EDMONTON, AB and MONTRÉAL and
OTTAWA, ON, Sept. 27,
2024 /CNW/ - Three prominent tobacco-specific
health organizations are sounding the alarm regarding a potential
final settlement between Big Tobacco and provincial
governments (and other creditors) under the Companies' Creditors
Arrangement Act (CCAA). The health organizations are concerned
that a weak settlement would allow companies to survive
indefinitely despite their lethal past behavior and continue to
launch new products, cause more addiction and create further
harm.
Does the industry have a veto?
Action on Smoking & Health (ASH Canada), Physicians for a
Smoke-Free Canada (PSC) and the Quebec Coalition for Tobacco
Control (CQCT) are pointing to several statements in the court
motions tabled by the three biggest Canadian tobacco manufacturers
(see appendix below) which reinforce previously expressed fears
that provinces have agreed to an industry-friendly process. If so,
this process would favour corporate interests, ignores public
health objectives to end the harms which are the subject of the
lawsuits, and require provinces to cover the healthcare and social
costs of future victims.
"Not only has this insolvency process allowed the tobacco
industry to continue 'to operate its business in the normal course'
for five and a half years, but it also seems to have granted
tobacco manufacturers a veto on any final deal," warns
Cynthia Callard, PSC Executive
Director. Indeed, "Several passages in the companies'
motions, including references to a 'consensual' settlement, suggest
Big Tobacco is holding the big end of the stick – not the
creditors, including provincial governments and class action
lawyers."
"These companies are facing bankruptcy for pushing addictive
and dangerous products that have cost the lives of countless
Canadians through their lies and manipulations. They should have no
say in an outcome that seeks justice and compensation, and aims to
prevent future harm," adds Les
Hagen, Executive Director of ASH Canada. "These companies should
not be able to escape justice by sheltering under the Companies'
Creditor Arrangement Act. Provincial governments have a unique
opportunity to hold this ruthless industry to account and should
not agree to a deal that allows tobacco companies to escape justice
and cause more harm to future generations. Twenty-plus years of
court time and public funds should end with a victory for public
health, not the tobacco industry."
Delays allow companies to addict new customers and avoid
paying a single cent to victims.
The groups are also lamenting the thirteenth stay
requested by the tobacco companies, which would prolong the already
unacceptable delays, preventing even more tobacco victims and their
successors from ever seeing a single penny – despite winning
a 20-year legal battle for financial compensation.
"Every stay means some additional 75 class action
members1 will never see justice for themselves, as
they continue to die from the very diseases caused by these
predatory companies," explains Flory Doucas, CQCT
Spokesperson and Codirector. "From court documents, we learn
that companies are still investing in their future and looking to
expand their product range. Will the courts and governments attempt
to sell a deal that would allow these companies to market new
products in what should be groundbreaking historical settlement?
Alongside financial compensation, ancillary or token measures that
do not alter the core addiction-based business model of the tobacco
industry are simply unacceptable."
_______________________________
1 In September 2022, Quebec class action lawyers
revealed that in the 4½ years since the compagnies placed
themselves under bankruptcy protection, 670 class action members
have dies, at a rate of about 75 every six months.
|
A settlement should prevent future harm.
The groups are calling on the provinces – the creditors with the
largest combined claim – to use their established veto power to
guarantee that the ultimate public health objective is directly
embedded in any final settlement, that is, an accelerated phase-out
of combustible cigarettes and other addictive products marketed by
these same companies. This would ensure future payments do not
depend on the future sales of such products.
"Guided mostly by private law firms and finance
officicials, provinces have made the unfortunate decision of
engaging in a process that allows tobacco manufacturers to addict
new customers and cause more harm during the proceedings. We hope
they change course and reject any settlement that perpetuates the
harms at the core of the lawsuits they seek to resolve,"
concludes Ms. Callard.
Provinces can collect
considerably higher sums from forcing a court-supervised phase-out
of combustible
cigarettes through reduced healthcare costs than from splitting up
the funds that are currently available.
Indeed, an economic analysis by H. Krueger and Associates
Inc. shows that the savings to the healthcare
system resulting from a significant contraction in the tobacco
market would far exceed any realistic
compensation amounts for the provinces. According to this study,
Quebec and Ontario would generate
health savings of $22.2 billion and $26.1 billion, respectively, if
smoking prevalence fell to less than 5% by
2035. Such a reduction would represent 641,000 fewer smokers in
Quebec and 990,000 fewer smokers in
Ontario.
|
__________________________________________________________________________________________________________
APPENDIX: MOTION EXCERPTS [Our
underlines]:
Passages referring to a "consensual" settlement":
Rothmans, Benson & Hedges (RBH):
[Page 11:] "RBH commenced these proceedings … to enable it to
explore a consensual global resolution of these litigation
claims." [Page 16:] "RBH has attempted to work
collaboratively … to attempt to solve the myriad complex and
multi-faceted issues that must be worked out before a consensual
global resolution of Tobacco Claims can be implemented. … RBH
believes that progress on a number of these issues has been made.
However, there are some major remaining issues which RBH views as
vital to any consensual global settlement of Tobacco Claims. … RBH
believes that a global settlement that addresses all pending and
potential Tobacco Claims in a manner acceptable to RBH and the
requisite majorities of claimants remains the best outcome"
[Page 20:] "additional time is required to agree upon and
finalize a consensual plan of compromise and arrangement between
RBH and its creditors, and the associated documents to implement
the consensual plan. »
JTI-Macdonald (JTI): [Page 11:]
"(this) Applicant has conveyed to the Court-Appointed Mediator
its view on certain key issues that are outstanding and must be
resolved to achieve a consensual CCAA plan."
Passages indicating compagnies predicting no settlement
before six months:
Rothmans, Benson & Hedges (RBH):
[Page 20:] "RBH anticipates that not less than six months (and
perhaps more time) will be required."
JTI-Macdonald (JTI): [Page 8:] "the
Applicant estimates the parties will require at least six months to
complete the remaining steps, including the negotiation of a
consensual CCAA plan"
Passages showing compagnies predicting future business,
including expansion:
Imperial Tobacco (ITCAN)
: [Page 48:] "ITCAN has also continued, alone or in
concert with BAT, with certain initiatives to improve or streamline
business operations and expand its product offering including: …
(the launching of) Zonnic nicotine pouches … as a nicotine
replacement therapy product in traditional retail stores,
pharmacies and online,"
Rothmans, Benson & Hedges (RBH):
[Page 17:] "RBH investments in the Quebec Facility are expected
to continue at a similar level in future years." … RBH has expanded
their portfolio of smoke-free products, with the introduction of
the IQOS ILUMA heated tobacco system in November 2023, as well as the distribution of a
new 5mL VEEV NOW disposable vaping product in December,
2023."
JTI-Macdonald (JTI): [Page 4:] "the
Applicant plans to gradually convert its fleet to green vehicles
starting in 2025 to reduce emissions and advance a carbon-neutral
goal by 2030;" [Page 5:] "The Applicant is investing in and
testing machinery and equipment with a cost of approximately USD
$1.1 million," [*Note that while
this passage is part of the paragraph related to new plain
packaging requirement, it does not specify that new machinery or
equipment is required to comply with them.]
SOURCE Quebec Coalition for Tobacco Control