Big Tobacco Troubles in Canada

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Big Tobacco Troubles in Canada

BRITISH COLUMBIA -- By a unanimous vote of 9-0, the Supreme Court of Canada cleared the way for provincial governments in that country to proceed with legislation that could ultimately lead to claims totaling $80 billion against the tobacco industry, reported.

The first province that passed a law permitting such lawsuits was British Columbia (B.C.). That law, which was being challenged by the tobacco companies, was modeled on the cases brought by some 40 states in the United States for similar damages. Those claims ended in settlements totaling over $240 billion to be paid to states over the next 25 years, according to the report.

Now that the B.C. law has been found to be constitutional, it is likely that Canada’s other nine provinces will enact similar legislation, according to .

According to , the B.C. law was first struck down by a lower court. On appeal, however, the British Columbia Court of Appeals reversed that ruling and found the law to be proper. The Supreme Court of Canada heard the appeal in June. B.C. estimates its provincial government spends some $500 million annually to treat tobacco-related illnesses. The province has about 13 percent of Canada’s 32 million people. The potential claims that would date back to the 1950s could cost big tobacco companies $10 billion in that province alone.

The main defendants in the case would be Canada's leading cigarette makers. These include: British American Tobacco unit Imperial Tobacco Canada Ltd.; Altria Group Inc. units Philip Morris Inc. and Philip Morris International; Rothmans Benson & Hedges Inc., a unit of Philip Morris International and of Rothmans Inc.; and JTI-Macdonald Corp., owned by Japan Tobacco Inc.

The decision could also permit claims by the Canadian federal government for smoking-related healthcare costs it has incurred for those in the military and for native Indians, according to the report.

While consumer advocates and the Canadian Cancer Society consider the ruling to be an "enormous victory" against the tobacco industry that will benefit the public, the tobacco companies were quick to warn that there was a "limit" to how much they could pay, reported. reported there is bitter disagreement between the tobacco companies and provincial officials with respect to every issue involved in this dispute; especially concerning the amount of and method of calculating damages. The tobacco companies are incensed at the size of the potential damage claims and have taken the position that there is no "hidden vault for them to loot."