Tag: Canada

Critics Lambast Canada’s Flavor Ban

Photo: Deyan
Health advocates and vapor industry groups criticized Canada’s proposal to ban all flavored vaping products except for tobacco, mint and menthol. Published June 19 in the Canada Gazette, the draft legislation was criticized for falling short by tobacco control advocates and for going too far by the Canadian Vaping Industry Association (CVA).
The CVA warned that if the flavor ban is implemented, it may push hundreds of thousands of consumers back to smoking or to the black market. “There is mounting evidence that flavors reduce cravings and increase smoking cessation success,” the organization wrote in a press note. “Research from Yale School of Public Health finds that smokers that quit using a flavored product are 2.5 times more likely to be successful.”
“We have repeatedly shared the science on vaping,” said Darryl Tempest, executive director of the CVA. “Regulators are aware of the important role flavors play in the adoption of vaping by smokers. A flavor ban will reduce the appeal of the product and will sentence many smokers to their death. There is sufficient data from regions with flavor bans to provide a clear understanding of the consequences. Flavor bans do little to protect youth and instead increase smoking rates and strengthen the black market.”

A flavor ban will reduce the appeal of the product and will sentence many smokers to their death.
Darryl Tempest, executive director, CVA
ASH Canada, by contrast, described the decision to exempt mint and menthol from the flavor ban as an unacceptable concession to the vaping industry.
“The proposed regulations will not adequately protect Canadian youth from flavored vaping products” said Les Hagen, executive director of ASH, in a statement. “Menthol is the second most popular flavor among youth vapers. A partial ban on flavored vaping products in the U.S. resulted in massive switching to menthol flavored products. We expect a similar result in Canada if these regulations are approved.”
“There is no scientific justification for exempting menthol vaping products,” says Flory Doucas, co-director and spokesperson for the Quebec Coalition for Tobacco Control. “Menthol is the second most popular flavor among youth, tied with mango. We know that flavors are one of the main factors that attract young people to vaping, causing all kinds of health risks in addition to being one of the most addictive substances on the planet.”
The health groups decried the influence of the vaping industry on the debate. The CVA has been the most active of all lobbies on Parliament Hill in May, wrote ASH, citing The Lobby Monitor.
Over 400,000 Canadian youth are using vaping products, according to Health Canada’s latest survey conducted in 2019.
Stakeholders can comment on Canada’s draft flavor regulations until Sept. 2, 2021.
Health Canada is also publishing new restrictions on the nicotine concentration in vapor products. These regulations set a maximum nicotine concentration of 20 mg per mL in vaping products to make them less appealing to youth. The regulations also prohibit the packaging and sale of vaping products if the nicotine concentration of the products exceeds this limit. Manufacturers must adhere to this limit by July 8, 2021; retailers may not sell products that exceed this limit after July 23, 2021.
June 21, 2021
Researchers Urge Refresh of Warnings

Image: ITCPEP
While Canada’s plain tobacco packaging laws substantially reduced pack appeal, they have not made smokers take greater notice of the pictorial health warnings, according to a new report published by the International Tobacco Control Policy Evaluation Project (ITCPEP).
Canada introduced plain packaging in 2019 as part of a comprehensive suite of policies to help reduce tobacco use to 5 percent by 2035.
The regulations apply to packaging for all tobacco products, including manufactured cigarettes, roll-your-own products, cigars, pipe tobacco, smokeless tobacco and heated-tobacco products.
Vapor products are not covered under these regulations because they are not classified as tobacco products under the Canada’s Tobacco and Vaping Products Act.
In 2001, Canada became the first country to require graphic health warnings on cigarette packs. The images are periodically refreshed. The most recent switch of pictures took place eight years ago.
The ITCPEP survey showed that the share of smokers who did not like the look of their cigarette pack after the implementation of plain packaging in Canada increased from 29 percent in 2018 to 45 percent in 2020.
However, there was no significant change in the percentage of smokers who said they usually notice warning labels first when looking at a cigarette pack (35 percent in 2018 versus 36 percent in 2020).
Based on their findings, the report’s authors recommend refreshing Canada’s eight-year-old pictorial health warnings to address wear-out of health warning salience and effectiveness
As of July 2020, plain packaging has been fully implemented in 14 countries: Australia (2012); France and the United Kingdom (2017); New Zealand, Norway and Ireland (2018); Uruguay and Thailand (2019); Saudi Arabia, Turkey, Israel and Slovenia (January 2020); Canada (February 2020); and Singapore (July 2020).
By January 2022, Belgium, Hungary and the Netherlands will have fully implemented plain packaging.
April 6, 2021
Canada Calls for Lower Nicotine Concentrations

Photo: Souleyephoto from Pixabay
Health Canada wants to lower the nicotine limits for e-cigarettes to 20 mg/ml. The current limit is 66 mg/ml.
Minister of Health Patty Hajdu announced a public consultation on Dec. 18, inviting Canadians to share their thoughts on the proposal by March. 4
According to the government, the proposed changes build on existing measures to address the rise in youth vaping, including extensive public education campaigns and banning the advertising of vaping products in public spaces if the ads can be seen or heard by youth.
Health Canada is also considering to further restrict flavors in vaping products. It wants to require the vapor industry to provide more information about its products, including on sales, ingredients and research and development activities.
“Our work to protect Canadians from the harms of vaping products continues. These changes will help reduce the appeal of vaping products to youth,” said Hajdu in a statement.
The Canadian Cancer Society (CCS) welcomed the plans. “The proposed regulations requiring a maximum nicotine concentration for vaping products of 20 mg/mL are essential to reduce youth vaping and deserve strong support,” said CCS Senior Policy Analyst Rob Cunningham.
The Canadian Vaping Association (CVA) urged the government to balance youth protection with adult harm reduction. “It is without question that Canada must act to restrict nicotine concentrations to protect youth, but it should not be an all-or-nothing approach,” the association wrote in a press note.
“Ontario has restricted high nicotine products to age-restricted environments, effectively eliminating all retail access points for youth. This policy has proven effective in mitigating youth use while balancing the needs of adult smokers. The CVA encourages the government of Canada to adopt this policy federally,” said Darryl Tempest, executive director of the CVA.
December 21, 2020
Medicago to Supply Covid-19 Vaccine

Photo: Arek Socha from Pixabay
Medicago, a biopharmaceutical company headquartered in Quebec City, Canada, has reached an agreement with Public Services and Procurement Canada to supply up to 76 million doses of its vaccine candidate for Covid-19, subject to Health Canada approval.
Innovation, Science & Economic Development, another department of the Canadian federal government, will contribute CAD173 million ($131 million) to Medicago to support its ongoing vaccine development and clinical trials, and for the construction of its Quebec City manufacturing facility.
Since 2008, Philip Morris Investments B.V. (PMIBV), a subsidiary of Philip Morris International (PMI), has been a shareholder of Medicago (in which it currently holds an approximately one-third equity stake) and has supported Medicago’s innovative plant-derived research and development focused on vaccines.
The investment is consistent with PMI’s own efforts to leverage science and innovation. Japan-based Mitsubishi Tanabe Pharma Corporation (MTPC) is the majority shareholder and PMIBV’s partner in Medicago. Among other things, PMIBV and MTPC will contribute additional funding to support Medicago’s efforts to develop a Covid-19 vaccine candidate.
“We welcome the collaboration announced between two departments of the Canadian government and Medicago to accelerate its efforts against Covid-19,” said PMI CEO André Calantzopoulos in a statement.
“Better outcomes can be achieved when governments and companies join efforts to promote shared objectives for the greater good. We are pleased to be able to support Medicago’s work to develop, substantiate, manufacture, and make available a Covid-19 vaccine candidate. We all hope they will be successful.”
Medicago began Phase 1 testing on volunteers on July 14 and is anticipating that Phase 2 trials will begin in early November 2020. If Phase 2 trials are successful, Phase 3 trials are expected to begin in December 2020.
October 24, 2020
Creditor protection granted
Philip Morris International’s Canadian subsidiary, Rothmans, Benson & Hedges (RBH) has obtained an initial order from the Ontario Superior Court of Justice granting it protection under the Companies’ Creditors Arrangement Act (CCAA).
In a note posted on its website, PMI said that RBH had said that obtaining creditor protection became necessary following recent developments in two class action proceedings in Québec against RBH, Imperial Tobacco Canada, and JTI-Macdonald.
PMI listed the key elements and impact of RBH’s decision to file for protection:
- ‘The initial order includes a comprehensive stay of all tobacco-related litigation pending in Canada against RBH and PMI, thus providing an efficient forum for RBH to seek resolution of all such litigation.
- ‘The CCAA process allows RBH to carry on its business in the ordinary course with minimal disruption to its customers, suppliers and employees.
- ‘As a result of the filing, and under US GAAP, PMI will deconsolidate RBH from its financial statements, resulting in an estimated one-time non-cash charge of approximately $0.10 per share, as described below.
- ‘While it remains under creditor protection, RBH does not anticipate paying dividends. As RBH has not paid dividends since the trial court’s judgment in May 2015, the deconsolidation will not have an impact on PMI’s current annualized dividend rate.’
PMI said that, as a result of the deconsolidation of RBH, PMI was revising its full-year 2019 reported diluted earnings per share forecast to be at least $4.90 at prevailing exchange rates. This full-year guidance, it said, reflected:
- ‘The current estimated one-time net impact of the deconsolidation of RBH under US GAAP of approximately $0.10 per share, to be recorded in the first quarter of 2019, which is a non-cash item, plus the tobacco litigation-related charge of approximately $0.09 per share announced on March 4, 2019; and
- ‘The exclusion of RBH’s previously anticipated earnings from PMI’s consolidated financial statements from the date of deconsolidation to December 31, 2019, of approximately $0.28 per share.’
March 25, 2019
Seeking a grand settlement
British American Tobacco’s Canadian subsidiary, Imperial Tobacco Canada (ITCAN) has obtained an Initial Order from the Ontario Superior Court of Justice granting it protection under the Companies’ Creditors Arrangement Act (CCAA). This has the effect of staying all current tobacco litigation in Canada against ITCAN and other Group companies.
‘ITCAN’s decision to file for protection under the CCAA follows the Quebec Court of Appeal judgment holding the industry jointly and severally liable for a maximum of C$13.6 billion, and the recent decision by one of the other Canadian tobacco companies, JTI-Macdonald, to seek, and subsequently obtain, CCAA protection,’ BAT said in a note posted on its website yesterday. ‘If ITCAN had not also obtained court protection, it could have been required to pay for all or part of JTI-Macdonald’s share of the Quebec judgment, in addition to its own.’
ITCAN’s share of the judgment was said by BAT to be a ‘maximum of approximately C$9.2 billion.
Meanwhile, BAT said that, across Canada, other tobacco plaintiffs and provincial governments were collectively seeking significant damages that substantially exceeded ITCAN’s assets. ‘In seeking protection under the CCAA, ITCAN will look to resolve not only the Quebec case but also all other tobacco litigation in Canada under an efficient and court supervised process, while continuing to trade in the normal course,’ BAT said.
‘It will remain business as usual for ITCAN, its employees, customers and suppliers, and during the CCAA process, ITCAN’s management will continue to focus on growing its current cigarette and potentially reduced risk products business.
‘The Group will continue to consolidate the results of ITCAN, in line with IFRS 10 “Consolidated Financial Statements”, and ITCAN’s CCAA filing will not negatively affect the Group’s adjusted net debt to adjusted EBITDA ratio.
‘The £2.3 billion of goodwill relating to ITCAN on the Group’s balance sheet at 31 December 2018 will continue to be reviewed on a regular basis. Any future impairment charge would result in a non-cash charge to the income statement that will be treated as an adjusting item.
‘Since 2014 the Group has received no dividends from ITCAN and expects that this situation will continue whilst ITCAN remains under CCAA protection. Notwithstanding this, there will be no impact on the BAT Group’s dividend payments or policy.’
A BAT spokesperson was quoted as saying that ITCAN disagreed with the Court’s judgment. “However, we understand that CCAA protection will provide Imperial Tobacco Canada an opportunity to settle all of its outstanding tobacco litigation under an efficient and court supervised process whilst continuing to run its business in the normal course,” the spokesperson said.
March 13, 2019
Creditor protection granted
The Canadian tobacco manufacturer JTIMacdonald Corp has been granted protection from its creditors following a March 1 court judgement under which it is liable for an award that exceeds its capacity to pay.
In a note posted on Japan Tobacco Inc’s website on Saturday, the company said that, as announced previously, the Quebec Court of Appeal had dismissed an appeal by JTIMacdonald Corp. (JTI-MC), a member of the JT Group, and other Canadian tobacco manufacturers of a lower court decision in the two class action lawsuits heard together in Montreal.
‘JTI-MC filed for protection from its creditors under the Companies’ Creditors Arrangement Act (CCAA) on March 8, 2019, local time,’ the note said. ‘This filing followed the Quebec Court of Appeal’s judgment on March 1, 2019, local time, making JTI-MC liable for up to C$1.77 billion, of which it is required to pay C$145 million as an initial deposit.
‘As the amount of the award exceeds JTI-MC’s capacity to pay, JTI-MC has decided to seek protection from its creditors under the CCAA so as to continue its business operations. The Ontario Superior Court has granted the CCAA application and extended protection in favor of JTI-MC. Whilst all of the proceedings pending against it are now stayed, JTI-MC intends to continue to proceed with an appeal to the Supreme Court of Canada.
‘JTI-MC filed for protection as it considers doing so to be the best possible option for JTI-MC. It enables JTI-MC to carry on business in the ordinary course.
‘JTI-MC is the only JT Group company that is party to these proceedings and the financial impact of JTI-MC’s protection under the CCAA is currently under review. If any material impact on JT Group’s consolidated financials is identified, JT will announce it in a timely manner.’
March 11, 2019
Accounting for judgment
British American Tobacco has said that a provision of about £436 million will be charged to the Group’s consolidated income statement in 2019 following an appeals-court judgment in two class action lawsuits in Quebec, Canada.
In a statement posted on its website, BAT said the Quebec Court of Appeal in Montreal, in a judgment made public on Friday, had upheld a trial court’s decision of May 2015 in respect of two Quebec class action lawsuits against its subsidiary, Imperial Tobacco Canada (ITCAN) and two other Canadian tobacco companies. As part of that decision, the defendants were required to deposit about C$1.1 billion into a court escrow account.
‘As part of the 2015 decision, ITCAN was required to place C$758 million (approximately £436 million) in escrow – the final payment of which was made in 2017,’ the note said. ‘This deposit was held as an asset on the Group’s balance sheet at the year-end (31 December 2018).
‘Following the 1 March 2019 judgment, the Board of Directors of ITCAN have reassessed the recoverability of the deposit and have determined that the asset’s recoverability is, under IFRS, less than virtually certain. ‘Consequently, a provision of approximately £436 million will be charged to the Group’s consolidated income statement in 2019. This will be treated as an adjusting expense.
‘There will be no impact from this charge to the ratio of adjusted net debt to adjusted EBITDA, with this decision having no impact to cash flow in 2019.
‘The Board of Directors of ITCAN and the Group are monitoring developments. As previously stated, ITCAN intends to seek leave to appeal this judgment to the Supreme Court of Canada.
‘British American Tobacco p.l.c. was not a party to the proceeding and is not a party to the judgment.’
March 5, 2019
Proceeding with caution
Philip Morris International has revised its full-year 2019 reported diluted earnings per share forecast following the publication of a Canadian appeals-court judgment in respect of two class-actions in Quebec.
In a statement posted on its website, PMI said that on March 1, 2019, the Court of Appeal of Québec in Montreal had issued its judgment in two class action lawsuits against Rothmans, Benson & Hedges (RBH), a subsidiary of PMI, as well as Imperial Tobacco Canada (a British American Tobacco subsidiary), and JTI-Macdonald. PMI was not a party to the cases.
‘In 2015, the trial court ruled in favor of plaintiffs and found that the estimated class members’ damages totaled approximately C$15.6 billion including interest,’ the statement said. ‘In its decision, the Court of Appeal largely affirmed the total amount of compensatory and punitive damages including the trial court’s order for the defendants to deposit a portion of the damages, approximately C$1.1 billion, into trust accounts within 60 days. RBH’s share of the deposit is approximately C$257 million. RBH previously deposited C$226 million as security with the Court of Appeal. RBH will seek leave to appeal this judgment to the Supreme Court of Canada…
‘As a result of this decision against RBH, PMI will incur in its consolidated results a pre-tax charge of approximately $194 million, representing approximately $142 million net of tax, in the first quarter of 2019, recorded as tobacco litigation-related expenses. The charge reflects PMI’s assessment of the portion of the judgment that it believes is probable and estimable at this time and corresponds to the trust account deposit required by the court.
‘The company is monitoring developments in these proceedings and further assessing the situation, as there is a significant lack of clarity with respect to several factors, including the actual number of claimants, the associated administrative process for verification of their applications, further proceedings, and actions by parties to these proceedings. Therefore, the ultimate liability may differ significantly from this amount.
‘As a result of this charge, PMI today revises its full-year 2019 reported diluted earnings per share forecast to be at least $5.28 at the exchange rates prevailing at the time of PMI’s earnings release of February 7, 2019. Excluding the impact of this charge of approximately $0.09 per share and an unfavorable currency impact, at the then prevailing exchange rates, of approximately $0.14 per share, this forecast represents a projected increase of at least 8.0 percent versus adjusted diluted earnings per share of $5.10 in 2018 (calculated as reported diluted EPS of $5.08, plus tax items of $0.02 per share primarily related to the implementation of the Tax Cuts and Jobs Act).’
March 5, 2019
Billion-dollar award upheld
Quebec’s Court of Appeal has upheld a Quebec Superior Court ruling that awarded billions of dollars in damages to 100,000 people as part of two class-action lawsuits against tobacco companies, according to a CBC – Canadian Broadcasting Corporation – News story.
In the 422-page ruling, the court said the Superior Court’s decision was correct, except for some small technicalities. The adjustment in damages amounts to about C$2 million of the approximate C$15 billion the companies were ordered to pay, the prosecution said on Friday.
“It’s excellent news for the victims that have been waiting for this day for a long time,” said Philippe Trudel, one of the lawyers representing the smokers.
“We are calling this a total victory on all fronts.”
The prosecution estimates the damages the companies will eventually pay out to the smokers will amount to more than C$17 billion. Interest on the damages continues to accrue as the case moves through the court system.
The CBC story said that, in 2015, a Quebec Superior Court justice ruled in favour of two groups representing Quebec smokers, which argued the companies didn’t warn their customers about the dangers of smoking.
Imperial Tobacco, a subsidiary of British American Tobacco, Rothmans Benson & Hedges, a subsidiary of Philip Morris International, and JTI-Macdonald, were ordered to pay for punitive and moral damages. The companies appealed the decision in 2016.
In a Saturday, website announcement of the appeal court’s decision, Japan Tobacco Inc. said the court had substantively upheld the decision of the Superior Court, finding JTI-MC liable for C$1.77 billion.
‘JTI-MC is currently reviewing the judgement and is considering all options, including asking for permission to appeal the decision to the Supreme Court of Canada,’ the announcement said.
‘The decision follows an appeal by JTI-MC and other Canadian tobacco manufacturers to a judgment released in June 2015 by the Quebec Superior Court. JTI-MC was ordered to pay about C$2 billion in the judgment.
‘JTI-MC is the only JT Group company that is a party to these proceedings.
‘JT will issue a statement concerning JTI-MC’s response to the decision once it has had an opportunity to review the judgment in detail.’
Meanwhile, a spokesperson for BAT said that the company was extremely disappointed that the Quebec Court of Appeal had not overturned the trial court’s judgment against its Canadian subsidiary, Imperial Tobacco Canada.
“We are still of the view that this decision is wrong – ignoring the reality that both adult consumers and government have known about the risk associated with smoking for decades, the spokesperson was quoted as saying, as part of a note posted on BAT’s website. “As a result, we believe it should be overturned.
“Imperial Tobacco Canada Ltd. needs to review the court’s decision in more detail and will decide on next steps over the coming days and weeks. Given the significance of the judgment, they have said that they fully intend to appeal the decision to the Supreme Court of Canada.”
BAT said that, following the release of the judgment from the Quebec Court of Appeal, the plaintiffs had requested immediate release of the funds on deposit, which was refused. They had then filed a formal motion to release the funds. Imperial Tobacco Canada Ltd. filed a motion to prevent the release of the funds in question.
‘British American Tobacco was not a party to the proceeding and is not a party to the judgment, only its Canadian subsidiary, Imperial Tobacco Canada Ltd,’ BAT said.
The CBC story said that Rothmans, Benson & Hedges had confirmed in a statement that it would seek leave to appeal the ruling with the Supreme Court of Canada.
March 4, 2019