Details have emerged on a historic settlement proposal that could see Canada’s three major tobacco companies — JTI-Macdonald Corp., Rothmans, Benson & Hedges, and Imperial Tobacco Canada Ltd. — pay billions of dollars to provincial and territorial governments, as well as compensation to smokers and their families.
The companies, which have been under creditor protection since 2019, are working towards a comprehensive settlement after Quebec’s highest court upheld a $15 billion ruling against them in two major class-action lawsuits. The settlement aims to resolve numerous lawsuits brought forward by provinces, territories, and affected individuals seeking compensation for smoking-related health-care costs and personal injuries.
Breakdown of the Settlement Proposal
The proposed plan of arrangement, filed in court on Thursday, lays out financial commitments totaling over $31 billion:
- $25 billion for provincial and territorial governments to help cover the health-care costs associated with smoking-related illnesses.
- More than $4 billion for members of the Quebec class-action lawsuits who were previously awarded compensation.
- Over $2.5 billion for smokers diagnosed with lung cancer, throat cancer, or chronic obstructive pulmonary disease (COPD) between March 2015 and March 2019 in other provinces and territories.
Approval Process and Next Steps
The settlement proposal, which was developed through mediation, still needs the approval of creditors and the court before it can be enacted. Lawyers representing Quebec plaintiffs and those advocating on behalf of provincial and territorial governments are set to provide more information on the deal at separate media briefings today.
If approved, the settlement would mark one of the largest payouts ever in Canadian history, bringing closure to years of litigation and attempts by governments to recoup the enormous costs of treating smoking-related illnesses. Legal proceedings against the companies were previously put on hold in 2019 to allow the parties to work towards this global resolution.
The agreement comes after years of legal battles and negotiations, with provincial and territorial governments seeking compensation for the massive health-care expenditures linked to smoking-related diseases. The proposed payout is intended to offset some of these costs and support ongoing health initiatives to combat tobacco use.