An estimated five million Canadians smoke. A class-action lawsuit in Quebec has been upheld by an appeals court meaning the major tobacco companies in Canada could face billions of dollars in damage costs to smokers (iSTock)

Credit protection for tobacco giant following lawsuit decision

The big Canadian unit of one of the world’s major tobacco firms, Japan Tobacco Inc. (JTI), has been granted creditor protection following a courth ruling against big tobacco.

This month the Quebec Court of Appeal upheld a class-action lawsuit filed by Quebec smokers that tobacco companies put profits ahead of health concerns of smokers.

The ruling upheld a 2015 decision that the Canadian units of British American Tobacco (Imperial Tobacco), JTI (MacDonald), and Philip Morris Int’l. (Rothman’s-Benson and Hedges) should pay $15 billion for smokers who became ill with cancer or emphysema or addicted to cigarettes.

One of the arguments by tobacco companies is that smokers should have been aware of health risks because of the required warning labels on all cigarette packs.. (Graham Hughes-CP)

JTI-MacDonald sought and was granted creditor protection after saying that it’s share of the damage of some $1.7 billion exceeded its capacity to pay.  It says the credit protection application

was needed to continue its operations and protect jobs in Canada.

In a press release, JTI-MacDonald said it disagrees with the Quebec court decision adding they have always operated within strict Canadian and Q!uebec laws, regulations and conduct and that “Canadians have had a very high awareness of the health risks of smoking. That awareness has been reinforced by the health warnings printed on every legal cigarette package for 47 years”.

Even as lawsuits are filed against big tobacco over the dangers of smoking, the federal government has approved the recreational smoking of cannabis (Christinne Muschi/Reuters)

Other provinces are also suing the tobacco companies to recoup health care costs. Ontario for example is claiming $50 million.

At least one analyst has said that if the tobacco companies declare bankruptcy, the sale of illegal cigarettes could skyrocket. The tobacco companies have said they will seek a hearing with the Supreme Court of Canada.

It is interesting to note that while tobacco faces serious financial threat from law suits connected with smoking, the federal government has legalised the recreational smoking of cannabis and dozens of new companies have sprung up to meet a burgeoning market.

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