How the proposed deal between provinces, smokers and tobacco companies would work

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Illegal cigarette sales are costing provinces billions in tax revenue, according to a new report by the Convenience Industry Council of Canada.

Here are some key facts about the plan for Canada's three biggest tobacco companies to pay out $32.5 billion in compensation to provincial and territorial governments and to some smokers.The plan announced by a court-appointed mediator would see tobacco companies pay $24.7 billion to provinces and territories, $6.6 billion to individuals, and $1 billion to a new national foundation for research into cancer and other smoking-related diseases.

Eric Gagnon, Imperial Tobacco Canada's vice-president of corporate and regulatory affairs, says the companies have set aside about $14.5 billion to cover the up-front payments proposed in the plan. The tobacco industry had faced lawsuits by provinces and individuals seeking claims of around $600 billion, he said.Canada's tobacco industry had faced lawsuits by provinces and individuals seeking total claims in the range of $600 billion, far more than the $32.5 billion to be paid out under the plan proposed by a court-appointed mediator. Lawyers for the provinces acknowledge that the proposed payments will not fully cover the cost of providing treatment for tobacco-related illnesses.

"This proposed settlement contains nothing to actually reduce smoking," Cunningham said Friday in an interview with CBC News Network.

 

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