process has been playing out behind closed doors. The proceedings’ stated goal is to come to a global settlement that will resolve all the lawsuits.
Manitoba Premier Wab Kinew told a roomful of NDP supporters in May that a settlement may be close. He said the proposal is “with the federal government,” and that his province’s share would fund a new cancer-care facility. Kinew has since declined to expand on what he knows about the settlement talks.
Multiple federal government departments contacted by National Post said they were not involved in the legal process. Health care is a provincial responsibility under Canada’s constitution and the federal government has not filed suit against tobacco companies to recover health-care costs.
Yuval Daniel, press secretary to mental health minister Ya’ara Saks, said the federal government is not a party in the litigation.
The U.S. settlement required tobacco companies to end any advertising for their products, fund programs designed to discourage youth smoking, and pay out just over US$200 billion over 25 years. Even as the final year of that initial settlement is reached in 2025, tobacco companies will still have to pay US$9 billion to the states every year.
Canada has enacted similar laws, banning tobacco advertisements since the mid 1990s. However, smoking rates remain roughly the same in Canada and the U.S., with about 11 per cent of people over the age of 15 self-reporting as regular smokers.
Kinew’s vague comments about the tobacco lawsuits remain the most detailed from any provincial government about what is happening inside those confidential mediation rooms. The National Post reached out to several provinces, all of whom declined to answer any questions about the process, citing the court-imposed confidentiality.
Flory Doucas, with the Quebec Coalition for Tobacco Control, said provinces must respect the confidentiality of the mediation process, but they could have said what they’re trying to achieve.
“Nothing prevented governments from stating what their principal objectives were in terms of public health, because that is what led to this whole saga,” she said.
Most of the provinces brought in outside lawyers to prosecute the case, many of whom are operating on a contingency basis, meaning they will be paid out of the future settlement. The provinces of British Columbia, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Saskatchewan and the three territories all share the same legal representation, a consortium of major law firms.
Certain Quebec class members could wait no longer and have opted to end their lives by assisted suicide
“During the timeframe of the [bankruptcy] proceedings alone, approximately 700 Quebec class members have unfortunately succumbed to their tobacco-related illnesses and died and many more are becoming increasingly frail,” he wrote.
“Certain Quebec class members could wait no longer and have opted to end their lives by assisted suicide.”
Trudel accused some parties to the negotiations of shifting their stance and delaying the process.
“Since the last extension was granted, the mediation process has been severely undermined by certain claimants who reneged on prior positions and failed to act in an acceptable or appropriate manner,” he wrote in his submission. “Certain claimants appear to view delay as a tactical advantage rather than a concern.”
Because of the secrecy around the process, Trudel did not name names. The tobacco companies brought the application for the extension and Trudel did not challenge that they were operating in good faith. The provinces and other class suits are the only other parties in the litigation; it is not clear who Trudel was referring to.
The National Post reached out to Trudel, but did not get a response.
Cynthia Callard, a spokesperson for Physicians for a Smoke-Free Canada, has closely followed the case. She said Trudel seemed more accepting of the 11th extension, which happened this spring. She saw this as a sign a settlement was close, but said nothing is certain.
“It’s always possible there’s another roadblock we won’t hear about until September,” she said.
She added the delays, whoever is responsible, are working just fine for the tobacco companies.
“The industry is motivated to demonstrate to the rest of the world that litigation isn’t really a very efficient or effective way of doing it,” she said. “It’s motivated to make sure that governments everywhere, not just in Canada, are reluctant to follow suit.”
Since the bankruptcy process began, the three companies have been supervised by court-appointed monitors — large accounting firms who have overseen their business operations. During bankruptcy, the companies can’t transfer their profits to their international parent companies or pay funds out to shareholders, but otherwise they can continue business as usual.
According to filed financial statements, it is estimated the three companies have banked a combined $12 billion since entering bankruptcy in 2019.
Callard said the companies have taken this time to create new products, like vaping and tobacco pouches.
“It meant that there was no disincentive for the companies to spend large amounts of money promoting vaping products and shifting their market, because they weren’t getting to keep the money anyway,” she said.
Callard said last year the court also called on those monitors to draft a bankruptcy proposal on their own, another hint of a possible settlement.
“I am hopeful that there will be resolution; whether the resolution improves the lives of Canadians, that’s a real question for us.”
Some of the tobacco companies now talk openly about moving away from cigarette sales permanently, focusing on tobacco pouches and vaping products.
Health Minister Mark Holland has railed against these smoking alternatives, arguing the flavours and marketing of these products makes them attractive to children.
“Vaping has, I think, been really made problematic by these flavours that the evidence shows attract young people,” he said earlier this year.
The Liberals have brought in new legislation that would restrict how products like these are marketed. The ongoing bankruptcy process has prevented new lawsuits against the companies related to their new products.
nationalpost.com
This story was originally published on July 4, 2024. On Oct. 17, three large tobacco companies — JTI Macdonald Corp., Rothmans, Benson & Hedges Inc., and Imperial Tobacco Canada Ltd. — filed a proposed plan to pay $32.5 billion to settle legal claims launched by the provinces, including a landmark 2015 Quebec class-action lawsuit.
OTTAWA — For more than two decades, big tobacco companies in Canada have been fighting lawsuits claiming they sold a highly addictive product that caused cancer while holding back information about the health risks.
Between 1998 and 2012, every Canadian province and territory filed suit looking to recover hundreds of billions of dollars in costs of providing health care to former smokers. Several other class-action lawsuits were also filed on behalf of Canadian smokers.
The tobacco companies have yet to payout a single cent in Canada from any of these suits.
In contrast to Canada’s long wait, tobacco companies settled similar suits with all U.S. states by 1998, the same year British Columbia moved forward with the first provincial lawsuit.
In 2015, after years of pre-trial appeals and a 251-day trial, one of the Canadian class-action lawsuits, known as the Blais and Letourneau case, won a historic judgment. The judge ruled against Canada’s largest tobacco companies — Imperial Tobacco, Rothmans, Benson & Hedges and JTI-MacDonald — finding them at fault and ordering the payment of $15 billion in damages to an estimated 100,000 Quebec smokers.
The tobacco companies appealed, but in 2019 they lost at the Quebec Court of Appeal.
Every Canadian suit against them was stopped after that appeal court ruling. That’s because the tobacco companies, who produce hundreds of millions in profits annually, have been in bankruptcy ever since.
Smoking remains the largest cause of premature death in Canada, taking the lives of 48,000 people a year, according to Statistics Canada. A 2018 Conference Board of Canada report estimated smoking-related illnesses cost the health-care system $6.5 billion a year.
In the lawsuits, the provinces are seeking more than $600 billion, targeting both the Canadian firms and their global parent companies. The other class-action suits are also seeking billions of dollars, amounts exceeding the funds the companies actually have.
But there are hints a big tobacco payout may finally be coming.
Since 2019, when the bankruptcy proceedings began, a mediation process has been playing out behind closed doors. The proceedings’ stated goal is to come to a global settlement that will resolve all the lawsuits.
Manitoba Premier Wab Kinew told a roomful of NDP supporters in May that a settlement may be close. He said the proposal is “with the federal government,” and that his province’s share would fund a new cancer-care facility. Kinew has since declined to expand on what he knows about the settlement talks.
Multiple federal government departments contacted by National Post said they were not involved in the legal process. Health care is a provincial responsibility under Canada’s constitution and the federal government has not filed suit against tobacco companies to recover health-care costs.
Yuval Daniel, press secretary to mental health minister Ya’ara Saks, said the federal government is not a party in the litigation.
The U.S. settlement required tobacco companies to end any advertising for their products, fund programs designed to discourage youth smoking, and pay out just over US$200 billion over 25 years. Even as the final year of that initial settlement is reached in 2025, tobacco companies will still have to pay US$9 billion to the states every year.
Canada has enacted similar laws, banning tobacco advertisements since the mid 1990s. However, smoking rates remain roughly the same in Canada and the U.S., with about 11 per cent of people over the age of 15 self-reporting as regular smokers.
Kinew’s vague comments about the tobacco lawsuits remain the most detailed from any provincial government about what is happening inside those confidential mediation rooms. The National Post reached out to several provinces, all of whom declined to answer any questions about the process, citing the court-imposed confidentiality.
Flory Doucas, with the Quebec Coalition for Tobacco Control, said provinces must respect the confidentiality of the mediation process, but they could have said what they’re trying to achieve.
“Nothing prevented governments from stating what their principal objectives were in terms of public health, because that is what led to this whole saga,” she said.
Most of the provinces brought in outside lawyers to prosecute the case, many of whom are operating on a contingency basis, meaning they will be paid out of the future settlement. The provinces of British Columbia, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Saskatchewan and the three territories all share the same legal representation, a consortium of major law firms.
Certain Quebec class members could wait no longer and have opted to end their lives by assisted suicide
He said the Quebec smokers, who thought they had won the case after that 251-day trial in 2015, feel as though they will never collect.
“During the timeframe of the [bankruptcy] proceedings alone, approximately 700 Quebec class members have unfortunately succumbed to their tobacco-related illnesses and died and many more are becoming increasingly frail,” he wrote.
“Certain Quebec class members could wait no longer and have opted to end their lives by assisted suicide.”
Trudel accused some parties to the negotiations of shifting their stance and delaying the process.
“Since the last extension was granted, the mediation process has been severely undermined by certain claimants who reneged on prior positions and failed to act in an acceptable or appropriate manner,” he wrote in his submission. “Certain claimants appear to view delay as a tactical advantage rather than a concern.”
Because of the secrecy around the process, Trudel did not name names. The tobacco companies brought the application for the extension and Trudel did not challenge that they were operating in good faith. The provinces and other class suits are the only other parties in the litigation; it is not clear who Trudel was referring to.
The National Post reached out to Trudel, but did not get a response.
Cynthia Callard, a spokesperson for Physicians for a Smoke-Free Canada, has closely followed the case. She said Trudel seemed more accepting of the 11th extension, which happened this spring. She saw this as a sign a settlement was close, but said nothing is certain.
“It’s always possible there’s another roadblock we won’t hear about until September,” she said.
She added the delays, whoever is responsible, are working just fine for the tobacco companies.
“The industry is motivated to demonstrate to the rest of the world that litigation isn’t really a very efficient or effective way of doing it,” she said. “It’s motivated to make sure that governments everywhere, not just in Canada, are reluctant to follow suit.”
Since the bankruptcy process began, the three companies have been supervised by court-appointed monitors — large accounting firms who have overseen their business operations. During bankruptcy, the companies can’t transfer their profits to their international parent companies or pay funds out to shareholders, but otherwise they can continue business as usual.
According to filed financial statements, it is estimated the three companies have banked a combined $12 billion since entering bankruptcy in 2019.
Callard said the companies have taken this time to create new products, like vaping and tobacco pouches.
“It meant that there was no disincentive for the companies to spend large amounts of money promoting vaping products and shifting their market, because they weren’t getting to keep the money anyway,” she said.
Callard said last year the court also called on those monitors to draft a bankruptcy proposal on their own, another hint of a possible settlement.
“I am hopeful that there will be resolution; whether the resolution improves the lives of Canadians, that’s a real question for us.”
Some of the tobacco companies now talk openly about moving away from cigarette sales permanently, focusing on tobacco pouches and vaping products.
Health Minister Mark Holland has railed against these smoking alternatives, arguing the flavours and marketing of these products makes them attractive to children.
“Vaping has, I think, been really made problematic by these flavours that the evidence shows attract young people,” he said earlier this year.
The Liberals have brought in new legislation that would restrict how products like these are marketed. The ongoing bankruptcy process has prevented new lawsuits against the companies related to their new products.
Why it took Canada more than two decades to get big tobacco to pay up
There are hints a lengthy court process over Canada's tobacco companies may finally be coming to an end.
nationalpost.com
