The Foundation's foundation

Details were missing in some of the provisions of the settlement among Canadian tobacco companies and their victims that was agreed to in October 2024 and finalized in August 2025. Among these were how the $1 billion set aside for non-eligible victims (the cy-pres foundation)  would be operationalized.

Some information was provided this week in the paperwork provided in advance of a court hearing apparently scheduled for August 7 at 10:00 a.m. The hearing will consider changes to the settlement plans to facilitate the establishment of this "Cy-pres Foundation" to support research into tobacco-related diseases.

Paperwork for this hearing is available on the websites of the Plan Administrator for each company (JTI-Macdonald; Imperial Tobacco; Rothmans, Benson & Hedges), with further information provided in the Monitors' reports (Imperial Tobacco, JTI-Macdonald, Rothmans, Benson & Hedges). 

The court is being asked to approve refinements and clarifications to the terms of reference for the Foundation (pasted below), as well as governance structure and the mechanisms to solicit and review proposals for funding. The board of directors is assigned an extensive list of duties and responsibilities, but members will not be remunerated for their services.

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Extract from motion material (Revised):

The Terms of Reference of the Cy-près Foundation are set out below: 

Tobacco Cy-Près Research Foundation of Canada / Fondation canadienne cy-près de recherche sur le tabac Terms of Reference 

Introduction: This document describes the terms of reference for the Cy-près Foundation. 

Foundation Name: The corporate name of the Cy-près Foundation shall be “Tobacco Cy-Près Research Foundation of Canada / Fondation canadienne cy-près de recherche sur le tabac” which clearly relates to the purpose of the Cy-près Foundation which is to distribute the Cy-près Fund. This name will be used on the Cy-près Foundation’s website and other presentation materials. 

Purpose of the Cy-près Foundation: The Cy-près Foundation’s purpose is to provide an indirect benefit to Individuals who suffer or may in the future suffer from Tobacco-related Disease, except those Individuals who receive a direct benefit under the PCC Compensation Plan or the Quebec Administration Plan by funding research, programs and initiatives focused on achieving earlier diagnosis, more effective treatment and improved outcomes in Tobacco-related Disease. The Cyprès Foundation is intended to indirectly benefit users of Tobacco Products and their affected family members or estates who are not eligible to receive payments of compensation from the Quebec Administration Plan or the PCC Compensation Plan. The Individuals who will be directly compensated through the Quebec Administration Plan and PCC Compensation Plan include Individuals suffering from Lung Cancer, Throat Cancer or Emphysema/COPD (GOLD Grade III or IV) as defined in those plans. While the Cy-près Foundation is not intended to benefit those Individuals who are directly compensated, they may receive an incidental benefit from the research, programs and initiatives it funds. The Cy-près Foundation will also benefit the Canadian public at large by funding research, programs and initiatives pertaining to Tobacco-related Diseases. 

The Cy-près Foundation will not make any monetary payments to Individuals making claims arising from Tobacco-related Diseases. Those Individuals who are eligible to receive monetary compensation may be paid through either the Quebec Administration Plan or the PCC Compensation Plan in accordance with the provisions of those plans. 

The users of Tobacco Products in the provinces and territories who suffer or may in the future suffer from Tobacco-related Disease, except those Individuals who receive a direct benefit under the PCC Compensation Plan or the Quebec Administration Plan, include the following Individuals and any of their affected family members or estates:

 i) Smokers suffering from Lung Cancer, Throat Cancer or Emphysema/COPD (GOLD Grade III or IV) who are outside the PCC Claims Period or who smoked less than the requisite Twelve Pack-Years or, in the case of Emphysema/COPD, were not classified as GOLD Grade III or IV or the equivalent; 

ii) Smokers who have a Tobacco-related Disease other than Lung Cancer, Throat Cancer and Emphysema/COPD (GOLD Grade III or IV) or the equivalent; and 

iii) Individuals who smoke or have smoked Tobacco Products and have not yet or may never develop a Tobacco-related Disease. 

Vision for the Cy-près Foundation: Canadians in all provinces and territories will experience earlier diagnosis, more effective treatment and improved outcomes for tobacco-related cancers, Emphysema/COPD and other Tobacco-related Diseases. 

Mission of the Cy-près Foundation (“Mission”): The Cy-près Foundation will indirectly benefit current, past and future smokers and their families by funding research, programs and initiatives that will focus on achieving earlier diagnosis, more effective treatment and improved outcomes for Individuals who suffer or may in the future suffer from Tobacco-related Diseases. 

Values of the Cy-près Foundation: The Cy-près Foundation will focus on: the inherent value of the research, program or initiative from the standpoint of its indirect benefit to Individuals who suffer or may in the future suffer from a Tobacco-related Disease; the need to maintain a Rational Connection between the work funded by the Cy-près Foundation and those Individuals who suffer or may in the future suffer from a Tobacco-related Disease; commitment to principles of best evidence and expert peer review; collaboration to increase the impact of research funding while limiting Cy-près Foundation overhead costs to maximize the indirect benefit to Individuals who fall within the scope of the Cy-près Foundation; and, ensuring that Cy-près Foundation funded research, programs and initiatives reflect the principles of health equity and opportunity for inclusion of First Nations, Metis and Inuit people. 

What Will Be Eligible for Consideration for Support by the Cy-près Foundation: Proposals regarding research, programs and initiatives that have a Rational Connection to Tobacco-related Disease will be received by the Cy-près Foundation for consideration of eligibility for financial support from the Cy-près Foundation. Programs and initiatives aimed at reducing or preventing tobacco use in Canada are outside of the scope of the Cy-près Foundation because they fall within the purview of the Provinces and Territories, involving policy issues and advocacy. Accordingly, such programs and initiatives will not be considered for funding from the Cy-près Foundation. 

The fact that a Proposal requesting funding for research or a program or initiative is received by the Cy-près Foundation for consideration does not mean that it will necessarily be awarded a Grant. The decision regarding whether to provide funding for a Proposal is within the sole discretion of the Foundation Board and is not reviewable by the CCAA Court or any other court in Canada. 

Early works: 

• Establish “Tobacco Cy-Près Research Foundation of Canada / Fondation canadienne cyprès de recherche sur le tabac” and apply for registration as a “registered charity”, as that term is defined in the ITA, and a public foundation for the purposes of the ITA. 

• Recruit a neutral and independent Foundation Board that will provide oversight of the Cyprès Foundation’s strategy for funding research, programs and initiatives to be funded by the Cy-près Foundation. The Foundation Board will also retain an investment and asset management firm to develop and oversee the financial and investment strategy for the Cyprès Foundation, subject to instructions from the Foundation Board. 

• Develop a strategic plan for the implementation of the intended activities of the Cy-près Foundation. Potential Areas of Cy-près Foundation Financial Support: 

• Improving methods for screening, diagnosis and treatment of tobacco-related cancers. • Establishing best practices for diagnosis and treatment of tobacco-related cancers, Emphysema/COPD and other Tobacco-related Diseases and increasing the likelihood that Canadians can achieve access to best practice care of these diseases. 

• Researching the treatment of nicotine addiction and dependence, and tobacco use in Canada. 

• Researching the effective treatment and palliation of Tobacco-related Diseases. 

• Funding such other program or initiative pertaining to Tobacco-related Diseases as the Foundation Board may approve, provided that it has a Rational Connection and fulfills all other requirements for funding. 

Benefit to the Public in Canada: 

• The results of the research to be funded by the Cy-près Foundation are intended to enure to the benefit of Individuals who suffer or may in the future suffer from Tobacco-related Diseases. The research findings and recommendations regarding earlier diagnosis and more effective treatment of Tobacco-related Diseases will be contributed to the Canadian body of medical knowledge and disseminated to health care practitioners across Canada through publication in peer-reviewed journals and academic databases and presentations made at medical conferences. 

• In addition to benefiting Canadians who have smoked or may smoke in the future, research to be funded by the Cy-près Foundation may have the potential to determine whether screening of higher risk populations and potentially all Canadians can identify cancers at earlier stages of oncogenesis when treatment is less morbid and potential cure is more likely.

 • Expanded learnings from Cy-près Foundation supported research into tobacco-related cancers, Emphysema/COPD and other Tobacco-related Diseases are expected to provide a benefit to members of the Canadian public. In fulfilling the Cy-près Foundation’s mandate, it is anticipated that the Canadian population will benefit from the knowledge generated by this work. 

Process for selection of proposals to receive Grants from Cy-près Fund

 

Addressing the bottleneck in accessing medical records

On Friday February 20, a two-hour "concurrent" hearing was held before Justice Catherin Piche of the Quebec Superior Court and Chief Justice Geoffrey Morawetz of the Ontario Superior Court. 

The focus of the hearing was a request by the lawyers representing injured Quebec smokers (QCAP) for modifications to the procedures available to establish the legitimacy of claims by heirs of members of the Quebec class of tobacco industry victims.

Documents circulated before the hearing included:

* Application by Quebec Class Counsel for an Extension to the Confirmation Order

* Written submissions by Quebec Counsel in support of their motion

* Legal Authorities in Support of the motion  

* Submission of Santé Quebec

Mark Meland presented the reasons for the request, described the process that they were requesting and provided examples of supportive decisions by Canadian courts.

He explained that with only six month left before the claims process ended, there was a risk that hospital archivists would not be able to provide the information required to validate the claims of tens of thousands heirs of smokers whose lung cancer, throat cancer or emphysema had been diagnosed in the specific period covered by the class action. He described the risk to claimants if they were unable to receive the information before the deadline.  "If they cannot find compensation merely because the system is too cumbersome to obtain the information they need to file the claim, then the process will have failed them."

Currently, hospital archivists must establish the succession status of a person making an information request for a deceased person in addition to seeking out the specific health information in the medical records. With tens of thousands of requests before them, Quebec health authorities perceived the risk that they would not be able to manage this one-time high demand before the claims period ended, and also that doing so could cause delays to processing requests from other Quebecers.

They consulted with the legal team representing the QCAP class to develop a proposal to reduce the administrative burden of Quebec hospitals. The proposal includes a mechanism for health authorities to communicate health information to the agencies managing the preparation and determination of claims (Proactio and Epiq). Doing so would allow hospital archivists to focus on the medical records while leaving the establishment of succession status to the agents and claims administrators.

Representing Santé Quebec, Anne de Ravinel briefly explained the desire of the health authority to have the changes approved. (This was the first time in the 7 years of the Ontario administration of this Quebec class action that anyone has spoken in French!).  

She explained that the primary concern for Quebec Santé was the need to respond to requests for records in an appropriately timely way and also to protect the privacy of these records and that the proposal helped the agency meet these responsibilities. 

Also speaking in favour of the request was Kate Boyle (on behalf of Pan Canadian class of victims, which have another year to file their claims) and Robert Cunningham (on behalf of the Canadian Cancer Society).  No parties raised objections or concerns. 

A qualified yes 

Both justices seemed favourably disposed to the request, but Mr. Meland was nonetheless probed about alternative solutions available. He explained that extending the deadline for making claims was unfair to claimants, who had already waited decades to receive compensation. Because no one will receive any money until all of the claims are received, an extension would delay everyone's payment.

A sticking point for Justice Morawetz was the proposal to give Santé Quebec blanket immunity for its new role in the claims process. He seemed unmoved by Mr. Meland's explanation that this was the same kind of immunity which was already extended to other participants in the process (claims administrator, mediator, etc.).  

At the end of the hearing, and after a brief off-camera judicial consultation, the judges said that orders from both courts would be issued in line with the  request, albeit with a minor modification to the immunity provisions. 

The rulings

Decisions made on February 20th were circulated after the weekend by both courts. They are:

• Endorsement of the Ontario Superior Court
• Extension of the Official Confirmations Order by the Ontario Superior Court
• Jugement by the Quebec Superior Court
• Motif (reasons) for Jugement by the Quebec Superior Court

Post-implementation decisions

Almost five months has passed since the settlement among tobacco companies and the governments and smokers whom they injured came into effect. 

This post reports on some of the implementation issues encountered by parties which have been brought to back to the court for review.

October: Establishing a method for joint oversight by Quebec and Ontario courts

The execution of the payments to Quebec smokers involves oversight by both the Quebec and Ontario Superior Courts.  In October a protocol Court to Court Communication Protocol was established to establish some of the ways in which this joint work will be managed. 

November and onwards: Formally dismissing the lawsuits filed against the companies

In November the monitors requested clarity/direction on the steps to formally terminate the lawsuits that were addressed by the settlement and proposed "Pending Litigation Orders to streamline the process for terminating and dismissing the Pending Litigation." 

This unopposed request was agreed to by Justice Morawetz, who initially issued an order in November seeking the support of courts across the country in dismissing the cases.  

In January 2026, he revisited the issue and subsequently requested the monitors to provide him with text to facilitate his using his own authority to accomplish this. 

December:  Authorization for Deloitte to play a double role for JTI-Macdonald

In December, JTI-Macdonald sought approval for Deloitte to work both as court-appointed administrator for the settlement plan and also as auditor for Japan Tobacco's Canadian operations. 

The request was apparently unopposed during the (non-broadcast) hearing and immediately approved. Justice Morawetz' endorsement was issued after the December break. 

January:  Streamlining the Quebec paperwork

Last week, the Quebec class action filed a request with both the Ontario and Quebec courts for approval of changes to the paperwork required by the heirs of injured smokers in submitting claims. A roadblock to finalizing the application is said to involve the paperwork required in getting access by families of dead smokers to the medical records required to provide alternative proof. 

Access to these medical files requires the assistance of Quebec health officials who are said to be "already struggling to respond ... due to the high volume of requests" 

The deadline to file claims under the Quebec class action is this coming August (claims under the Pan Canadian class have an additional year). A provincial government hiring freeze has raised concerns about the government's capacity to manage these requests for records within the mandated time frame. "If the public health institutions receiving these requests must analyse and determine the succession status of the individuals making them (which often is extremely complicated and requires the analysis of multiple documents), there will be a significant backlog and delay and it is unlikely that the alternative proof will be made available on a sufficiently timely basis."

The solution proposed is for officials in the Quebec health system to be permitted to transmit the medical records directly to the agencies which are administering the Quebec and Pan Canadian claim process. This approach is proposed with the full support of the Quebec ministries involved. 

A joint hearing of the Quebec and Ontario Superior Courts has been set for February 20th to decide this request.

51,000 Quebec claims underway - almost half of whom need more paperwork

As shown in the appendix to the request filed last week,  almost half of QCAP claimants will need access to documents for such alternative proof: 8,500 of 13,000 still-living victims and 13,100 of 37,000 succession claims.