Tag: Canada

Creditors Approve Canadian Litigation Deal

Creditors have approved a proposed litigation settlement that would require three leading tobacco companies to pay billions to Canada’s provinces and territories, reports CBC.
The proposed CAD32.5-billion deal between JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada and their creditors was announced in October after more than five years of negotiations.
Representatives for the creditors, which include provincial governments seeking to recover smoking-related health-care costs as well as plaintiffs in two Quebec class-action lawsuits, voted on the plan in a virtual meeting Dec. 12.
The proposed settlement includes $24 billion for provinces and territories, $4 billion for tens of thousands of Quebec smokers and their heirs, and more than $2.5 billion for smokers in other provinces and territories. It also includes more than $1 billion for a foundation to help those affected by tobacco-related diseases.
If approved in court, the proposed deal would end more than a decade of litigation.
In 2015, a Quebec court ordered the three companies to pay about $15 billion in two class-action lawsuits involving smokers in the province who took up the habit between 1950 and 1998 and either fell ill or were addicted, or their heirs.
Four years later, the landmark ruling was upheld by the province’s Appeal Court. The companies then sought creditor protection in Ontario in order to negotiate a global settlement with their creditors.
All of the legal proceedings against them were put on hold during the talks. That order has now been extended until Jan. 31, 2025.
The court is scheduled to review the proposed settlement toward the end of January.
December 17, 2024
Canada’s Tobacco Deal not ‘Doomed’: Judge
An Ontario judge says any outstanding issues regarding a proposed $32.5 billion settlement between three major tobacco companies and their creditors should be solvable in the coming months. Ontario Superior Court Chief Justice Geoffrey Morawetz released his reasons for approving a motion last week to have creditors’ representatives review and vote on the proposal in December.
One of the companies, JTI-Macdonald Corp., said last week it objects to the plan in its current form and asked the court to postpone scheduling the vote until several issues were resolved. The other two companies, Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd., didn’t oppose the motion but said they retained the right to contest the proposed plan.
The proposal announced last month includes $24 billion for provinces and territories seeking to recover smoking-related healthcare costs and about $6 billion for smokers across Canada and their loved ones.
If a majority of creditors accept the proposed deal, it will move on to the next step: a hearing to obtain the court’s approval, tentatively scheduled for early next year. In a written decision released Monday, Morawetz said it was clear that not all issues had been resolved at this stage of the proceedings.
He pointed to “outstanding issues” between the companies regarding their respective shares of the total payout and debate over the creditor status of one of JTI-Macdonald’s affiliate companies. In order to have creditors vote on a proposal, the court must be satisfied the plan isn’t “doomed to fail” either at the creditors or court approval stages, court heard last week, media reports.
Lawyers representing plaintiffs in two Quebec class actions, those representing smokers in the rest of Canada, and 10 out of 13 provinces and territories have expressed their support for the proposal, the judge wrote in his ruling. While JTI-Macdonald said its concerns have not been addressed, the company’s lawyer “acknowledged that the issues were solvable,” Morawetz wrote.
“At this stage, I am unable to conclude that the plans are doomed to fail,” he said. “There are a number of outstanding issues as between the parties, but there are no issues that, in my view, cannot be solved.”
The proposed settlement is the culmination of more than five years of negotiations in what Morawetz has called one of “the most complex insolvency proceedings in Canadian history.”
November 7, 2024
Illicit Market Thriving After Flavor Ban: ITCAN

Image: Ahmed
One year after Quebec banned non-tobacco flavored vapes, most vapers are buying such products illegally in the province, according to Imperial Tobacco Canada (ITCAN).
In a survey carried out by Leger, 61 percent of vapers said that they purchased non-tobacco flavored vapor products in the past 12 months. Forty percent of those respondents said that they purchased an illegal flavored vapor product from a vape shop, and 33 percent of those respondents said they purchased flavored vapor products online. Forty-seven percent of those respondents said they knew it was illegal when they purchased a flavored vapor product
“If the government’s objective was to create an untaxed and unregulated vapor market, then well done and mission accomplished,” said ITCAN Vice President of Corporate and Regulatory Affairs Eric Gagnon in a statement.
ITCAN attributed the problem in part to weak enforcement. “A report from the Ministère de la Santé et des Services Sociaux (MSSS) website reveals that only 150 (38 percent of all vape shops) have been inspected by MSSS,” the company wrote. “Worse yet, very few fines have been issued with reports showing only 28 of those 150 received fines, even though more than 90 percent are uncompliant.”
ITCAN urged the government to train inspectors, issue fines heavy enough to deter illegal players and conduct an “enforcement blitz” to demonstrate the gravity of the situation, among other suggestions.
November 1, 2024
JTI Opposes Canada Settlement

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JTI-Macdonald Corp. opposes a proposed multi-billion-dollar settlement of long-running tobacco litigation announced earlier this month, reports Financial Post, citing a company filing made to an Ontario court.
As part of a court-appointed mediator’s plan, Canada’s three leading cigarette manufacturers would pay CAD32.5 billion ($23.6 billion) to provinces and territories and more than CAD4 billion to tens of thousands of Quebec smokers and their heirs.
Before it can be implemented, the proposed plan must be voted on by creditors, which include plaintiffs in two class-action lawsuits in Quebec as well as provincial governments seeking to recover smoking-related health costs. It must also be approved by the court.
In its court filing, JTI-Macdonald Corp. indicated it does not support the proposal due to “critical outstanding issues.”
November 1, 2024
Tobacco Industry Nears Settlement of Litigation

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Canada’s three leading cigarette manufacturers will pay CAD32.5 billion ($23.6 billion) to settle a long-running lawsuit as part of a court-appointed mediator’s proposed plan, Philip Morris International announced on Oct. 18.
In 2015, a Quebec court award damages to some 100,000 smokers and ex-smokers who alleged the companies failed to warn consumers about the health risks of smoking, which they had known about since the 1950s.
The verdict was upheld in 2019, forcing the Canadian subsidiaries of PMI, BAT and Japan Tobacco International to seek bankruptcy protection.
The subsidiaries have been under a court-supervised mediation process negotiating a possible settlement since then.
The allocation of the aggregate settlement amount between the tobacco giants remains unresolved, according to Philip Morris.
“Although important issues with the plan remain to be resolved, we are hopeful that this legal process will soon conclude, allowing RBH [Rothmans, Benson & Hedges] and its stakeholders to focus on the future,” said PMI CEO Jacek Olczak.
“Today marks an important step towards a potential settlement,” said Eric Gagnon, vice president, corporate and regulatory affairs for BAT’s Imperial Tobacco Canada subsidiary in a statement. “The plan resolves all Canadian tobacco litigation and provides a full and comprehensive release to Imperial, BAT and all related entities for all tobacco claims.”
The Lung Health Foundation (LHF), too, welcomed the prospect of a settlement. “This is a meaningful first step in acknowledging decades of harm,” noted LHF President and CEO Jessica Buckley in a statement. “But financial restitution can’t make up for the loss of life. It can’t make up for the experiences of Canadians who have suffered through lung cancer and COPD.”
Buckley called for the funds to be reinvested into vaping and smoking prevention and cessation support, mental health and addiction initiatives, and improved access to screening and care for conditions like lung cancer and COPD.”
October 19, 2024
Trade Group Speaks up for Vape Flavors

Photo: DD Images
The Canadian Vaping Association (CVA) has expressed concern over recent attempts by tobacco control lobbyists to convince the government to ban vape flavors nationwide. According to the trade group, such a ban would have negative public health consequences and undermine Canada’s goal of reducing smoking rates to less than 5 percent by 2035.
“We must acknowledge and not ignore that more than 1.5 million adult vapors in Canada use flavored vaping products to stop smoking,” the CVA wrote in a statement.
“We agree underage youth should not vape; however, more needs to be done through education and providing the necessary tools for parents, teachers, coaches and community members to understand the underlying issues as to why youth are vaping and providing solutions to solve their nicotine dependence.”
According to the CVA, Canada already has some of the best vape regulations globally, covering labeling, packaging, marketing, promotions, reporting and nicotine concentration limits. The group also urged the tobacco control lobbyist to consider the risks of the illicit market.
“The bullying tactics of anti-harm reduction lobbyists pressuring Minister Saks and Health Canada to act quickly will only help grow the black market of vaping products,” the CVA wrote. “This will make vaping more accessible to youth at much lower prices and greater risk to their health.”
October 8, 2024
Canada to Crack Down on Pouches

Photo: JHVEPhoto
Nicotine pouches may be sold in Canada only by individuals working under the supervision of a pharmacist, under a new ministerial order targeting “new and emerging” nicotine-replacement therapies (NRTs). Sellers will also be required to store nicotine pouches behind the pharmacy counter.
In addition, the new rules prohibit youth-appealing advertising or promotion and sales of nicotine pouches with flavors other than mint or menthol.
Manufacturers will be required to print a front-of-package nicotine addiction warning as well as a clear indication of the intended use as a smoking cessation aid for adults trying to quit smoking. They must also submit mock-ups of labels and packages for all new or amended NRT licenses to ensure no youth appeal.
The new restrictions will take force Aug. 28, 2024, though there will be a six-month transition period for the provisions on advertising and labeling. Established smoking cessation aids, such as nicotine gums, lozenges, sprays and inhalers, will continue to be available in a wide range of retail locations, with a variety of flavors.
“Stronger measures are needed to protect youth from the harmful effects of nicotine and stop dependency before it starts,” said Minister of Health Mark Holland in a statement. “The action our government is taking will keep these products available for adults who need them to quit smoking while making sure they don’t get into the hands of youth for recreational use.”
Public health advocates welcomed Health Canada’s announcement. “These new measures put an end to the easy access young people have had to a very addictive substance,” said Rob Cunningham, senior policy analyst with the Canadian Cancer Society, in a statement. “These restrictions will help protect youth from tobacco industry marketing and from nicotine addiction. We must avoid a repeat of the experience that has seen a dramatic increase in youth vaping.”
Imperial Tobacco Canada (ITCAN), which makes the popular Zonnic nicotine pouches, warned that the ministerial order would derail efforts to reduce smoking rates.
“The Minister of Health is making smoking cessation products more difficult to buy for adults who smoke and who want to quit,” said ITCAN Vice President of Corporate and Regulatory Affairs Eric Gagnon in a statement. “It goes against all logic for a country that wants to reduce smoking rates to target products that actually help people quit.”
According to ITCAN, Zonnic is quickly becoming the leading smoking cessation aid product in locations where it’s sold. The company claims to have received testimonials suggesting that consumers have stopped or reduced smoking by using Zonnic.
Canada regulates NRTs as drugs under the Food and Drugs Act. All NRTs must be approved by Health Canada and carry an approved health claim to be legally sold in Canada. Health Canada authorized sales of Zonnic in October 2023.
August 26, 2024
‘Carcinogens Among Permitted Additives’

Photo: New Africa
Canada’s proposed list of permitted vapor product additives includes dangerous ingredients, according to Imperial Tobacco Canada (ITCAN).
“To put it bluntly, the list contains at least one known substance that could cause cancer,” said ITCAN Vice President, Corporate and Regulatory Affairs Eric Gagnon in a statement.
According to ITCAN, several ingredients on the flavor ban proposal list of permitted ingredients are substances that its parent company, British American Tobacco, categorically avoids in its vaping products.
The company says BAT’s toxicological risk assessment prevents the use of substances classified as having carcinogenic, mutagenic or reprotoxic (CMR) properties, as per the Globally Harmonized System for classification and labelling of substances.
“It is shocking that the government would include a proven and classified CMR substance in its lists of permitted additives for vaping products,” ITCAN wrote on its website. “The effect of a regulation that formally permits such ingredients is simply an encouragement to manufacturers—particularly smaller producers with limited access to scientific literature—to use an inherently unsafe substance in a product that is designed to be inhaled into the lungs.”
Gagnon cited isophorone as an example. “This substance is classified by the European Union as cancer-causing and acutely toxic. It is also banned by Canadian food and drug regulations from use in human cosmetics,” he said.
“We encourage Health Canada to reconsider the list and consult with experts to determine the best way forward.”
June 14, 2024
Health Canada Recalls Zyn Pouches

Image: Swedish Match/ HstrongART
Health Canada recalled eight types of Zyn nicotine pouches on June 12, saying they were sold without market authorization, reports Global News.
They affected variants are flavored apple mint, bellini, black cherry, citrus, cool mint, espresso, original and spearmint. The pouches had 1.5 or three milligrams of nicotine in them.
Philip Morris International, which manufactures Zyn products, said it does not sell in Canada and applauds Health Canada for taking action.
“The products at issue are being sold by unauthorized parties,” a spokesperson for PMI’s Rothmans Benson & Hedges affiliate was quoted as saying by the Global News.
“RBH works with law enforcement to stop illicit trade and we are supportive of government efforts on this front.”
Health Canada has approved only one nicotine pouch for sale—Imperial Tobacco Canada’s Zonnic brand.
The introduction of nicotine pouches in Canada has run into opposition from health activists.
Experts say these products are appealing to children, who face the risk of becoming addicted to nicotine.
In March, Health Minister Mark Holland said that he was “seeking authority” to restrict such products “so they are solely for the purposes of cessation.”

June 14, 2024
Revenant Rule

Image: MarijaBazarova
Canada’s new health minister is breathing new life into a 2021 proposal to ban vape flavors nationwide.
By Stefanie Rossel
Thomas Kirsop
There’s life in the old dog yet: In March 2024, Canada relaunched a three-year-old plan to ban all vape flavors except tobacco, mint and menthol. The regulations were first published in June 2021 in the Canada Gazette, signaling the government’s intention to implement the flavor ban within six months after the obligatory public consultation. But the rule that was supposed to launch in January 2022 never came, and Canada’s health authorities never mentioned the flavor ban again—until Health Minister Mark Holland, in office since July last year, recently revived the idea.
Outrage about the proposed ban among vapers, consumer advocacy groups and the vape industry was as huge in 2021 as it is now: Canada’s planned rule goes further than most flavor bans, which tend to prohibit only certain “characterizing flavors” or flavor descriptors. Under the Canadian proposal, all sweeteners in vaping products would be prohibited, and vape manufacturers would be allowed to create their liquids using only approved ingredients.
They would have to select from a list of 82 approved compounds, 40 of which can be used to impart a tobacco flavor and 42 of which can be used to impart flavor of mint, menthol or a combination of the two. “Menthol tobacco” or a “mint tobacco” are off limits under the rules.
“Should the flavor ban be adopted as it was written in 2021, Canadian users of vaping products will see the removal of nearly all existing flavor profiles in the legitimate vaping products market within 180 days of publication of the proposed order and regulation from 2021,” says Thomas Kirsop, managing director of Canada’s Vaping Industry Trade Association (VITA).
“The only two products on the market that would not require removal or reformulation would be ‘unflavored’ liquids and unadulterated ‘menthol.’ All existing ‘tobacco’-flavored vaping products would need to be removed from the market, reformulated to remove sweeteners and flavoring compounds not on the permitted constituents list and then reintroduced to the Canadian market.”
The proposed rule would also prescribe “sensory attributes standards,” which are defined only vaguely, stipulating, for example, that a vaping product or its emissions should not have “sensory attributes that result in a sensory perception other than one that is typical of tobacco or mint/menthol,” thus limiting manufacturers’ ability to make vape products that have “a highly pleasant smell or taste.”
“Sensory attributes regulations are referenced over 40 times in the proposal, but there is no specific section explaining how these regulations would be drafted, implemented or enforced in a clear manner,” says Kirsop. The VITA interprets this part of the planned regulation as meaning that manufacturers can make their liquids using the 82 permitted compounds, and at some time in the future, the government will pay a third party to smell, taste and possibly vape this product. “If that third party thinks that the liquid does not align with the permitted flavor profiles or is ‘too palatable,’ then that formulation will be prohibited regardless of its adherence to all the objective standards in legislation,” says Kirsop.
Relapse to Combustibles Expected
The impact of such a regulation on Canada’s 1.5 million vapers would be dramatic, according to Kirsop. His organization anticipates a major relapse to combustible cigarettes among consumers. “The number of cigarettes consumed per capita will increase,” he says. “It is well understood that vaping products and combustible products are economic substitutes in the nicotine market. A regulatory impact on one will result in an inverse reaction of the other.”
Kirsop refers to a 2023 study by Abigail Friedman that investigated the effects of e-cigarette flavor restrictions on tobacco product sales in the U.S. and found that while the flavor restriction did impact vaping rates in the manner intended, the impact on legitimate cigarette sales was substantial, with 12 extra cigarettes sold in the legitimate market for every 0.7 mL pod not sold due to a flavor ban. The VITA has similarly calculated that a nationwide flavor ban in Canada would result in additional cigarette sales of almost 4 billion sticks per year.
For the country’s independent vape manufacturers and estimated 1,800 specialty vaping product shops, such a measure would have a significant, possibly existential, impact, according to Kirsop. “It is the variety of flavored vaping products that make a specialty store economically viable,” he says. The illicit market, by contrast, would receive a boost, especially if the flavor ban comes on top of the 12 percent federal vape product tax hike planned for July.
“From any historical reference point, the removal of a product with significant consumer demand from the legitimate market will result in that demand being met by the illicit market,” says Kirsop. “Our investigations lead us to believe that the black market will expand quite rapidly to fill the void. Our only question is whether that illicit trade will favor small players, producing flavored liquids in garages and basements, if it will follow the Australian model, with organized crime groups importing flavored disposable vaping products from overseas, or if it will be some hybrid combination of both.”
There are plenty of cautionary examples close to home. Six of Canada’s 13 provinces and territories have already restricted the sales of e-cigarettes to tobacco-flavored varieties. “In Nova Scotia, over 40 percent of specialty vape stores closed immediately following the flavor ban, and when VITA commissioned an investigations company to survey the market, we found significant illicit trade and a consumer outlook that supported that illicit trade,” says Kirsop. “News reports showed that in the year after the flavor ban, tobacco excise collection increased 13.6 percent. We also identified that consumers are starting to adapt by adding their own third-party commercial flavoring products to vaping liquids.”
Goal Missed
Maria Papaioannoy
Kirsop says it’s too early to determine the impact of flavor bans on youth usage. However, the VITA has found no data that differentiate Nova Scotia, which was the first province to ban flavored vaping products, from provinces that kept them on the market or banned them at a later date. “Nova Scotia shows youth past-30-day vaping behavior has dropped from 25.1 percent to 23 percent since their flavor ban,” says Kirsop. “However, all provinces except Quebec saw youth vaping rates drop in the same category during that time frame, and some of them did significantly better. Alberta saw youth use drop from 19.9 [percent] to 14.8 percent, British Columbia 27.6 [percent] to 16 percent, Manitoba 21.5 [percent] to 16.7 percent and Saskatchewan 29.6 [percent] to 23.7 percent. All the latter have no bans on flavors.”
So, while the intended impact on adolescents remains questionable, the effect on adults would be devastating, according to Maria Papaioannoy of Rights4Vapers. “Flavors are a critical part of what makes vaping such an effective alternative to cigarettes,” she wrote in a letter to Prime Minister Justin Trudeau. “If a person who smokes decides to move to vaping, they do not want to be reminded of the taste of tobacco.” A ban on flavors as proposed, she argues, would mean a prohibition of the entire category through the back door. “Who would pay for an unpalatable product?”
In 2021, Rights4Vapers started a letter-writing campaign, resulting in more than 20,000 Canadians submitting arguments to Health Canada against the proposed regulation. Papaioannoy has organized a similar campaign now. To date, the government has received more than 27,000 letters from adult consumers raising concerns over this ban. In mid-March, Papaioannoy spoke at Health Canada’s stakeholder meeting but left disillusioned. “Consumers had a huge voice in vaping regulation with previous health ministers,” she says. “In this call, all I felt from Health Canada representatives was sympathy, not compassion.”
Like many, Papaioannoy believes that the proposed flavor prohibition is not so much an action of bureaucracy but a mandate being driven by Holland, who formerly worked for the nongovernmental organization Heart and Stroke, a known opponent of vaping.
Both tobacco harm reduction activists hope that as lawmakers debate the measure, reason will prevail. “The wild card is the minister of health,” says Kirsop. “Generally, one would think that policy decisions that could impact millions of Canadian smokers and 1.5 million adult Canadian users of vaping products would be based on scientific data and academic literature and not driven by emotional talking points and flag waving.
“This minister has demonstrated that he has no grounding in literature or the science, and it does not appear at this point that he cares much for it if it does not align with his ideology or that of his former peer group. Ideology forms a very poor starting point for public health decisions.”
Papaioannoy is more optimistic, noting that the proposal still has to go through the Treasury Board of Canada, with the time frame between proposing and enacting being long and opposition strong against a measure that would affect small businesses. “Besides, I believe in the institution,” she says. “Someone from the government will raise the flag.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

June 1, 2024