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CMAJ • September 16, 2003; 169 (6)
© 2003 Canadian Medical Association or its licensors

NEWS
NOUVELLES

$1.5 billion at stake as tobacco smuggling lawsuit relaunched

Louise Gagnon

Ottawa

The federal government is relaunching a legal battle to reclaim $1.5 billion in taxes it lost to cigarette smuggling. In a lawsuit filed Aug. 12, the government alleged that more than 10 tobacco companies had conspired to make illegal profits via smuggling.

In the early 1990s cigarette smuggling was rampant in Canada because of the introduction of high taxes designed to cut consumption. The federal government responded with significant cuts in excise taxes that made the crime less lucrative. The RCMP have called the smuggling operation the largest case of corporate fraud in Canadian history.

The government's decision to pursue the case came after the Coalition Against Tobacco Tax Evasion, a group of nonsmokers' rights activists and medical officers of health from across the country, challenged it to launch a lawsuit before time ran out.

Ottawa had launched a suit in the US in late 1999 against RJR-Macdonald Inc. (now JTI-Macdonald Corp.) and its sister companies, but it was thrown out in November 2002 on a technicality. A new suit had to be filed by the end of August if the government was to pursue the case.

"These tobacco taxes were an important public health measure that was undermined by the tobacco companies," complains Dr. Brent Friesen, a member of the coalition and president of the Alberta Medical Association's Section of Community Health Physicians. "It's appropriate for governments to pursue those revenues. It sends a powerful message to ... boards of directors that they will be held accountable for their actions."

Before the lawsuit was filed, the coalition launched a letter campaign and was preparing a newspaper advertisement complaining about government inaction.

David Sweanor, legal counsel for the Non-Smokers' Rights Association, said it was important that the lawsuit be pursued.

"At a time when governments are cutting back on disease prevention, it's very difficult to see them walk away from what could be billions of dollars in compensation for what the [tobacco] industry did."

In an Aug. 13 statement, JTI-Macdonald Corp. said "these worn-out allegations are being pumped up by an overzealous antitobacco lobby" whose existence depends on "attacking the Canadian tobacco industry." — Louise Gagnon, Ottawa





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