October 5, 2009 / 5:49 PM / in 8 years

Quebec plans suit vs. tobacco companies: report

OTTAWA (Reuters) - The Canadian province of Quebec plans to file a lawsuit against tobacco companies to seek damages for the cost of treating tobacco-related diseases.

Quebec would become the fourth of Canada’s 10 provinces to sue the country’s tobacco manufacturers, which are units of foreign tobacco makers, including Philip Morris International Inc, British American Tobacco and Japan Tobacco Inc.

Just last week the neighboring province of Ontario announced a C$50 billion ($46.7 billion) suit against Big Tobacco.

A spokesman for Imperial Tobacco Canada Ltd, Canada’s leading tobacco company and a wholly owned unit of British American Tobacco, said the latest lawsuit is a hypocritical reaction from a government that licenses the industry.

“The government in Canada, including the government of Quebec, is a senior partner of this for many decades -- they have been for more than 50 years -- and they have been aware of the risks associated with tobacco for more than 50 years,” spokesman Eric Gagnon said.

“It’s sheer hypocrisy by the government of Quebec when we know that (they) ... are the ones issuing licenses to sell the tobacco product. They are the ones legislating the industry,” he said.

Provincial Health Minister Yves Bolduc said Quebec, which has a smaller population than Ontario, could seek an amount that is proportionate to the C$50 billion Ontario lawsuit, according to a report on Monday by French-language public broadcaster Radio-Canada.

Radio-Canada -- which said Quebec would formally file the suit in January -- calculated the amount the province would seek at around C$30 billion.

“Our claim is that information was hidden and this led people to continue to use tobacco products. This had consequences, such as enormous health-care costs that we had to bear,” Bolduc said.

He put the annual cost of Quebec’s tobacco-related healthcare spending at C$700 million to C$1 billion.

A lawyer at the Canadian Cancer Society said the move by Quebec is not unexpected, and represents building momentum among Canada’s provincial governments to recoup the costs of treating tobacco-related illness.

“Now to have the three largest provinces -- Ontario, Quebec and British Columbia -- as well as New Brunswick, and likely others, going ahead -- it is significant,” said Rob Cunningham, senior policy analyst at the anti-tobacco group.

“I think the question is not whether the provinces are going to collect but how much they’ll collect. It’s going to take a number of years but the encouraging thing is they have begun the process,” he added.

Imperial Tobacco’s Gagnon said the companies would not settle out of court, and an outcome would not come quickly.

“This is going to be very long,” Gagnon said, noting the case in British Columbia has been going for nine years. A trial date in that case has been set for 2011.

Historically, Quebec has had a smoking rate above the national average but the prevalence of tobacco use has fallen dramatically across the country over the past 40 years.

About 18 percent of Canadians over the age of 14 smoked in 2008, down from 50 percent in 1965, according to the Canadian Cancer Society. Quebec’s smoking rate was 19 percent in 2008.

The amount of damages sought by the lawsuit will depend on how far back damages are claimed, and on projections of healthcare costs as the post-war generation ages and tobacco-related disease sets in, Cunningham said.

“We can anticipate that there are considerable healthcare costs that have yet to be incurred,” he said.

While the details of Quebec’s lawsuit are not yet known, Ontario is seeking damages from tobacco companies for healthcare costs incurred by taxpayers since 1955.

The lawsuits by the provinces come after most passed legislation that allows them to directly seek damages for past and ongoing healthcare costs.

After years of battling lawsuits, Big Tobacco agreed in 1998 to pay U.S. states more than $200 billion to help fund the costs of treating ailing smokers.

($1=$1.07 Canadian)

Reporting by Andrea Hopkins in Toronto and David Ljunggren in Ottawa; editing by Peter Galloway

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