Ontario v. Tobacco Set to Battle

The Ontario government has now joined Britich Columbia and New Brunswick, becoming the third province to sue the major tobacco industries. The $50 billion lawsuit was launched in an effort to recoup expenditures on health care related to smoking dating as far back as 1955. Both sides have legitimate claims and it will be interesting to watch this case unfold in the next few years.

It is reasonable to speculate that this Ontario's logic in this scenario was if the United States can do it so can we. In 1998 the tobacco industry agreed to pay the United States $246 billion over 25 years in order to help with the health care costs associated with smoking. B.C. was the first province to file a suit in Canada and was joined later by New Brunswick. The governments main argument is that since 1955 Ontario can attribute $50 billion in health care costs to smoking and that tobacco related health care currently costs the government $1.6 billion annually. The consensus is that other provinces will follow the example put forth by B.C., New Brunswick and Ontario and that it will result in a class action suit. Micheal Perley, director of the Ontario Campaign for Action on Tobacco, has said that all the resources of the country will be needed if there is to be any success as the tobacco industry will inevitably fight this with all their resources.

The tobacco industry has clearly said that they won't take this lying down. They are calling this lawsuit by the government a "hypocrisy" because the Ontario government is a "senior partner" in the industry. This claim is based off the fact that the government already makes revenue on taxes placed on the tobacco industry. In fact, in the fiscal year 2009 the Ontario government is set to receive 41 billion in tax revenue off cigarettes. Furthermore, the industry widened its claim by saying that the lawsuit was an attempt to appear to be acting on health care issues to its constituents. The tobacco industry wants the government to take action on the "real issue" of contraband cigarettes in Ontario. The contraband industry in Ontario is among the world's highest and amounts for %50 of all cigarette sales within the province.

So the facts are in and the issue will be left to the courts to decide. In all reality, the tobacco industry set a dangerous precedant when it agreed to pay the $246 billion in the United States. That number could be even higher in Canada when you consider the Canadian health care system is much more involved than that of the United States. The tobacco industry will have to rely on its claim that governemnt is a "senior partner" through taxation if they plan to avoid further health care related payments. If the provinces band together and succeed, the industry may face pressure from alot more countries in similar positions and if they fail, then Canadians can watch more of their tax money spent towards another losing cause.