After months of secrecy on top of decades of silence, one of the provinces suing tobacco companies for redress has indicated how it will spend the funds -- and hinted at how much it expects it will receive.
This breakthrough was reported this morning on CBC News, as part of a report on a speech to a party conference by recently-elected Manitoba Prmier Wab Kinew.
As detailed in the story (partially reprinted below), Canada's middle province expects to receive from "hundreds of millions to half a billion dollars." Because Manitoba's claim did not quantify the damages it was seeking, it is not possible at this time to know how on the dollar Premier Kinew is prepared to settle for.
Manitoba's population is about 7% of the Canadian population. Is it reasonable to infer that this province is willing to settle for a pro-rated share of less than $10 billion? If so, that is essentially the amount that has been built up during the time of the Insolvency process while the companies have not been permitted to send their profit overseas to company headquarters. Half a billion dollars is roughly equal to the taxes Manitoba currently receives from the sale of tobacco products in a 3 year period.
An equally perplexing element of the story is that the settlement is "with the federal government right now." To date, Health Canada has not indicated any participation in the process or any position on what a settlement should consider. Like the other provinces, it has not consulted on how this process can contribute to a public health objective.
Canadian health groups have made public their objection to a settlement which does not include measures to restructure the industry or the market in ways which ensure a reduction in tobacco use and nicotine addiction.
Food for thought. Grounds for concern.
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Province to use tobacco company settlement funds to pay for new CancerCare building
Premier says first settlement payment could be in range of hundreds of millions to half a billion dollars
Gavin Axelrod, Ian Froese · CBC News · May 5, 2024.
Money the province is getting from a settlement with tobacco companies will go toward building a new CancerCare Manitoba headquarters and other prevention measures, Premier Wab Kinew announced Saturday.
Kinew said the initial payment could be anywhere from hundreds of millions to even half a billion dollars. The timeline of when those funds will be injected into the province isn't fully clear yet, but Kinew said he's expecting the first payment to arrive later this year or early 2025.
"It's with the federal government right now, but we expect that it will be a series of payments over time, but the first initial one will be in that order of magnitude," said Kinew following his speech at the gala dinner as part of the ongoing NDP convention.
The NDP learned about the possibility of a settlement shortly after taking office and are waiting on more details, but Kinew said the full arrangement could potentially be worth billions. The number of payments after the initial one and how long it will take to receive the entire settlement sum also isn't known yet.
"Those are details that will come out when the settlement gets concluded, that's with the federal government right now," said Kinew.
Manitoba sued major tobacco companies to recover the costs of providing health-care services for tobacco-related illness under the then NDP government in 2012. Lawsuits by all 10 provinces named Imperial Tobacco, Rothmans, Benson & Hedges and JTI-Macdonald.
The cases were stalled by a range of court battles, but in March 2019 a group of people in Quebec received $13.5 billion in damages in a class-action lawsuit against the companies. This forced the companies to seek creditor protection, putting a freeze on all other lawsuits against them.
So, the provinces were pushed into the creditor process. Six provinces — New Brunswick, Nova Scotia, Prince Edward Island, Manitoba, Saskatchewan and British Columbia — are working together with the same legal team.
"These lawsuits have been in the works for many, many years and it just so happens that we now expect a settlement to be reached later this year, perhaps next year," said Kinew.
The money will help the NDP fulfil its election promise to build a new CancerCare headquarters. The party said building capital would cost around $350 million while on the campaign trail.
A total of $635 million is also earmarked in the province's 2024 budget for health-sector capital projects, including starting the process of building the new headquarters and acting on other election promises of opening a new Victoria ER, along with an emergency room in the Interlake community of Eriksdale.
Kinew said the government would've found a way to pay for its CancerCare promise, but the settlement allows the NDP to make "forward-thinking decisions" with organizations in the sector.
"I would expect that we would use a good chunk of that for the new CancerCare facility," said Kinew. "But we'll also have resources there for prevention, for clinical research and the other priorities that will allow us to build towards that goal of having the best cancer treatment in the world for Manitobans here in our province."
