Feature Article

Canada's Supreme Court handed a unanimous victory to the provincial government of British Columbia, allowing the province to sue cigarette makers to recover billions in smoking-related healthcare costs.

The Supreme Court upheld provincial legislation authorizing the government to seek damages for health-care costs dating back 50 years as well as future expenses stemming from illnesses resulting from tobacco use.

At issue was whether British Columbia's Tobacco Damages and Health Care Costs Recovery Act ran afoul of the Canadian Constitution.  “The Act is constitutionally valid,” the Court concluded, dismissing the industry challenge and opening the door for similar actions in other provinces.  The Act, passed in 2001, authorizes direct legal action by the province to recover healthcare costs from leading tobacco companies resulting from “tobacco-related wrongs.”

Already, similar legislation has been introduced in Nova Scotia, and New Brunswick, Ontario and Manitoba have also indicated they are considering lawsuits.  The ruling makes Canada only the second country (after the United States) in which the government can sue the tobacco industry to recover smoking-related healthcare costs.  In the United States, similar lawsuits by state governments resulted in the massive Master Settlement Agreement between 46 states (including Ohio ) and the tobacco industry.  More information about the MSA is available here.

Experts suggest that British Columbia's lawsuit, which is now able to proceed, will seek to recover approximately $8.6 billion ($10 billion Canadian).  Canada's cigarette producers have vowed, in the words of one spokesperson, that they will fight the lawsuit for “years and years and years.”