Eight Canadian provinces are to sue tobacco industry for healthcare costs

Eight Canadian provinces are preparing litigation against tobacco firms in what a tobacco company vice president has described in the Canadian Medical Association's journal as possibly “the biggest case in the history of Canadian jurisprudence” (CMAJ 2005;173:1307).

The provinces' actions follow a ruling in September that British Columbia's suit to recover billions of dollars in tobacco related healthcare costs was constitutional. Seven other provinces already have or are preparing legislation for the same purpose. Cynthia Callard, of Physicians for a Smoke-free Canada, said that this may offer an opportunity to “gradually close the whole machine [the tobacco industry] down by controlling supply.”

Canada's tobacco industry argues that British Columbia overstepped its powers by trying to apply provincial legislation to companies outside its jurisdiction. Other firms in the dispute are JTI-McDonald, Rothmans, Benson & Hedges, and the Canadian Tobacco Manufacturers' Council, as well as the foreign cigarette makers British American Tobacco, Philip Morris and R J Reynolds Tobacco.

Besides British Columbia, Newfoundland and Labrador, Ontario, and Nova Scotia all have legislation in process to allow them to proceed with litigation. Alberta, Manitoba, Quebec, and New Brunswick say they also will move ahead with legislation, while Prince Edward Island and Saskatchewan have not yet decided.

British Columbia estimated its tobacco related costs last year at more than $C430m (£215m, $370m, £315), and the federal health department estimated the national cost at $C4bn a year. The tobacco companies, which have a combined annual profit in Canada of about $C1.5bn, say judgments in these lawsuits could ultimately bankrupt them. And they claim that the big profit makers in tobacco are federal and provincial governments, which collected $C9bn in taxes on tobacco last year.

Don McCarty, vice president for law at Imperial Tobacco Canada, said in the CMAJ article, “BC [British Columbia] can expect long-winded and bad-tempered litigation. It could be the biggest case in the history of Canadian jurisprudence.”

Rob Cunningham, a senior policy analyst at the Canadian Cancer Society, said that Quebec already has two class action lawsuits certified (meaning that the cases must go ahead), claiming $C22.8bn in damages (BMJ 2005;330:499). Another suit, related to the claims of “light” cigarettes, has been certified in British Columbia (BMJ 2003;326:1418).

Some provinces are suing for $C9.6bn in lost tax revenue during the early 1990s, when untaxed contraband cigarettes entered the country (BMJ 2003;326:570). Quebec has already levied a court order against JTI-McDonald in the contraband case for $C1.4bn in unpaid taxes and interest, forcing the company into bankruptcy protection (BMJ 2004;329:420).