More details expected on proposed deal that would see tobacco giants pay billions

More details are expected today on a proposed deal that would see the three major companies pay out billions of dollars to provinces and territories as well as smokers and their loved ones.

The companies — JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. — sought creditor protection in Ontario in 2019 after Quebec’s highest court upheld a ruling ordering them to pay nearly $15 billion in two class-action lawsuits.

All legal proceedings against the companies were then put on hold so the three could continue to operate as they worked towards a global settlement with their creditors, which include the Quebec plaintiffs and provincial governments looking to recoup smoking-related health-care costs.

A proposed plan of arrangement developed through mediation was filed in court Thursday, and includes nearly $25 billion for provincial and territorial governments as well as more than $4 billion for the Quebec class-action members.

It also includes more than $2.5 billion for smokers in other provinces and territories who were diagnosed with lung cancer, throat cancer or chronic obstructive pulmonary disease between March 2015 and March 2019.

Lawyers involved in the Quebec lawsuits and those representing a group of provinces and territories in the proceedings are expected to discuss the proposal in separate media events today.

The proposal must be approved by creditors and the court before it can be implemented.

This report by The Canadian Press was first published Oct. 18, 2024.