Money from the historic tobacco settlement is set to flow to states and territories from Friday, but supporters say the money needs to go towards a health program aimed at smoking bans and young people prevention.
The settlement was approved in March by Ontario Superior Court Judge Jeffrey Morawetz, and $32.5 billion in compensation was distributed.
“There is a historic opportunity for provincial and territorial governments to invest in state and territorial governments to allocate a significant portion of their funds to reduce smoking and reduce tobacco use,” said Rob Cunningham, senior policy analyst at the Canadian Cancer Society.
The settlement was first made in October 2024 after years of mediation between JTI-Macdonald Corp., Rothmans, Benson and Hedges and Imperial Tobacco Canada Ltd. and the three creditors.
Among these creditors were plaintiffs in two Quebec class action cases, as well as provincial and territorial governments seeking to collect smoking-related medical expenses.
Under the settlement, approximately $24 billion will be deployed in provinces and territories for 20 years, but plaintiffs in the two Quebec cases will receive more than $4 billion. Billing periods for these members will open on Friday.
However, on Friday, a portion of the entire settlement was rolled out directly to the provinces and regions, with Ontario and Quebec looking at $1.8 billion and $1.7 billion respectively.
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Canadian smokers are also compensated from the settlement, earning $2.5 billion for those not included in the lawsuit. Over $1 billion will be sent to the foundation to combat tobacco-related illnesses.
Imperial Tobacco said the spread of money is a “milestone” and a “milestone” to allow businesses to “continuously” manage their business.
“The settlement did a few things. I think it would maximize the payments of the claimants, but also took into account the industry's capabilities and payability,” said Eric Gagnon, vice-chairman of the Imperial Corporate and Regulation Affairs. “We are on a journey to support Canada's purpose of reducing smoking cases in the country to less than 5% by 2035.”
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Rothmans, Benson & Hedges said via email they are pleased that the settlement is in place.
“This plan will resolve all Canadian tobacco product-related claims and litigation against RBH and its affiliates, ensuring RBH and its stakeholders can be fully focused on the future,” the email said.
Details of how money is spent “to be determined”
When the funds were announced, some states showed where their stocks would go. Saskatchewan, for example, said the money would support cancer care and prevention efforts.
But some people haven't said what they're going to do or how the money will be used.
“It should still be decided how these funds will ultimately be allocated,” the Alberta Department of Preventive Health Services told Global News via email.
Quebec's Ministare de la Sante et Service Society said it would be difficult to determine how the money will be spent because the funds have been diversified for 20 years, but said the goal was to reduce the proportion of smokers in the province to 10%.
“For years, raising awareness of the risks of cigarette control and cigarette use has been a priority for MSSS,” the spokesman wrote in an email.
British Columbia Attorney General Niki Sharma called the first uprollout mark a “significant milestone” and added money on Friday, with an overall expected $3.7 million investment, but not accurately broken down into a specific tobacco strategy.
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“Regardless of settlements or future payments, the government will continue to invest in cancer treatment, primary care and treatment research, promoting smoking cessation for the benefit of Colombians in the UK,” Sharma said.
Robert Schwartz, professor emeritus at the University of Toronto and executive director of the Ontario Tobacco Research Unit, said there is a lack of information on where the money will go.
“It's scandalous,” he said. “Provinces like Ontario don't tell you what they're trying to do with money. That means the default is to get into common financial resources and get lost. At the very least, what the province could do was to take this money and invest in tobacco management to prevent many people from getting sick and dying in the future.”
The number of smokers in Canada has dropped to the lowest level, but around 4 million tobacco smokers remain in the country, with around 46,000 people dying from tobacco-related deaths each year.
While billions have been sent out, some supporters like Les Hagen say it is still a “disappointment.”
Hagen, executive director of the Association for Smoking and Health Behavior, said: “This settlement is actually a 40-year license to keep the tobacco industry in business and in its insight.”
Hagen continued to criticize what he said was a lack of relief in the settlement, but added that it could improve the state and territory.
“They can take further action to limit marketing efforts in this industry, and of course some of these funds can take a very large path to supporting smokers.
Gagnon argued that tobacco companies are still in place will help them avoid illegal markets.
“We adhere to all regulations and are aware of the health risks associated with smoking,” Gagnon said. “But if tomorrow morning the government decides they don't want a legal tobacco industry, they'll be allowed to do that, but we have to accept that 100% of the market is illegal and people still continue to smoke.”
This agreement is a pan-Canadian settlement of all outstanding tobacco litigation in the country. As Schwartz pointed out, businesses faced claims totaling more than $1 trillion, including lawsuits from the state government attempting to recover smoking-related medical expenses and other actions.
– Using the files of Andrea McPherson and Canadian media from Global News