B.C. premier urges tobacco giants to accept proposed $32.5B settlement after creditors approve plan

The British Columbia government is urging tobacco companies to accept the terms of a proposed $32.5-billion settlement with Canadian provinces and territories, as well as individual smokers.

The call comes after the plan was approved by the companies' creditors Thursday.

B.C. Premier David Eby, whose province initiated legal action against the three tobacco companies in 1998, said the deal is "a critical step forward after 20 years of litigation."

"Tobacco has harmed far too many people, and tobacco companies have avoided accountability for far too long," Eby said in a statement.

"We urge tobacco companies to take responsibility for their deceptive actions and accept this plan."

WATCH | The numbers behind the proposed deal: 

Tobacco giants would pay out $32.5B in 'historic' proposed deal

2 months ago

Duration 5:05

Three tobacco giants face the prospect of paying close to $25 billion to provinces and territories and more than $4 billion to tens of thousands of Quebec smokers and their loved ones as part of a corporate restructuring process triggered by a long-running legal battle. Correction note: A previous version of this story said the three tobacco companies proposed the settlement. In fact, the proposal is the result of a court-appointed mediation process.

The proposed $32.5-billion global settlement between the companies — JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. — and their creditors was announced in October after more than five years of negotiations.

B.C. would received approximately $3.5 billion under the plan, which it says it would invest in cancer treatment and care, as well as efforts to stop people from smoking.

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 Thursday afternoon.

André Lespérance, who represents plaintiffs in one of the Quebec lawsuits, said creditors overwhelmingly supported the proposal.

"We're not surprised, but we're glad the creditors are united right now to see this plan approved," he said in French.

Before the plan can be implemented, it must obtain the approval of the court. A hearing has been scheduled for the end of January, and Lespérance said he's optimistic the proposed deal will clear that hurdle as well.

"I think we're really close to the end," he said.

Dominique Claveau, executive director of the Quebec Council on Tobacco and Health, which is part of the lawsuit, said he looks forward to having the court "bring this long-fought battle for justice and truth to its conclusion."

The proposed deal 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.

At least one of the companies has said it opposes the plan in its current form.

The Canadian Cancer Society, which is a social stakeholder in the case, said Thursday it hopes the proposal will be amended before it's approved by the court.

WATCH | Canadian Cancer Society says current proposal not enough: 

Proposed tobacco deal 'inadequate,' Canadian Cancer Society analyst says

2 months ago

Duration 1:37

Rob Cunningham, a senior policy analyst with the Canadian Cancer Society, says his organization approves of the supports for individuals outlined in the proposed deal — but he said the settlement needs to do more to reduce smoking.

Rob Cunningham, the organization's lawyer, said the plan should include smoking-reduction measures and the release of confidential industry documents, similar to what was achieved in the United States decades ago.

"There's a once-in-a-lifetime opportunity to better control the tobacco industry and to reduce tobacco use. We're never going to get this chance again," he said.

The foundation funded through the proposed deal should also have its mandate expanded to include prevention of tobacco-related disease and public awareness efforts to help people quit smoking, said Manuel Arango, vice-president of policy and advocacy for the Heart and Stroke Foundation.

"We already have a lot of studies and a lot of knowledge about the treatment of tobacco-related disease," he said. "So it's really about looking forward and helping prevent tobacco-related disease in the future."

The proposal is the culmination of a corporate restructuring process set off by a decades-long legal battle over the health effects of smoking.

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.

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.