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Take Big Tobacco’s money and help people quit smoking
This article was originally published in The Financial Post.
The priority is getting people to quit, whether they give up nicotine entirely or switch to delivery forms that are much less risky
Canada’s three major cigarette producers have offered $32.5 billion to settle suits brought against them by provincial governments and smokers. The plaintiffs should take the money.
Big Tobacco has a history of being bad tobacco, so more punishment may always seem fairer than less. But let’s not lose sight of what should be our ultimate goal: getting smokers to quit combustibles, whether or not they then switch to lower-risk ways of getting their nicotine fix. Viewing the settlement solely as a punishment for Big Tobacco’s past behaviour can divert us from good public health policy.
The $32.5 billion is a drop in the ocean of government revenue from cigarette sales. Taxes account for 70 per cent of the price of a cigarette and bring in about $10 billion a year. Since claims were first launched against Big Tobacco in the 1990s, approximately $250 billion has been paid in taxes. Tax rates are so high because cigarettes kill people prematurely and cause enormous health damage. The high tax is both deterrent and compensation for health spending.
Arguing about whether a quarter trillion dollars is sufficient penalty is a fool’s errand. In the U.S. the “Master Settlement” 25 years ago was for US$250 billion, this in an economy 10 times ours where existing tobacco taxes were miniscule. It amounted to an additional 25 cents on every pack of cigarettes sold — in today’s dollars 50 cents.
During their past five years of operating in receivership Canada’s Big Three have been forced to accumulate a war chest. There is no doubt they will survive this agreement as corporate entities: if not, they would shut down and let governments and gangs supply cigarettes — with the attendant revenue loss to governments.
Incantations that $32 billion isn’t enough do nothing for public health. Over the past few decades, the voices now being raised against the proposed settlement encouraged wildly unrealistic provincial claims against producers — up to $500 billion — which those making them argued international parent companies should pay. How futile was that? Japan Tobacco, one of the accused, is one-third owned by the Japanese government. In effect, Canada’s virtue squad was proposing the Japanese government pay for the health of Canadians, leaving less funding for its own citizens. The total market capitalization of the major international producers is well below $500 billion. Our provincial governments and attorneys-general knew full well that their claims would never be met — though that did not prevent them from telling the electorate otherwise.
Putting public health front and centre: smokers need to get off cigarettes and we need to downsize the illegal market, which is currently responsible for about 30 per cent of sales. Lest anyone forget: the illegal sector will pay none of this settlement.
Like cannabis and alcohol, nicotine should be regulated but tolerated. We should not bend to puritans who, while enjoying their daily glass of Pinot Grigio in the Glebe, clamour for nicotine’s abolition. Nicotine is dependence-forming, yes, but is very unlikely to kill if consumed without combustion. Though 20 per cent of Swedes use nicotine only five per cent smoke. Sweden has the lowest rates of lung cancer and tobacco-related deaths in Europe — by a large margin.
Nicotine is consumed disproportionately by the poor, the LGBTQ+ community and those with mental health problems. People in prison have staggering smoking rates. Nicotine has cognitive and calming benefits for these groups, and they should not be denied access to low-risk products containing it.
Big Tobacco has said it aims to switch over completely to low-risk products such as pouches, heated tobacco and e-cigarettes. That’s consistent with what should be our public policy priority: encouraging a switch away from combustibles without denying users either their right to nicotine or their agency to control their health and needs.
Information is critical, and this is where government policy is failing abjectly. Just a sliver of the population knows that non-combustibles involve a fraction of the risk of cigarettes. Our frequently hysterical federal health minister, Mark Holland, has relegated the safest of the non-combustibles (i.e., pouches) to “behind-the-counter” status in pharmacies, while leaving cigarettes in every corner store in the country. If Big Tobacco truly wants out of combustibles, we should help it walk the walk as well as talk the talk.
But obfuscation is the game several interest groups want to play. Canadians — smokers and non- smokers alike — need to know what Public Health England has been telling us for a decade about non-combustibles: They carry at most five per cent of the risk associated with cigarettes.
If Big Tobacco can become Big Nicotine, we might eventually come to regard it as we do alcohol and cannabis corporations, which also produce tolerated sin goods. Maybe even more favourably. After all, alcohol and smoked cannabis are carcinogens, non-combusted nicotine is not.
