B.C. hits tobacco firms

Province plans to charge companies $20-million
to pay costs of smoking-prevention program

The British Columbia government plans to charge tobacco companies licence fees totalling $20-million annually for the right to sell their products in the province -- money the government says it needs to fight smoking.

"What we are trying to do is level the playing field," a government source said in an interview. "We are calling on the tobacco companies to pay for our public-health initiatives that wouldn't be needed if it weren't for their activities in targeting teens and kids and other smokers."

New legislation, details of which were obtained by The Globe and Mail, would forbid tobacco companies from passing the cost of the licences on to wholesalers, retailers, or consumers. The province does not want either taxpayers or smokers to have to pay for the public-health programs, the source said.

The province calculates that $20-million is roughly equal to what tobacco companies spend on promotion in B.C.

Tobacco companies with less than 5 per cent of the market -- essentially, foreign firms -- would have to be licenced, but would be exempt from fees.

No other province charges tobacco companies for the right to sell their products. The B.C. legislation, to be announced today by Health Minister Penny Priddy, is the latest step in the NDP government's battle against smoking.

It is not a welcome one to the tobacco companies.

"The best way to look at this is that it is yet another tax increase," said Rob Parker, president of the Canadian Tobacco Manufacturers' Council.

Mr. Parker did not want to comment on the legislation, which he had not yet seen, but he said the B.C. government already earns $500-million a year in taxes from tobacco. He said the manufacturers earn about $50-million in net annual profits in the province.
Mr. Parker said the province's assessment of $20-million as being equal to B.C.'s share of the total amount that tobacco manufacturers spend on promotion is "utter nonsense."

"I don't know what that government has been smoking but there is always a great gap between the facts and what the B.C. government has to say about tobacco," he said.

Mr. Parker said the tobacco companies spend $65-million a year on sponsoring arts and sport events, which is "about all they are allowed to do" for promotion.

He said the tobacco companies would be prepared to go to court over their right to have the cost of doing business reflected in their product prices.

But the idea of making tobacco companies pay for the costs of smoking through licencing fees appeals to Eric LeGresley, legal counsel to the Non-Smokers' Rights Association.

"What I like about licencing fees is, you're pointing your finger at the right end of things," Mr. LeGresley said. "When you increase taxes, smokers pay, but they already pay a pretty high price, given that one in two of them will die. This is the first time I know of that the tobacco industry are directly being charged for the cost of their products."

The B.C. fees would work out to about $5 per person per year, but Canadians are still far behind some other jurisdictions in what they pay for smoking-prevention programs, Mr. LeGresley said.

California spends $4 (U.S.) per person for its antismoking program and Massachusetts $8 (U.S.).