Three tobacco giants are offering to pay nearly 25 billion to the provinces and territories and more than 4 billion to some 100,000 Quebec smokers and their loved ones as part of a corporate restructuring process triggered by a long legal battle.
Posted at 7:28 p.m.
Paola Loriggio
The Canadian Press
The companies – JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. – filed a proposed plan of arrangement in an Ontario court on Thursday after more than five years of negotiations with their creditors.
The companies filed for creditor protection in Ontario in early 2019 after losing an appeal in a landmark court battle in Quebec.
The Ontario court has suspended all legal proceedings against the companies while they attempt to reach an agreement with their creditors, who include the plaintiffs in two class actions in Quebec as well as provincial governments seeking to recoup the costs of care health related to smoking.
Under the proposed plan, tabled Thursday, provinces and territories would receive payments over time, with about $6 billion due upon implementation of the agreement.
The Quebec plaintiffs are reportedly filing claims for compensation of up to $100,000 each.
The proposed plan also includes more than $2.5 billion for smokers in other provinces and territories who were diagnosed with lung cancer, throat cancer or chronic obstructive pulmonary disease between March 2015 and March 2019.
Bruce W. Johnston, one of the Quebec plaintiffs’ lawyers, said the proposal is “historic and unprecedented” because it allows for compensation for smokers as well as governments.
“When we took this case, no plaintiff had received a single penny from a tobacco company,” he said Thursday.
“We took this case in 1998 and, thanks to our case, not only will tens of thousands of victims be compensated by the tobacco industry in Canada, most in Quebec, but the governments will also share 24 billion. »
The plaintiffs have suffered lengthy delays and can now finally see that there is “probably a light at the end of the tunnel and that they will receive compensation”, he added.
Although many class-action members died before they could receive money from the companies, their successors – and, in some cases, their successors’ successors – will be entitled to compensation, he added. .
The companies would also contribute more than $1 billion to a foundation to fight tobacco-related illnesses.
The proposal still needs to clear several steps before it can be implemented, including a vote by creditors and court approval.
Negotiations between the companies and their creditors were confidential, and several health care groups argued that the lack of transparency surrounding the talks would benefit the companies at the expense of other stakeholders.
Just last month, three groups – Action on Smoking & Health, Physicians for a Smoke-Free Canada and the Quebec Coalition for Tobacco Control – said recent court filings suggested the provinces had agreed to a process that would give companies veto power over the final deal.
The groups have consistently urged provinces to impose regulations and tobacco reduction measures as part of an agreement with businesses.
The lawsuits filed in Quebec concerned smokers who started smoking between 1950 and 1998 and who became ill or became addicted. The heirs of these smokers were also part of the lawsuits.
Court filings last year suggest that hundreds of class action members have died since creditor protection proceedings began.
