Three major tobacco companies — JTI-Macdonald Corp., Rothmans, Benson & Hedges, and Imperial Tobacco Canada Ltd. — are poised to pay nearly $25 billion to provinces and territories, and over $4 billion to Quebec smokers and their families, as part of a corporate restructuring process. This settlement follows a lengthy legal battle dating back decades.
The proposed arrangement was filed in an Ontario court after five years of negotiations. It comes after the companies sought creditor protection in 2019, following their loss in a landmark Quebec case. The legal process was paused as they worked on a settlement with creditors, including Quebec class-action plaintiffs and provincial governments seeking compensation for smoking-related healthcare costs.
The plan proposes payments over time, with around $6 billion to be distributed when the deal is finalized. Quebec plaintiffs, who sued the companies for the health impacts of smoking, could claim up to $100,000 each. Additionally, more than $2.5 billion is earmarked for smokers diagnosed with lung or throat cancer and chronic obstructive pulmonary disease between 2015 and 2019 across other provinces.
Bruce W. Johnston, a lawyer for the Quebec plaintiffs, hailed the settlement as “historic and unprecedented,” emphasizing its significance in compensating both individual victims and governments. “This case will result in tens of thousands of victims being compensated, particularly in Quebec, along with the provincial governments sharing in a $24 billion payout,” he said.
Though many class-action members have passed away during the lengthy legal proceedings, their heirs will still be eligible for compensation. The plan also includes a $1 billion contribution from the companies to fund a foundation dedicated to combating tobacco-related diseases.
While the deal marks a monumental step toward resolution, some groups, like the Canadian Cancer Society, are advocating for the inclusion of tobacco control measures and the public disclosure of internal company documents as part of the settlement. Critics have also expressed concerns over the transparency of the negotiations and the influence of tobacco companies over the final terms.
The settlement must now pass several stages, including creditor approval and court endorsement, before it can be finalized.
This case represents one of the most significant tobacco-related settlements globally, second only to the U.S. deal reached in the 1990s. However, some stakeholders believe more policy measures should be integrated to further curb tobacco use.
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