Canadians Try New Tactic On Big Tobacco - Licenses

As negotiations to salvage the national tobacco agreement grind along in the United States, British Columbia is moving ahead with another tactic against smoking - one which some observers say could be much more effective than other approaches currently in use.

The idea is to collect a license fee up front from cigarettemakers to help recoup part of the public costs of smoking.

Penny Priddy, British Columbia's health minister, has introduced legislation that would require all cigarettemakers to obtain a license to sell their wares in the province. The manufacturers with 5 percent or more of the market - currently three tobacco companies - would also be required to pay a license fee. The current target amount to be collected in license fees is $30 million annually, pro-rated among the three conglomerates that would be liable for the levy.

Tobacco is already heavily taxed here, but this levy - officials are careful not to call it a tax - is supposed to be different. "This is not about punishing people who are addicted to cigarettes," Ms. Priddy said in announcing the legislation. "It's about making the industry, and not taxpayers, pay for prevention and cessation programs needed to prevent future generations of British Columbians from becoming victims of tobacco addiction and smoking-caused illnesses."

The $30 million target corresponds roughly to what the tobacco industry is estimated to spend on cigarette promotion in the province. The legislation forbids cigarettemakers to pass along license costs to consumers, although officials aren't clear how it will be enforced, other than to promise "strict oversight."

Most Canadian government efforts against tobacco have tended to focus on smokers and trying to get them to quit. British Columbia, often something of a maverick province within Canada, has been taking more of an American-style approach to smoking, observers note.

"Canada talks to smokers," as one source who has worked in government puts it. "B.C. talks about the tobacco industry. It's a very different framing of the issue."

British Columbia is also taking a tough line on disclosure of additives to cigarettes, as reported on cigarette-package labels.

Like the state of Florida, British Columbia has amended its liability legislation to make lawsuits against tobacco firms easier. But British Columbians keeping an eye on the tobacco litigation in the US are having second thoughts about the courtroom route.

"Licenses are not sexy," says Eric LeGresley, legal counsel to the Non-Smokers' Rights Association in Toronto, "but taking on the tobacco industry with a lawsuit builds political careers." Litigation can take a long time, however. Mr. LeGresley says he expects the new liability law to be challenged under a due-process clause of Canada's Charter of Rights and Freedoms. As a case makes its way through the courts, "it would be 12 to 15 years before you see the first penny" of damages.

Better to get the license fee money up front, in his view - although he calls the $30 million target "almost ludicrously low." Given that health care is state-financed in Canada, LeGresley predicts that other provinces will be watching to see how the tobacco license works in British Columbia.

"The best way to look at this is that it is yet another tax increase," Robert Parker, president of the Canadian Tobacco Manufacturers' Council in Ottawa, has said in published reports. A spokesman for Rothmans, Benson & Hedges, Canada's No. 2 cigarettemaker, has said the license fee is "just another tax grab."

"Certainly the health community looks to British Columbia as a thought leader on these issues," says John Bloom, a spokesman at the Campaign for Tobacco-Free Kids in Washington. "They seem to be taking the best evidence out there on how to reduce tobacco use through traditional means, such as public-health education, and also by trying to hold the tobacco industry in check. They're trying to hold the industry accountable."

The legislation has already received its second reading and should be law by the end of the summer, a Health Ministry spokesman says.

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