Three of Canada's largest tobacco companies have offered to pay around CAD 32.5 billion (approximately USD 24 billion) to settle numerous lawsuits filed by thousands of smokers across the country.
$4.25 Billion to Smokers
The proposal, submitted on Thursday night, aims to resolve long-standing legal battles and includes payments to provincial governments and individuals affected by smoking-related diseases.
Under the proposed settlement, 24.8 billion Canadian Dollars will go to the provincial governments to recover healthcare costs related to treating smoking-related illnesses.
Additionally, CAD 4.25 billion will be paid to roughly 100,000 people in Quebec, while another CAD 2.5 billion will be allocated to smokers from other provinces diagnosed with cancers and other serious illnesses linked to smoking.
Furthermore, over CAD 1 billion will be directed toward establishing a foundation dedicated to combating smoking-related diseases.
The proposal still requires approval from the courts and the plaintiffs. According to Trudel Johnston & Lespérance, the law firm representing the Quebec plaintiffs, the plan has significant backing. “We support the plan and are confident that nearly all creditors will vote in favor of its adoption,” said the firm in a statement.
If the creditors approve, the settlement will be presented to the Ontario Superior Court for final approval, likely in early 2025.
The case dates back to 1998 when smokers with severe health issues and those struggling to quit filed two class-action lawsuits against tobacco companies.
According to El economista the suits were combined in 2012, and by 2015, Canadian courts ruled in favor of the plaintiffs, ordering the companies to pay CAD 15 billion in damages. This landmark ruling acknowledged that the companies prioritized profits over customer health.
In response to the court’s decision, provincial governments also began filing claims to recover healthcare costs related to smoking. Facing massive financial penalties, the tobacco companies sought creditor protection in 2019, which was granted by an Ontario court.
