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Big Tobacco asks Canadian lawmakers for a competitive tax regime

As Canada prepares for the legalization of Marijuana, federal MP Bill Blair has recently pointed out that in order to discourage further illegal activity, prices at which the substance is purchased legally, should not exceed black market prices. Last Thursday, the president and CEO of Imperial Tobacco Canada, said that the same should apply to Nicotine products.

Diane Caruana

January 2, 2018

Imperial is against the government’s plan to implement plain and standardized packaging for regular cigarettes.

Despite being against any future tax increases, Imperial is not asking for lower cigarette taxes. The company’s head Jorge Araya is lobbying for a competitive tax regime for safer alternatives such as HnB and e-cigarettes, which he referred to as the future of the industry. “The first step is to stop tax increases provincially and federally because we are getting to a level where illegal tobacco is booming in the country,” said Araya after a speech organized by Quebec’s main employers association.

The CEO added that about 70% of current cigarette prices are taxes and that because of the existing illegal market, the Canadian government is losing billions in tax revenue per year. “We will always advocate for very high taxation with (traditional) cigarettes,” he said. “We have to pay for the externalities and health impacts that we create — what we don’t want is to go higher than we are today.”

A Bill that would legalize nicotine-containing e-cigarettes

Imperial Tobacco which like the other Big Tobacco companies, has been investing in safer alternatives, supports Bill S-5. This Bill which is currently making its way through Senate, would legalize nicotine-containing vaping products in Canada. “What we want is to sit down with government and look at all nicotine products and reach an agreement on how to treat taxation in a very sustainable way,” said Araya, who on the other hand is against the government’s plan to implement plain and standardized packaging for regular cigarettes.

“Under Bill S-5, manufacturers and importers of a vaping product containing nicotine would not be required to seek Health Canada approval, provided that the product does not make therapeutic health claims.”Sindy Souffront, Spokesperson, Health Canada

Spokesperson for Health Canada, Sindy Souffront, explained that as it stands, nicotine containing electronic products require authorization from Health Canada before they can be imported, advertised or sold in Canada. “To date, no such products have been approved,” she said. “Under Bill S-5, manufacturers and importers of a vaping product containing nicotine would not be required to seek Health Canada approval, provided that the product does not make therapeutic health claims.”

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