Monday, November 1, 2010

Smoking, greedy governments and hypocritical lawsuits

Alberta's Justice Minister, Alison Redford, recently announced that the provincial government would be filing a lawsuit against the tobacco industry.

Similar lawsuits have been filed in three other provinces; British Columbia, Ontario and New Brunswick. The statements of claim seek to have the tobacco industry compensate the governments of those provinces for the alleged health care costs incurred for treatment of smoking related illness.

Les Hagen, executive director of Alberta's incarnation of Action on Smoking and Health, believes that's a fantastic idea. "This industry has really been getting away with murder for decades and it's time for them to be held accountable for an enormous impact on our quality of life."

The governments involved and anti-smoker zealots like Mr. Hagen, are obviously looking for a settlement similar to the US Master Settlement Agreement (MSA). In that case, state governments in the US agreed to a $245 billion settlement with the tobacco companies, to be paid over 25 years.

The gimmick was that the settlement cost the tobacco companies nothing. It allowed the tobacco companies to pass the costs on to consumers, in fact creating a hidden tax on tobacco which was collected by the companies and then passed on to state governments.

In simpler terms, it was a con job. The government could pass off the settlement as a major rebuke of the tobacco industry and make it look like they were really taking care of the tobacco “epidemic,” but . . .

The tobacco companies continued selling their product and raking in their profits, state and federal governments continued to collect their punitive tobacco taxes, the anti-smoker zealots got their cut of the action and the only ones to take a real hit were tobacco consumers.

It's expected that all ten Canadian provinces will eventually join those which have already filed lawsuits. The costs to the tobacco companies, if any of these lawsuits are successful, could be well in excess of a hundred billion dollars; more than enough to bankrupt all three of Canada's major tobacco companies.

To put those numbers in perspective, Canada's three major tobacco companies earn an estimated one billion dollars a year in profits. That means, over the past ten years, they've made roughly ten billion dollars in profits. There's simply no way that the tobacco companies could afford to stay in business and pay the enormous amounts being demanded by the provinces.

And, according to Physicians for a Smoke-Free Canada, provincial and federal tax revenues over the past ten years were approximately $ 61.8 billion, roughly 6 times the profits made by the tobacco companies. It's highly questionable whether the provinces and the feds are prepared to give up that kind of steady income by sending the tobacco companies into receivership.

So, unless the provinces are intentionally setting out to bankrupt the industry, the only plausible objective of these lawsuits is to emulate the smoke and mirrors con game perpetrated by state governments in the US with the Master Settlement Agreement.

Les Hagen intimates at such a scenario when he notes: "At some point when this hits a critical mass or tipping point, the industry will probably come forward with some proposals which may or may not be acceptable to provinces." Uh-huh.

And, here's a little more food for thought; something that's seldom, if ever, noted in the mainstream media.

If the tobacco companies were earning a profit of one billion dollars a year, they would have earned a maximum of $60 billion since 1950. But, there's no evidence the industry was making that much money until recently, even during the 50's, 60's and 70's when smoking prevalence was at its highest.

Which means government has likely generated more tax revenue ($61.8 billion) from the sale of tobacco products in the last 10 years than the tobacco companies have earned in profit in the past 60.

According to Health Canada, smoking “kills” 37,000 Canadians a year. The government's response to this alleged slaughter? The stigmatization of smokers through smoking bans in bars, restaurants and other “public” places, hiding tobacco displays from public view and the implementation of punitive, ever increasing tobacco taxes.

Combined federal and provincial tax revenue for the 2007/2008 fiscal year were just under $7 billion dollars (excluding sales taxes). That means the government extorted roughly $190,000 from smokers for every Canadian who was allegedly “killed” by smoking. And, now they're demanding that the tobacco companies cough up even more money.

Can you spell h-y-p-o-c-r-i-t-e-s?

Update – Previous Post:
Philipina Schergevitch, the octogenarian who was turfed from her Calgary home when the seniors complex she was living in went “smoke free”, has found other accommodation. Her family apparently found suitable housing elsewhere for the 88 year old smoker.

The Bishop O'Byrne Housing for Seniors Association deserves a kick in the ass for their despicable treatment of this elderly woman. And hardly a peep in protest from the main stream media. Disgusting.

1 comment:

Anonymous said...

The smokers' group Forest has urged the Government to cut public spending on tobacco control quangos and other anti-smoking groups to stop 'government lobbying itself'.

A report commissioned by Forest claims that the UK tobacco control industry receives the vast majority of its funding from public money.

Much of this money is then used to influence government to spend more public money on tobacco control measures, Forest claims.

Forest director Simon Clark said: ‘Eric Pickles, the Secretary of State for Communities and Local Government, has pledged to stop local authorities and quangos employing external consultants to assist with their lobbying activities.

‘If the Government is to be consistent it should stop funding tobacco control quangos and anti-smoking groups such as ASH who shamelessly use
public money to lobby government.’

The Forest Report: