N.B. to get $614M in 'historic' tobacco settlement after decades-long battle
Part of $32.5B agreement between provinces and tobacco giants for health-care costs related to smoking
New Brunswick will receive an estimated $614 million from three tobacco giants for health-care costs related to smoking, with about $147 million "up front" and the remainder "over time," Health Minister Dr. John Dornan announced Friday.
It's part of a $32.5-billion settlement between Canadian provinces and territories and the tobacco companies — JTI-Macdonald Corp., Imperial Tobacco Canada Ltd., and Rothmans, Benson & Hedges in a legal battle that dates back decades.
Ontario Superior Court Chief Justice Geoffrey Morawetz approved the agreement in a ruling released Thursday, calling it a "momentous achievement in Canadian restructuring history."
Smokers, former smokers or their representatives living in Canada will also be able to seek individual compensation through Tobacco Claims Canada.
"I am pleased to announce a resolution of our effort to recover money for our health-care system from the tobacco companies that have sold cigarettes in Canada," Dornan said in a statement.
The province was instrumental in launching the litigation nearly 20 years ago, he said.
No information about how the province intends to use the money was provided.
Health Department officials did not immediately respond to a request for details, but spokesperson Tara Chislett did confirm to CBC News an undisclosed amount of New Brunswick's settlement will have to go toward legal fees.
She was unable to provide specific timelines.
"As the plans were only approved by the Superior Court yesterday, government is reviewing the resolution and next steps," Chislett said in an email. "At this time, the potential amount, exact timing and accounting treatment remain uncertain.
"It is anticipated the first payment will be made during the next fiscal year (2025-2026) and legal fees will be deducted from this payment."
'Nowhere near enough'
Melanie Langille, president and CEO of NB Lung, is disappointed with the settlement. She contends the funding is "nowhere near enough to cover the true cost of tobacco-related disease and addiction in Canada."
New Brunswick's tobacco-related costs are $165 million annually, she said in an interview.
"Over decades, tobacco-related costs to Canada are in the hundreds of billions, which is why the initial claim was asking for a $500-billion settlement, to help offset the cost of tobacco-related harm, and introduce programs to address the health and addictions consequences of tobacco."
Given New Brunswick's "higher-than-average smoking rates and the significant financial burden of tobacco-related health-care costs, the settlement funds, while beneficial, are insufficient to fully address the extensive damage caused by tobacco use in New Brunswick," Langille said.
She urges the provincial government to direct its settlement dollars toward "high-impact programs that address both the health and addiction consequences of tobacco."
She cited as examples expanding lung-cancer-screening programs, investing in early COPD (chronic obstructive pulmonary disease) diagnosis and treatment, strengthening of youth tobacco and nicotine prevention initiatives, and supporting smoking cessation programs.
Decrease in smoking rates
According to the Department of Health, adult smoking rates in New Brunswick have dropped to 13 per cent from 26 per cent in 2000.
Youth smoking rates have also declined to 6.6 per cent from 14 per cent in 2018-19.
The province's goal is to reach zero per cent.
Details of settlement
All provincial and territorial governments, as well as the plaintiffs in two Quebec class-action lawsuits, unanimously voted in December to accept the settlement plan proposed by a court-appointed mediator.
Under the agreement, the companies will pay more than $24 billion to provinces and territories over about two decades, while plaintiffs in the two class-action lawsuits will get a combined total of more than $4 billion. Individuals can receive up to $100,000 for throat or lung cancer and up to $30,000 for emphysema if they were diagnosed before March 12, 2012, and were still alive as of Nov. 20, 1998, according to the Quebec Council on Tobacco and Health.
Another $2.5 billion will go to compensate Canadian smokers not included in the lawsuits. These individuals may receive up to $60,000 if they were diagnosed between March 8, 2015, and March 8, 2019, the Quebec organization said.
In addition, $1 billion will go toward creating a charitable foundation dedicated to funding programs aimed at combating tobacco-related diseases.