* Seeks C$50 bln in healthcare costs going back to 1955
* Splits liability among companies by market share
* Becomes the 3rd Canadian province to sue Big Tobacco
(Adds no comment Philip Morris)
By Andrea Hopkins
TORONTO, Sept 29 The Canadian province of
Ontario said on Tuesday it has filed a lawsuit seeking C$50
billion ($45.9 billion) in damages from tobacco companies for
healthcare costs incurred by taxpayers since 1955.
In doing so, Ontario became the third of Canada's 10
provinces to sue the country's tobacco manufacturers, all of
which are units of foreign tobacco makers, including Philip
Morris International Inc (PM.N), British American Tobacco
(BATS.L) and Japan Tobacco Inc (2914.T).
The lawsuit by Ontario, Canada's most populous province,
was planned under legislation passed by its legislature earlier
this year, and seeks damages for past and ongoing healthcare
Ontario says tobacco use costs the province C$1.6 billion a
year for healthcare and causes about 13,000 deaths annually. It
said smoking is the province's No. 1 cause of illness and
The legislation allows Ontario to directly sue tobacco
companies for alleged wrongdoing and allocates liability among
tobacco companies by market share.
A spokesman for Imperial Tobacco Canada Ltd, Canada's
leading tobacco company and a wholly owned unit of British
American Tobacco, said the Ontario lawsuit made no sense, given
that the product is legal, regulated and taxed by the
"It's a little bit hypocritical to sue the legal tobacco
manufacturers when the governments have been a partner of the
industry for many decades now," spokesman Eric Gagnon said.
"They are the ones that legislate the industry. We operate,
we do a legal product. (They also) collect billions of dollars
in taxes, so to turn around today and sue the legal industry
makes no sense whatsoever," Gagnon said.
He said Canadian governments collected C$7 billion in taxes
from tobacco in fiscal 2008-09, which ended in March. He said
taxes make up 60 percent to 70 percent of the price of a pack
A spokesman for Philip Morris, which owns Rothmans, Benson
and Hedges Inc, confirmed the companies were among the
defendants named in the lawsuit, but declined to comment.
Tobacco opponents applauded the long-awaited lawsuit.
"We're very pleased by this announcement -- it is very
significant. The tobacco industry has been engaged in decades
of wrongful behavior in Ontario and Canada, and they need to be
held to account," said Rob Cunningham, senior policy analyst at
the Canadian Cancer Society.
"We see these lawsuits as being important to reform tobacco
industry behavior so they will not repeat the wrongs of the
past. It is a question of justice," Cunningham said.
The provinces of British Columbia and New Brunswick have
already launched similar suits -- British Columbia has a 2011
trial date -- but the move by Ontario is significant because
most provinces are preparing similar suits, Cunningham said.
"Ontario being most populous province I think is going to
influence the actions of the other provinces," he said.
All but two provinces have created legislation to lay the
groundwork for similar lawsuits.
After years of battling lawsuits, Big Tobacco agreed in
1998 to pay U.S. states more than $200 billion to help fund the
costs of treating ailing smokers.
The Ontario case is expected to take years to resolve.
Gagnon said Imperial Tobacco would not settle the Ontario case
out of court.
(Reporting by Frank McGurty and Andrea Hopkins, additional
reporting by Brad Dorfman in Chicago and Julie Crust in London;
editing by Peter Galloway and Rob Wilson)