Thursday, 26 November 2015

Important Progress in France and Quebec

Two important advances were made this week in tobacco control laws in key members of La Francophonie.

On Wednesday, the French parliament adopted a law to require plain packaging of cigarettes, becoming the fourth country to put this measure into law (after Australia, Ireland and the United Kingdom).

And this Thursday morning, the Quebec legislature gave unanimous consent to Bill 44, An Act to bolster tobacco control, which contains a number of regulations that raise the bar for public health.

The bill brings controls on smoking in Quebec up to the level currently in place in other provinces (no smoking in cars with children present, or on certain outdoor public places, like patios or near doorways of public spaces).

It also imposes new regulatory restrictions on cigarette marketing, including:
* a ban on flavours, including menthol (to come into force 6 months after Assent)
* an end to bonuses or other incentives paid by manufacturers to retailers
* a minimum size for warnings, which will have the effect of removing from the market smaller packages for slim cigarettes. (The reduction in warning size for these packages is shown below)

One of the most encouraging aspects of the Quebec bill is the breadth of support that it received in the National Assembly, whose members further strengthened the law that was proposed by the Minister of Health, Mme. Lucie Charlebois.

A special shout-out is warranted for the Minister, for her opposition counterpart, Mr. Jean François Lisée, and for our colleagues in the Quebec health community who encouraged their efforts.

Sunday, 18 October 2015

E-Cigarettes: BAT seeks to infuence a federally abandoned regulatory field

Although e-cigarettes are more and more frequently seen on Canadian streets, from a policy-setting point of view, they seem to have dropped from view.
  • None of the political parties addressed them during the current election campaign.
  • None of the health groups included them in their requests to parties (at least among those that are public or known to me).
  • There was virtually no media coverage during the election period.
  • And certainly the Minister of Health and Health Canada were entirely mute on what they thought should be done. As they have been for more than six years. 
A policy void that has lasted 6 years - even in defiance of parliamentary directives. 

The sale of electronic cigarettes which contain nicotine is not legal in Canada. This was made clear by the government in an advisory issued in March 2009.

Whether or not this is a good policy is a question of debate, although the debate in Canada has been less vigorous and more civil than in other quarters. (Our own position in favour of tying increased e-cigarette use to decreasing use of combustibles was forwarded earlier this year.)

Provincial governments grew antsy with the lack of federal action, and pushed the Minister of Health for action during their annual meeting in the autumn of 2014. Her response was to punt the issue to a parliamentary committee for review.

The Standing Committee of the House of Commons began its review with an appearance by Health Canada officials almost exactly a year ago. Their appearance was a masterful display of the skill of saying nothing. Sadly, the much greater talents of the individuals involved in developing solid regulatory responses to health threats was not allowed to be shown. Another example of the muzzling of scientists, perhaps.

On March 10th, the Standing Committee on Health presented its report Vaping: toward a regulatory framework for cigarettes, and requested that the government respond to its 14 recommendations within the 120 days as required by the House Standing Orders.
109.  Within 120 days of the presentation of a report from a standing or special committee, the government shall, upon the request of the committee, table a comprehensive response thereto, and when such a response has been requested, no motion for the concurrence in the report may be proposed until the comprehensive response has been tabled or the expiration of the said period of 120 days.
The deadline set by this requirement was after the House had risen for the summer and the current parliament had effectively been dissolved. Nonetheless, the parliamentary requirement for a response was valid, and the Ministry should have tabled a response on July 21st, the date set for 'adjournment tabling.'

Health Canada officials would almost certainly have prepared a response for this date, as the decision to act in contempt of a parliamentary requirement is (hopefully) not one that would be taken lightly within government departments.

Nonetheless, the government's response to the committee's strong desire for regulations was never tabled.

We will never know what the department's recommendations were. The views of the department are considered "advice to the minister" and will not be available to the public. The recommendations of Health Canada's policy experts are thus still literally a state secret.

A policy void that has lead to a vibrant illegal market

There are three large markets for illegal inhalable products in Canada:
  1. the market for illegal cigarettes (BAT estimates that 1 in 5 cigarettes sold in Canada is on the black market). These generally are not visible in formal retail environments, but are sold under the counter or through informal channels
  2. the marijuana market, which has recently surfaced at a retail level in British Columbia.
  3. the e-cigarette market, which is supplied through informal and formal retailers, including public retail fronts. Established convenience stores and other retail chains have generally not participated.  

The open marketing of marijuana and e-cigarettes is made possible by enforcement decisions of Health Canada and others to effectively turn a blind eye. Letters may be sent. Threats may be made. But no one shuts the storefronts down.

A policy void that is not in tobacco industry's interests

All of the multinational tobacco companies are scrambling to develop next generation products. In their view, there is no one e-cigarette, but rather a suite of innovations and "next generation products".  BAT has provided a most illuminating review of its understanding of e-cigarettes as one part of a new product portfolio in a recent investor presentations its marketing strategy.

The Canadian market for "next generation products" is blocked for companies which want to be seen to be operating within the law and which need large (legal) distribution and marketing channels.

For this, they need Health Canada to legitimize (instead of ignore) the e-cigarette market.

A policy void that has attracted TI interest

Not surprising, then, that one of their operational objectives is to be the ones who define the new regulatory framework. Or, as they put it to investors "lead the formalisation of NGPs (next generation products)".

Fore-warned,  hopefully, is fore-armed.

Tuesday, 13 October 2015

Election 2015: The Party Platforms on Tobacco

Of the forty-two generation elections that have been held in Canada, tobacco has rarely been included among the electoral commitments of the political parties who vie for voter support.

The 2015 federal election, which will culminate in a vote on Monday October 19, is a notable exception.* Of the 3 leading national parties, two have made specific commitments to implement tobacco control policies in their official platforms.

The Liberal Party of Canada (LPC) was the first platform released (on October 5). In it, the party said it "will introduce plain packaging requirements for tobacco products, similar to those in Australia and the United Kingdom." (Liberal Platform, page 21)

Later that week, on October 9th, the two other parties released theirs:
  • The Conservative Party of Canada (CPC) made no mention of tobacco or smoking. (Conservative Platform)
  • The New Democratic Party (NDP) committed to "implementing plain packaging of tobacco products" and to increased expenditures on reducing smoking by $10 million per year. (NDP Platform, pages 4 and 64).
Neither of the two prominent minor parties - the Green Party and the Bloc Quebecois - made reference to tobacco in their campaign literature.

Additional commitments had been sought of the three main parties by two civil society groups prior to the release of the platform.  Among these were requests for the party to:
  • "endorse the development of a made-for-Canada plan to end tobacco use"
  • "support a comprehensive review to examine ways to enhance and modernize Canada's federal tobacco control legislation and strategy"
  • "support a substantial increase in Health Canada's tobacco control budget" possibly by using a license fee.
  •  "support federal legislation to ban flavours including menthol in tobacco products..
The Conservative Party did not respond to either request.

The Liberal Party said it supported a target of less than 5% smoking prevalence by 2035. It reaffirmed its commitment to plain packaging, said it would examine ways to enhance and modernize tobacco controls laws. It made no commitment to additional funding, but said it would review the approach of a license fee as part of a renewal process. It expressed support for provincial laws which ban menthol, but cautioned that a review of whether further action was needed would be required before changes to federal law would be implemented.

The NDP did not agree to an endgame, but said it would "implement measures to markedly reduce tobacco use across the country." It did agree to a comprehensive review and a consultations towards a "dynamic" new federal strategy. It made a specific commitment to $10 million per year funding, and said it would consider a license fee. It agreed to plain packaging and to continue its previous position of banning menthol in cigarettes.

* In September 2008, the Conservative Party promised to ban flavouring in tobacco. The Cracking down on tobacco marketing aimed at Youth Act", passed in 2009 after their election victory, was the fulfillment of that promise.

Friday, 7 August 2015

Banning menthol: the Canadian firsts.

Two months have passed since World No Tobacco Day (May 31), during which the Canadian province of Nova Scotia became the world's first jurisdiction to successfully implement a ban on menthol cigarettes.

It is possible that this event will receive as many conflicting views in Geneva, headquarters to both the World Trade Oragnization and the World Health Organization, as it has in Ottawa, where the federal government refusal to ban this harmful additive is at odds with the recommendations of health analysts and provincial governments.

Menthol: banned in Canada but not by the government of Canada

There are at least two main reasons why menthol in cigarettes is considered to be a harmful additive to tobacco products:  it makes cigarettes more attractive to young people, and by giving a cooling sensation it can trigger smokers to inhale dangerous smoke more deeply into their lungs.

Canada was one of the first jurisdictions to ban flavouring additives in cigarettes, but declined to include menthol in its 2009 law, and repeated this exemption when new regulations were issued earlier this year.

As the regulatory notice for this change sets out, there was a unanimous call from sub-national health authorities, health professionals, academics, and NGOS for "a total ban on all flavoured tobacco products, including menthol products." Only industry groups and a lone member of the general public opposed such a ban. "Of the 58 submissions, 50 specifically called for a comprehensive ban of all flavours, including menthol in all tobacco products."

No health rationale was provided for rejecting the call, and the regulatory notice makes clear this was a decision that was based on policy choices, not evidence. "While the Department is concerned about the use of flavours, including menthol in cigars as well as in other tobacco products, it has chosen at this time to focus its attention on reducing the appeal of certain types of flavoured cigars to counter industry innovation since the 2009 amendment. "

A small percentage of the Canadian market

The market for mentholated cigarettes in Canada is relatively small. (Euromonitor estimates that only 3% of the cigarettes sold in Canada have had menthol added to them.) Tobacco companies have not yet introduced into Canada the novelty menthol products, like 'click convertibles' that have become a popular niche market in South America and Eastern Europe.

Nonetheless, as with other flavoured tobacco products, menthol has emerged as a factor in the uptake of smoking by young people. Although it is a small market, it is thought to have a disproportionately harmful effect on vulnerable population and to create larger long-term consequences.

Leadership by provincial governments

Recognizing that the federal government was not going to take action, some provincial governments planned to exercise their own authority to regulate the tobacco market. This spring six provincial governments began or completed the process of legislating this additive off the market.

Nova Scotia's ban came first (May 31, 2015), with Alberta, New Brunswick, Quebec, Ontario and Prince Edward Island scheduled behind. Collectively, these six provinces include 70% of Canada's smokers.

(See chart of implementation dates below)

The challenges, trade and otherwise.

The Canadian government may find itself in the awkward position of defending internationally a position that it refuses to accept domestically.

It was only a week ago that Canada officially notified the World Trade Organization that this trade-contentious contentious policy was already implemented in one Canadian jurisdiction. Earlier this summer, it had given notice of the upcoming restrictions in New Brunswick and Ontario. (G/TBT/N/CAN/458, G/TBT/N/CAN/462 and G/TBT/N/CAN/455). Presumably notices will also follow when the legal groundwork has been completed in Alberta, Quebec and PEI.

Bans on menthol have been much discussed at the WTO. A challenge to the US ban on clove cigarettes by Indonesia was upheld because its law did not also ban menthol, thus leaving two "like products" with different and discriminatory treatment. The suggestion that Alberta would impose a ban drew fire from Indonesia at a meeting of the Committee on Technical Barriers to Trade earlier this spring, even though no formal notice had been given. (G/TBT/M/65) Brazil's regulation banning all additives (Resolution No. 112, 29 Nov 2010) was discussed on at least four occasions by the same committee. (G/TBT/M/54, G/TBT/M/55, G/TBT/M/56, G/TBT/M/57 ).

Last year, the European Union adopted a new tobacco directive which required states to ban menthol flavouring by 2020. This has not yet been discussed at WTO, but the government of Poland has threatened legal action.

Legal action has already started against provincial bans. Imperial Tobacco filed a challenge against Nova Scotia's law a few days before the ban went into effect - although little more about this lawsuit has been made public.

Bill 33 Tobacco and Smoking Reduction Act and Regulations
Date introduced
November, 2013
November 24, 2014
May 5, 2015
Date enacted
May 28, 2015
Date ban implemented
September 30, 2015
Not yet established
(“up to 2 years” after January 1, 2016)
9 months after enactment of law
New Brunswick
Prince Edward Island
Date introduced
May 27, 2015
April 17, 2015
June 9, 2015
Date enacted
June 6, 2015
May 11, 2015
July 10, 2015
Date ban implemented
January 1, 2016
May 31, 2015

Tuesday, 12 May 2015

Canada chooses health over trademark rights

 In an April 10, 2015 legal brief to the World Trade Organization (WTO), Canada has strongly defended the rights of WTO member states to legislate to control tobacco and, by extension, to protect public health. Canada’s brief is a third-party submission, soon to be available on the WTO website (, in a formal WTO dispute in which the Dominican Republic, Cuba, Honduras, Indonesia and the Ukraine are contesting the validity of new Australian law that requires plain packaging for cigarettes. Since none of the five countries sells any significant amount of tobacco or tobacco products to Australia, it is strongly suspected that the tobacco industry is somehow involved in the laying of these five complaints.

The clear and concise Canadian brief points out that the complainants have cherry-picked their way through international law, citing passages that support their case, while ignoring others that do not. The Canadian brief then provides a comprehensive review of all pertinent international law and judgements. The brief concludes that international trade law, when properly and comprehensively read, does provide WTO members with the ability to regulate in the interest of public health, and that this is “a right that was carefully and purposefully preserved” by the drafters of international trade law. If the Dispute Settlement Panel were to agree with the interpretations of the five complainants, not only would this “erode [WTO ] Members’ ability to regulate in the interest of public health,” it would also “create new rights for trademark owners [and] establish obligations for Members.”

The authors of the Canadian brief can see that an adverse decision against Australia in this case would not only be a blow tobacco control, it would curtail the right of sovereign nations to legislate to protect the health of their citizens. Let us hope that the Canadian argument will be persuasive and that public health protection will not sacrificed to the commercial interests of tobacco companies.

Canada's submission can be read here.

Tuesday, 5 May 2015

A Tale of Two Surveys

This week our crackerjack colleagues at the Propel Centre for Population Health Impact issued their most recent report on Tobacco Use in Canada. As always, this report is clear and offers important insights into the smoking behaviour of Canadians.

And, as always, the analysis is based almost entirely on the Canadian Tobacco Use Monitoring Survey and its successor, the Canadian Tobacco and Drugs Survey.

These are large surveys launched in 1999 by Health Canada and administered by Statistics Canada. They ask a wide-ranging series of questions on smoking behaviour of about 14,500 Canadians. Results which were once produced every six months are now produced every two years.

The CTUMS-CTADS prevalence data gives a very rosy picture. A rousing 40% reduction in smoking prevalence since the beginning of this century.

From Propel's Tobacco in Canada 2015 report

The results of another survey conducted by Statistics Canada give a quite different picture, especially if the number of smokers are considered and not merely the prevalence.

The Canadian Community Health Survey was launched at about the same time as Health Canada's Tobacco Use Monitoring Survey.
There are only a few questions on smoking behaviour, as the survey tries to get information on a wide range of health behaviours of the 65,000 Canadians interviews. Initially results were provided every 2 years - now they are given every year.

CCHS estimates of the number of Canadian smokers provides a much less rosy picture. The reduction in the number of smokers has been a more modest 14%.

From PSC Fact Sheet: Smoking rates in Canada

The two surveys, launched in the same year and asking nearly identical questions about core smoking behaviour have been consistent in their differing results. CCHS always tracks higher.

A wise colleague once reminded me that mistakes are inevitable -- and that the real challenge is the direction of your error.  Is it not prudent to err in the direction of not understating the problem?.

 For me, that means using the CCHS data until it is proven to be less reliable, and to give profile to the number of smokers as well as smoking rates.

Sunday, 3 May 2015

Tobacco industry profits in Canada exceed $1 billion: PMI

In a recent presentation to investors, Philip Morris International provided a graph of the 40 most profitable tobacco markets.

This graph illustrated three important variables that are sometimes difficult to get hold of: the number of cigarettes sold, the market share of Philip Morris and the total profitability of the industry.

With only 6 million of the world's estimated 1 billion cigarettes, Canada might be thought of as a relatively small market. But in terms of profitability, Canada would appear to be in the top 10 and a more profitable market than much larger countries, like France and the United Kingdom.

Sadly, the data used to create the graph was not released, so comparing profitability requires some physical measurement. Putting the results side-by-side suggests to me that the net revenue (profits) from cigarette sales in Canada are closer to $2 billion than to $1 billion.

On sales of fewer than 30 billion cigarettes, that means the companies on average are clearing almost 7 cents per cigarette, or $1.30 per package.

The entire presentation can be downloaded from Philip Morris International's web-site. The graph can be found on slide 5 of the March 17 2015 presentation to the Consumer Analyst Group of Europe (CAGE) Conference.

Friday, 1 May 2015

Manitoba raises taxes on cigarettes by $1.00 per carton

Manitoba became the most recent province to raise the price of cigarettes through taxation. Effective midnight last night, the provincial tax on a cartoon of cigarettes was increased by $1.00 to $59.00.

Additional excise taxes charged by the federal government ($21.03 per cartoon), provincial sales tax of 7% and GST of 5% gives a total tax bill of somewhere around $90 per carton.

Even before the tax increase, Manitoba had the highest cigarette taxes in Canada, with Nova Scotia close behind. The lowest rates are found in Ontario and Quebec.

Also today, Newfoundland and Labrador increased the provincial sales tax to 15%, which will have a modest effect on cigarette prices in that province.

Fact-sheet can be downloaded here:

Excise Taxes
Sales taxes applied to tobacco
Comparative cost of a package of 20 cigarette)
Per 200 cigarettes
Federal Excise Tax
Total Excise taxes

British Columbia






New Brunswick

Nova Scotia

Prince Edward Island


Northwest Territories