Ontario files $50 billion suit versus tobacco companies

Tue Sep 29, 2009 3:25pm EDT
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By Andrea Hopkins

TORONTO (Reuters) - The Canadian province of Ontario said on Tuesday it has filed a lawsuit seeking C$50 billion ($45.9 billion) in damages from tobacco companies for healthcare costs incurred by taxpayers since 1955.

In doing so, Ontario became the third of Canada's 10 provinces to sue the country's tobacco manufacturers, all of which are units of foreign tobacco makers, including Philip Morris International Inc, British American Tobacco and Japan Tobacco Inc.

The lawsuit by Ontario, Canada's most populous province, was planned under legislation passed by its legislature earlier this year, and seeks damages for past and ongoing healthcare costs.

Ontario says tobacco use costs the province C$1.6 billion a year for healthcare and causes about 13,000 deaths annually. It said smoking is the province's No. 1 cause of illness and premature death.

The legislation allows Ontario to directly sue tobacco companies for alleged wrongdoing and allocates liability among tobacco companies by market share.

A spokesman for Imperial Tobacco Canada Ltd, Canada's leading tobacco company and a wholly owned unit of British American Tobacco, said the Ontario lawsuit made no sense, given that the product is legal, regulated and taxed by the government.

"It's a little bit hypocritical to sue the legal tobacco manufacturers when the governments have been a partner of the industry for many decades now," spokesman Eric Gagnon said.

"They are the ones that legislate the industry. We operate, we do a legal product. (They also) collect billions of dollars in taxes, so to turn around today and sue the legal industry makes no sense whatsoever," Gagnon said.   Continued...

<p>An extinguished cigarette is pictured in an ashtray in a bar in downtown Zurich September 28, 2008. REUTERS/Christian Hartmann</p>