Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 6 - Evidence - September 30, 2009
OTTAWA, Wednesday, September 30, 2009
The Standing Senate Committee on Social Affairs, Science and Technology, to which was referred Bill C-32, An Act to amend the Tobacco Act, met this day at 4:05 p.m. to give consideration to the bill.
Senator Art Eggleton (Chair) in the chair.
[English]
The Chair: Welcome to this meeting of the Standing Senate Committee on Social Affairs, Science and Technology. This session is our second to deal with Bill C-32, An Act to amend the Tobacco Act.
I want to welcome a couple of senators here. Senator Kelvin Ogilvie is present here for the first time today. At this point he is substituting for Senator Martin, but we hope he will be here again. Senator Ogilvie is from Nova Scotia and is one of our new senators.
Senator Rivard, from Quebec, is substituting for Senator Champagne. Welcome to both of you. Thank you for joining us today.
We have two panels today. The first panel is made up of people who have concerns about Bill C-32. The second panel is made up of people largely in support of Bill C-32.
After the panels, I want to discuss with the committee the way forward. I will lay out at that time our options for proceeding.
We have tried to invite as many people as we could who requested the opportunity to appear before the committee. We could not fit in everyone, but we have tried to hear from people who represent the different perspectives and viewpoints, and I hope we have done that. However, at the end, if committee members want to hear from more witnesses or from the officials again, it is possible to do that. Again, we will discuss that at the end of the meeting.
In the first panel we have Casa Cubana, a Montreal-based importer of quality cigar products; Rothmans, Benson & Hedges Inc. and Philip Morris International, a manufacturer and distributor of tobacco products; a representative from the Canadian Convenience Stores Association, representing retail vendors in Canada; Distribution G.V.A. Inc., a Canadian importer and distributor of tobacco products; and BCTGM, which is the union representing the workers at Rothmans, Bensons & Hedges Inc.
Five minutes is the maximum for each witness in order that we can hear all the questions from the members of the committee.
Would Debra Steger like to start? We have a written submission from you as well. Please proceed.
Debra Steger, International Trade Law Expert, Rothmans, Benson & Hedges Inc. and Philip Morris International: Thank you for permitting me to testify today on the consistency of Bill C-32 with Canada's international trade obligations.
I am a professor at the Faculty of Law, University of Ottawa, where I teach International Trade and Investment Law. I have 30 years of experience in international trade law. I have recently chaired a dispute settlement panel at the World Trade Organization and acted as counsel for the Governments of Canada and Mexico in disputes with WTO and the North American Free Trade Agreement, NAFTA. I was the first director and the chief legal adviser to the WTO Appellate Body for the first 60 cases brought to the WTO, including cases brought under the Technical Barriers to Trade, TBT, Agreement and the Sanitary and Phytosanitary Measures, SPS, Agreement. Prior to that, I served as Canada's senior negotiator on the agreement establishing the WTO, and chief legal adviser to the Government of Canada on all the WTO agreements. I was also General Counsel of the Canadian International Trade Tribunal when the Canada-U.S. Free Trade Agreement, the NAFTA and the WTO agreement were implemented and the first cases were heard. A more complete biography is provided in Attachment 1 to my written submission.
I have seen asked by Rothmans, Benson & Hedges Inc. and Philip Morris International to assess the legality of Bill C-32 as an international trade law expert. I am not representing the University of Ottawa in my testimony today.
RBH and PMI completely support the laudable objective of Bill C-32, which is to prohibit certain tobacco products that exhibit fruit or confectionary flavours that are considered to be particularly appealing to youth. However, the current bill is overly broad and, in my view, inconsistent with WTO and NAFTA rules. This defect could have been avoided easily if the government had consulted with stakeholders prior to introducing the bill in Parliament. The government can easily fix the problem now by following the example set by three countries that have already adopted legislation targeted at exactly the same objective. These countries are Australia, the United States and France. Those countries prohibit tobacco products exhibiting flavours that appeal to youth. I have submitted, as Attachment 2 to my written submission, a simple amendment that follows this approach. It is also supported by the Frontier Duty Free Association, the Canadian Convenience Stores Association, the Ontario Korean Businessman's Association and the Bakery, Confectionery, Tobacco and Grain Millers International Union that you will hear from today.
Bill C-32 will prohibit the manufacture and sale of cigarettes containing any of over 5,000 additives, regardless of the quantity or their effect on the flavour of finished cigarettes. Certain of these additives are critical components of blended cigarettes produced by Rothmans, Benson & Hedges Inc. and Philip Morris International. If Bill C-32 is adopted, these blended cigarettes can no longer be manufactured and sold in Canada or exported to other countries. The bill does not, however, ban flue-cured cigarettes, which do not contain additives, but which, like blended cigarettes, taste like tobacco. Health Canada testified before you that blended cigarettes do not exhibit confectionery or fruit favours, and Health Canada has not provided any evidence that a ban on blended cigarettes will achieve the government's stated objective of prohibiting tobacco products that exhibit characterizing flavours that are appealing to youth. In fact, University of Chicago's Professor Casey Mulligan has provided the committee separately with a report demonstrating that the data do not support the conclusion that traditional blended cigarettes are more likely than flue- cured cigarettes to result in smoking by youth.
Now, we proceed to the legal analysis. The WTO Agreement on Technical Barriers to Trade requires that technical regulations be no more trade restrictive than necessary to fulfil a legitimate objective, including the protection of public health. In designing such regulations, WTO members must take account of relevant risks, including "available scientific and technical information."
Bill C-32 is more trade restrictive than necessary to achieve Canada's legitimate objective. The Government of Canada has not taken proper account of the fact that blended cigarettes do not exhibit confectionery or fruit flavours that are particularly appealing to youth. In fact, Health Canada concedes that traditional blended cigarettes do not exhibit such flavours. In this sense, they are no different than flue-cured cigarettes, which Bill C-32 does not ban. In short, the government has failed to establish that a ban on blended cigarettes is necessary to achieve Canada's legitimate objective. Moreover, there are other less trade-restrictive ways to achieve the objective.
The proposed amendment attached to my written statement and the approaches taken by Australia, the United States and France all achieve exactly the same objective without the same trade restrictive effects.
The Chair: We are at the five-minute point. I would appreciate it if you would wrap up quickly.
Ms. Steger: I refer you to my written statement, which goes into more arguments under the TBT Agreement, the WTO Agreement and also Chapter 9 and Chapter 11 of NAFTA. Fundamentally, my opinion is that Bill C-32 is inconsistent with Canada's trade obligations, and I respectfully request that the committee consider and adopt the amendment that I have proposed and that is supported by retail and labour stakeholders. Thank you for inviting me to appear.
Luc Martial, Government Affairs, Casa Cubana: A copy of my testimony is available. Also, I have various pieces of supporting documentation.
I thank the Senate committee for allowing us the opportunity to present both evidence and testimony in support of our contention that Bill C-32 is, at best, a public fraud and, at worst, a betrayal of Health Canada's mandate in tobacco control.
In terms of adding credibility to our testimony, I will introduce both the company I represent and myself. Casa Cubana is a Montreal-based importer of quality cigar products and a leader in the distribution of flavoured little cigars in this country. Established in 1998, the company's reach extends throughout Canada with a sales force servicing approximately 10,000 direct accounts, including wholesalers, retailers, duty-free chains, et cetera.
I am a tobacco control professional with 18 years of experience. I have worked as a policy analyst with the Non- Smokers' Rights Association of Canada; as a data specialist and public affairs coordinator with the Canadian Council on Smoking and Health, as director of the National Clearinghouse on Tobacco and Health, as executive director of the Canadian Council for Tobacco Control, and as evaluator and policy analyst with the Tobacco Control Program at Health Canada.
What is Bill C-32 about? We are here today as a result of what I call, an orchestrated campaign of shock, fear and hate waged over the better part of two years by self-interested anti-tobacco groups, rogue politicians and well intended but misguided and manipulated health agencies and youth groups. They've needed to shock government into action because, on basis of the facts themselves, Bill C-32 finds no reason, purpose or merit.
Bill C-32 is completely leveraged on the basis that the government interest and priority is focused on banning tobacco products that appeal to youth. In this case, we are saying that flavours appeal to youth. Void of any actual research or evidence, however, linking the use of flavours in tobacco products on children's decision to start or continue smoking, the government has rested its arguments on the sole fact that their research shows that kids are getting access to these products. If that is the criteria by which Bill C-32 finds measure and rationale, then the focus of the bill is ill- conceived and indefensible.
If the fact that 6 per cent of minors are finding interest and illegal access to flavoured little cigars is enough to label these products as "appealing" to kids and warrant their prohibition from the legal marketplace, then the government necessarily must concede that non-flavoured, traditional cigarettes are "really appealing " to kids because 10 per cent of minors are finding interest and illegal access to those products. In this sense, Bill C-32 is about banning the one tobacco product that fewer kids are consuming the least of.
Bill C-32 is not about protecting kids from tobacco and smoking. It is about Health Canada dangerously reaching beyond its mandates to force lifestyle decisions on Canadians of legal age.
Bill C-32 is about banning an unquestionably legitimate and legal-age-driven market product and, in the process, putting hundreds if not thousands of people out of work; destroying hundreds of legitimate Canadian businesses across Canada; throwing away hundreds of millions of dollars of annual government revenues; fueling the underground economy for tobacco products; and, in the process, providing for much more, much cheaper and completely uncontrolled tobacco products to the kids that we want to protect.
Bill C-32 is not health legislation. I keep saying it is hate legislation. The Senate must decide to what extent some people's hate of the industry — of those who work in the industry, of these products and of the legal-age Canadians who choose to consume these products — should be allowed to undermine honesty, integrity and accountability in our government.
The truth about these products is simple. Favoured tobacco products make up 0.5 per cent of all tobacco products consumed in our country every year. The vast majority of Canadians who consume these products, which Health Canada knows from their research, are of legal age to consume these products — the legal age mandated into law by every government in this country. Actually, 92 per cent of those who consume these products are of legal age to consume them.
While kids are getting some illegal access to those products, unfortunately, the same government research tells us that kids are getting far greater access to non-flavoured tobacco products, much greater access to government- approved alcohol products, and gambling products as well.
The flavours found in these products, which seem to be the point of contention, are also found in a wider variety and in greater quantity in alcohol products approved for sale everyday by every government in Canada.
There is no research that supports, in the least, a minimum packaging requirement for these products, or the banning of any particular flavour, let alone all of them. Health Canada knows this. To this point, and perhaps most telling, is the fact that the government's own long-standing leading research expert in tobacco control, Dr. Murray Kaiserman, is nowhere to be found on this file. How is it that Health Canada would have testified before the House of Commons Standing Committee on Health and before the Senate committee two weeks ago, and their leading expert for 25 years in research is nowhere to be found.
In another interesting twist, Health Canada and anti-tobacco groups long ago conceded that banning tobacco products in no way impacts youth uptake or consumption. Yet, here they are now trying to convince you otherwise.
In the absence of any sound, solid research and policy foundation justifying any aspect of this bill, in the absence of any meaningful consultation with the thousands of legitimate private sector stakeholders who you are about to put out of business and work, in the absence of any government commitment to any publicly stated measurable health objective — in the absence of these basic fundamentals to good governance in this country — we are asking you to vote down Bill C-32.
The Chair: You packed a lot into five minutes. I am sorry about our time being so restrictive. I know you want to have more time. However, we have received a lot of documentation on the subject, including from each of your organizations. We have further documentation that we meed to read and absorb. We have back up material for a lot of the points that you may feel you are rushing through.
I also want to point out to members of the committee, as I did last time, that we have two more petitions. One was forwarded by Mike Gobin from Alberta with approximately 2,300 signatures in opposition to Bill C-32. The other was forwarded by Jenny Togias. It has 1,200 signatures and expresses concerns particularly for small businesses and convenience stores.
Our third speaker is Michel Gadbois, Executive Vice President, Canadian Convenience Stores Association.
Michel Gadbois, Executive Vice President, Canadian Convenience Stores Association: You have a kit before you; all references to numbers and percentages are in the kit.
I will respond to questions in French or English, but I am more comfortable presenting in French, so I will proceed.
[Translation]
On behalf of the Canadian Convenience Stores Association, I would like to thank you for hearing from convenience store retailers about Bill C-32.
I would first like to say a few words about our organization. The CCSA represents 25,000 convenience store owners and managers across Canada through well-established regional organizations in the Atlantic provinces, Quebec, Ontario and western Canada. We represent independent retailers as well as small-, medium- and large-scale chain stores.
The economic impact of convenience stores in Canada is considerable no matter how you look at it: in direct jobs, 165,000 employees, $2 billion in annual salaries and $11.3 billion in annual taxes. That works out to almost six times the salaries in taxes remitted to the government.
Convenience stores are among the few "mom and pop" companies left. We believe that it is very important to preserve a place for this type of business, which is often the only business to provide basic services in many remote locations.
Convenience stores in Canada are 100 per cent behind the fight to prevent young people from smoking. In the documents, you will find a fair bit of information on the programs offered in our stores to train our young employees not to sell to minors. It is difficult, but we have programs to train our employees. The results of Health Canada surveys show that we are successful in controlling sales to minors.
Given our serious efforts to prevent young people from smoking, you will understand why we are in favour of banning the sale of flavoured cigarillos. Banning these products is in line with both our efforts and the government's.
That said, we have not yet heard — nor can we envision — a single logical or factual argument that supports banning blended cigarettes. We oppose the article in Bill C-32 that provides for this ban.
With all due respect to the members of the committee, experience has shown that in our 25,000 convenience stores across the country, blended cigarette brands like Gauloises and Rooftop are not in high demand from people likely to be carded by our retailers. Blended cigarettes are very different from fruit-flavoured cigarillos. Banning them will in no way contribute to preventing young people from smoking. Banning these products will, however, deal a stunning blow to the convenience store industry, which is already reeling from the contraband tobacco currently flooding the Canadian market.
By banning blended cigarettes, you eliminate an entire range of products for our members. At the same time, you are handing these products to criminals on a silver platter, giving them a monopoly on a whole new product and a chance to increase their profits and extend their networks. If we can no longer sell these products, you can be sure that organized criminals will fill the gap, adding this new product to their existing products, including drugs and weapons.
The vast majority of Canadians are well aware of the contraband tobacco market's tremendous growth. In one of our reports last year, we estimated that in 2008 more than 30 per cent of tobacco sold in Canada was illegal, and that contraband cigarettes accounted for over 40 per cent of the market share in Quebec and 50 per cent in Ontario.
As for me, I am still touring and speaking about issues like the surveys we have done; we have collected cigarette butts in the vicinity of school yards — you may have heard of this — and our analyses have shown that in the last 10 years young people have never smoked as many contraband cigarettes as in the past, because they are so accessible.
At the beginning of my presentation, I mentioned that the CCSA represents 25,000 retailers across the country. What I did not mention is that each retailer employs on average between four and ten people. These people are often extended family members.
What I am trying to say is that contraband tobacco is not a victimless crime, but rather a crisis which has seen one convenience store a day disappears in Canada in the last three years — one a day! These people pay their taxes and are not asking for a handout from the government. But after the decision was taken to charge an excessive price for cigarettes, the market, or half the market, shifted into the hands of criminals.
In conclusion, we support all the elements of the bill that we believe will be effective in preventing young people from smoking. We have been supporting this cause for many years, and Health Canada recognizes our efforts.
Based on this evidence, we ask you not to ban blended cigarettes. It goes too far. We ask the members of the Senate to amend the bill so that blended cigarettes are not banned in Canada.
[English]
The Chair: Next, we have Luc Dumulong, Vice President of Distribution G.V.A. Inc. We also have a written submission as well.
Luc Dumulong, Vice President, Distribution G.V.A. Inc.: Contrary to my colleague, I went the extra mile and will do my presentation in English although my mother tongue is French.
The Chair: Either language is acceptable.
Mr. Dumulong: I know, but I am psyched up in English now.
G.V.A. is a small family business established in 1997 that employs approximately 80 Canadians. We are an important importer and distributor for convenience stores, tobacco shops and duty-free boutiques. We distribute over 1,000 different cigar products in the country. Our organization's annual tax remittance to governments exceeds $20 million.
The consumers of our products are adults. We are opposed to minors being able to obtain access to them. The Minister of Health has announced that the government intends to establish a prohibition regime on all flavoured tobacco products by means of Bill C-32. If the bill is adopted in its present version, it will result in many negative consequences for the Canadian economy in terms of layoffs, reduced tax revenues and counterproductive consequences for public health and policy.
Distribution G.V.A. deplores the evident lack of consultation in respect to Bill C-32. I can give you many examples. We received two days' notice before giving our presentation to the House of Commons Standing Committee on Health and two hours' notice before a conference call also with the Standing Committee on Health. There was little time to be consulted.
In 2008, the Quebec government had a similar preoccupation with flavoured cigarillos sold in single-unit sales. The authorities openly consulted with all stakeholders in the elaboration of Bill 112. By establishing a minimum transaction price for cigars sold by the unit, single-unit sales in Quebec are now almost nonexistence. The flavoured products currently sold are now sold mostly in twin packs that are $2 to $3 more expensive than a 20-pack of cigarettes.
Bill C-32 needlessly overreaches its scope. This situation is a direct consequence of Health Canada's lack of much- needed and meaningful consultations with key stakeholders, which has resulted in an important knowledge gap about cigars and the Canadian cigar industry in general.
In its current version, Bill C-32 will prohibit products that have been on the market for decades, little products like these, which do not appeal to younger smokers at all. These products will be banned needlessly. In our written presentation, we have an annex to support this evidence.
We cannot understand why the government and Health Canada do not conduct the necessary research to find out if there is a real problem with this issue. The government has no idea if there is a problem with this issue at all. The government presents this issue as an emergency and is fast-tracking this bill to ban a category representing, as my colleague said, less than half of 1 per cent of the total Canadian tobacco market, while at the same time granting an exemption for menthol cigarettes, which, to quote the minister, is "marginal," at 2 per cent.
The latest Canadian Tobacco Use Monitoring Survey, 2008, shows that the vast majority of these products are consumed by adults, as previously mentioned, and that use of them by young people is in decline. According to Health Canada, access to cigarettes through the contraband tobacco market is much greater for cigarettes than for flavoured cigarillos. The Statistics Canada survey demonstrates that the flavoured category did not create more smokers per se, but consumers switched from cigarettes to flavoured cigarillos. A total prohibition of flavoured cigarillos will result in an increase in tobacco contraband and increased accessibility to these products by minors.
The illicit contraband tobacco trade presently offers zip-lock bags that are sold for $20 for 200 units. This price is called affordability. If the bill is passed and a total ban on flavoured cigarillos is imposed, we will find these in schoolyards all over Canada. Furthermore, we now have giant billboards on native reservations advertising these products, which are tax exempt, by the way.
We also are concerned that Bill C-32 gives a lot of power to the Governor-in-Council. As Canadians, we should also question the rationale for giving civil servants and bureaucrats the latitude to change the law at will, without having to present their intention to the duly elected members of Parliament.
In terms of our recommendations, we propose that the definition of "cigarillos" be reconsidered to allow for traditional little cigarillos to be sold, and to continue to be legally available, to Canadian adult consumers.
We also recommend that the government establish a minimum transaction price, as the Quebec government did in successfully dealing with single-unit sales of these products. We recommend that, because of the higher selling price, an amendment to the bill be introduced to allow for sale of flavoured products of 10 and 20 units so that Canadian adult consumers can obtain their product of choice legally.
We recommend a ban on tobacco possession by minors. We also recommend that Bill C-32 not be passed in its present version until the Senate committee hears from the RCMP and the Canada Revenue Agency, who have not been heard on this issue. Members of these organizations are experts on much broader issues than we discussed here, in terms of contraband and so on.
In conclusion, for the important reasons we presented here this afternoon, we appeal to the honourable senators' intellectual rigour, and respectfully request that the committee not recommend the adoption of Bill C-32 in this version.
Richard Brousseau, President, Bakery, Confectionery, Tobacco Workers and Grain Millers International Union: I would like to make my presentation in French.
[Translation]
I would like to begin by thanking the committee for inviting us and for giving us the opportunity to express our concerns with regard to Bill C-32 as drafted. My name is Richard Brousseau and I am the President of the International Bakery, Confectionery, Tobacco Workers and Grain Millers Union, local 261-T.
I represent the 300 employees of the Rothmans, Bensons & Hedges plant in Quebec City. RBH has been manufacturing tobacco products in Quebec for over 100 years, whereas the biggest tobacco producer in Canada transferred its entire production to Mexico. For seven years, RBH has continued to produce all of its products in Canada. It employs 750 people throughout this country, including 300 in our Quebec City plant.
I would like to mention the fact that RBH's employee union supports the bill, which aims to regulate cigarillos. Cigarillos often retail for $1 each. As opposed to cigarettes, cigarillos do not have to be sold in packs of at least 30, they are also not obliged to carry a graphic message in the front and the back of the package which includes a health warning, and the list of ingredients is also not indicated.
I will take a moment to talk about blended tobacco. There are all kinds of blends manufactured in Canada. Blended tobacco is comprised of three types of tobacco called Burley, Oriental and Virginia tobacco. The blend also contains ingredients which control taste and humidity. These ingredients ensure that the final product smells like tobacco and not like fruit or candy. Please feel free to smell these cigarettes, if you wish.
We produce tobacco products. You might say that you heard that the production of these products in Canada is minimal. As you probably know, our company was bought by Philip Morris International last year for $2 billion. But what is clear is that Philip Morris wanted to export its products and develop the Canadian market. If it cannot do that anymore, we will not be able to compete with plants in Latin America that pay their workers lower salaries and give them fewer benefits.
Let us talk about the Philip Morris acquisition. As part of the acquisition process, Philip Morris provided Investment Canada with a number of commitments, including its plan to make further capital investments in RBH plants in order to manufacture cigarettes in Canada for sale in other countries, as well as introducing into Canada PMI's International Brands not currently sold here. On the basis of that plan, jobs were to be preserved and the acquisition was approved by Investment Canada.
The acquisition was welcome news for the employees of RBH and their families. Capital investments have already been made in order to utilize the Quebec City plant's excess capacity. We currently manufacture variants of Rooftop, Gauloises, Gitanes and Carreras. The tobacco we use in the various blended cigarettes comes from countries such as the United States, Brazil, Argentina, Malawi, Mozambique, Macedonia, Greece and Turkey. We understand that lawmakers from those countries have written to the Canadian government in order to express deep concern over bill C- 32, calling it a protectionist bill.
We are here to talk about our jobs. Philip Morris brands contain the ingredients banned by the bill. The ban thus undermines the business plan for the Quebec City factory and puts more than 300 jobs in jeopardy.
We believe that the solution is to ban tobacco products that produce tobacco smoke with a dominant confectionery or fruit flavor. That is a measured, well-thought out approach that we respectfully ask this committee to consider. That is the solution adopted in America, Australia and France. It will help accomplish the government's objective. We feel that a simple regulatory change or guarantee by the government not to implement some of the bill's provisions would be completely unacceptable.
Ministers, governments and regulations come and go, but laws remain. An amendment must be made. Our plant and our jobs depend on it. It is up to you to decide whether to throw 300 families out on the streets or adopt an amendment that would respect our international agreements concerning the legal sale of a legal product.
[English]
The Chair: Thank you all for keeping relatively close to the time limits.
I will now turn to committee members. I ask them to limit themselves to one or two questions and to keep their preambles to an absolute minimum because we have only 20 minutes until the next panel.
I will begin with a question to Professor Steger with respect to the WTO and NAFTA, as is her expertise. My question is about the American-blend cigarette and its manufacturing by Rothmans, Benson & Hedges Inc. and Philip Morris International.
The Tobacco Act, which Bill C-32 proposes to amend, refers to manufacturing for the purposes of sale in Canada. If the product continued to be manufactured for the purpose of export to the United States, would that be a solution? Does the Tobacco Act provide for that possibility?
Would another approach be possible through Bill C-32 at clause 9, which proposes subsection 7.1(1) where it says that "The Governor in Council may, by order, amend the schedule by adding, amending or deleting," et cetera?
The Governor in Council — the minister and cabinet — could make changes so that Rothmans, Benson & Hedges could continue to manufacture entirely for export purposes. Can you comment on that approach? Would an exemption fit in with the WTO and NAFTA regulations?
Ms. Steger: The short answer is no. An exemption for export products would not be consistent with WTO rules. The Technical Barriers to Trade Agreement states that whatever the government's legitimate objective is, the steps that it takes and the regulations that it makes must be no more trade restrictive than necessary to fulfil that objective.
Another provision in that agreement says that technical regulations should be based on performance characteristics — taste — rather than on design characteristics — additives.
The problem with the bill is that it is overly broad in its approach. The bill lists over 5,000 additives that are typical flavourings that are safe in food. The approach of other countries has been to regulate the flavour of the cigarette. That approach is entirely consistent with WTO obligations. These obligations are not geared at the trade effects, per se, such that you do not have to quantify the trade effects, but are geared at potential effects. This is a fundamental problem with the bill, but it is simple to resolve.
The Chair: There is no discriminatory aspect with respect to dealing with an American company versus a Canadian company. Those restrictions apply in both cases, do they not?
Ms. Steger: That is true.
The Chair: Is that a defence in terms of trade law?
Ms. Steger: That would be a defence if we were talking about Article III of the General Agreement on Tariffs and Trade, which is the non-discrimination provision. However, in this case, we are talking about the Technical Barriers to Trade Agreement, which applies to all product standards and does not require discrimination. Rothmans, Benson & Hedges Inc. and Philip Morris International is saying that the company fully supports the legitimate objective but the regulation must be calibrated to that objective and must not be overly trade-restrictive. In my opinion, even an export exemption falls afoul of the TBT Agreement.
Senator Keon: My question is for Ms. Steger and Mr. Brousseau. Much concern has been expressed about the potential closing of the Quebec City plant. Another rumour is that the Quebec City plant will close whether this legislation passes. Can you comment, please?
[Translation]
Mr. Brousseau: No, there have been no rumors of a shutdown at the plant. It is running smoothly. We do have a good production volume. Obviously, such a bill jeopardizes Philip Morris's plans. PMI already owned 40 per cent of our company. Last year it bought out the rest and became the sole owner. Philip Morris has 58 factories across the globe.
Philip Morris had planned to use our plant to launch new products on the Latin American market and develop the Canadian market with its existing brands, which have been manufactured at the Quebec City plant for the past 4 or 5 years. If the project falls through, there will still be a market there, but it will be targeted by makers of contraband cigarettes, which will increase the number of young smokers who are already turning to contraband products because of their steep price.
Philip Morris does not plan on closing the Quebec City plant. They did not invest 2.5 billion dollars to shut it down. However, if they cannot carry out the projects that are planned for the Quebec City plant, who knows what will happen. The plant currently has two contracts: one for production that is expected to start within two weeks and another intended for Argentina and Mexico.
We have been hearing about potential hirings for some time now. If Philip Morris can no longer export and develop these products, who knows what will happen. Our plant will cost more to operate than a plant in Latin America or than one of the other 58 plants held by Philip Morris internationally.
[English]
Ms. Steger: I am not aware of such rumours. In 2008, when Philip Morris International took over Rothmans, the investment was reviewed by Industry Canada under the Investment Canada Act. Philip Morris made undertakings to the government that it will maintain employment and that it will expand and bring new blended products into Canada. Philip Morris International and Rothmans are required to live up to those undertakings made under the Investment Canada Act.
This bill will undercut that business plan and the government's approval of the investment only last year. The bill will make things difficult for Rothmans, and the company will not be able to live up to the undertakings that it gave in 2008 that were approved by the Minister of Industry.
Senator Segal: I have one question for Ms. Steger and one question for Mr. Martial. Ms. Steger, based on the vast experience that you have had with these issues, what remedies do you expect Americans and others who feel harmed by this legislation to take? What options are available to them? If you were advising the Minister of International Trade on expected actions, what advice might be on that list?
Ms. Steger: It is difficult to speculate on what other governments might do. If another government wanted to bring a case against Canada, that government could do so at the WTO. As you know, a number of members of the U.S. Congress oppose the bill, the Greek government opposes the bill and other governments may oppose the bill as well. I do not want to speculate on what might happen, but they might have a good case before the WTO, given the way in which the bill is drafted.
Senator Segal: Mr. Martial, however we may feel about the instrument chosen by the public servants in this bill, and however we may feel about whether it is adequate, inadequate, inappropriate or excessive, I sensed in your presentation some reflection on their motivation.
Do you want to expand on that point? Are you suggesting there is something going on here other than public servants working as hard as they can to protect people from the ravages of cancer? If there is, can you be good enough to share it with us because we all want to benefit from that insight?
Mr. Martial: Absolutely; I think it is relevant. I was at a meeting in May with Health Canada's own leading expert on tobacco control, who is about to retire soon, Dr. Murray Kaiserman. I told him I had looked at the research. I worked under him at Health Canada. From everything I see, this issue is clearly not a problem, especially among youth. He conceded that it is not about children smoking this product. It is about the fact that the product looks good. That is our problem. It is about lifestyle.
I asked if he had any research or if he is undertaking any research. I have asked government, especially Health Canada, for the last year now to conduct research about this product. Who is consuming it? How are flavours impacting the decision to start, or continue, smoking? Where are they purchasing the product? For all you know, you will be banning a product that kids are already buying from the illegal trade. You and Health Canada do not know.
Dr. Kaiserman told me that they do not have research and will not conduct research for two reasons. First, the market is so small that the data would not be reliable. Second, if they do not conduct research, they do not have to release the findings. I took that comment to mean that Health Canada does not want to conduct research that will prove this product is a non-issue.
I think, as a senator, I would be offended at Health Canada presenting to me proposed legislation where they have chosen intentionally not to consult with the stakeholders. They have chosen intentionally not to do research.
Yes, there is more than simply protecting children. It is not about protecting children. This product is the one tobacco product that the fewest children are consuming the least of. That is what you want to ban. It makes no sense on the face of it. I keep saying it is about hate legislation. You hate these products because there are flavours. How dare we do that?
I made the point by saying, look at alcohol across this country. The exact same flavours are found in alcohol. However, no one is saying the government is conspiring with the alcohol industry to target kids or that the alcohol industry uses flavours in alcohol to entice children to start drinking and so forth.
Senator Ogilvie: I have two questions for clarification. The first relates to a figure given by Mr. Martial, but it was confirmed subsequently by his colleague. As I understand it, these flavoured products constitute one half of one per cent of the tobacco market.
Mr. Martial: It is less.
Senator Ogilvie: The second question deals with comments by Professor Steger. I want to ensure I heard her correctly. She said the bill is essentially a list of 5,000 specific compounds that deal largely with flavour. She went on to say that if this bill had dealt with the issue of flavour, it would have been acceptable. Is that correct?
Ms. Steger: That is absolutely right. The approach of the bill is the problem, not the objective of the bill. It is the way that Health Canada decided to do it. They have prohibited cigarettes containing any of a list of over 5,000 additives that the World Health Organization and others have listed. These are additives like chocolate, licorice or a number of different additives. Some are used in making these blended cigarettes, but the blended cigarettes do not taste like strawberry or chocolate. Blended cigarettes do not have a flavoured taste.
Other legislation in other countries is targeted at the end flavour of the product rather than the additives that go into it. For example, the French legislation is targeted at the flavour of the product. The French legislation also talks about the quantity of ingredients added. The approach is the problem, not what the government is trying to do here.
Senator Ogilvie: To clarify that point, if I look at the list of compounds identified and that you referred to, I would expect that if many of them were added to a tobacco product, the flavour would maintain itself in the product. You are referring to specific products that do not contain the items on that list. Is that correct?
Ms. Steger: The problem is that blended cigarettes are the American type of cigarettes sold everywhere else in the world except Canada and the Commonwealth countries. They are blended from three different types of tobaccos as Mr. Brousseau explained. They add some of these additives to achieve their characteristic tastes.
However, at the end of the day, they do not taste like chocolate, strawberry or some of the other products that Mr. Brousseau has shown you.
[Translation]
Senator Rivard: I would like to say something to Ms. Steger before asking Mr. Brousseau a question.
Naturally, your client claims that a number of rules have been violated, including those of the WTO, GATT and other free-trade agreements. According to our information, Health Canada and others assured us of the contrary. So this is like what happens in everyday life, when there is a disagreement, the courts are asked to decide who is right and who is wrong.
And now to the question for Mr. Brousseau. I believe you were present this past summer in Quebec City when I had the pleasure of meeting the president of Rothmans. He was calling on the government to bring forth an amendment in order to import Burley tobacco into Quebec and manufacture cigarettes for the export market. Are you asking for more than that today? Are you also asking that those products be allowed for sale in Canada or are you maintaining the request made this summer to import Burley tobacco and manufacture cigarettes solely for the export market, whether in Europe or elsewhere?
Mr. Brousseau: We might have been unclear in our requests.
We want to import and export American tobacco, although we do have a small-scale production at the Quebec City plant. Not much is being produced today, but Philip Morris also intends to develop products. The products that we export internationally are made with American tobacco, not with Virginia flue-cured, which is used in our domestic cigarettes.
Our concern is that we will no longer be allowed to produce cigarettes locally. We know that there are customers for those products, which used to be manufactured in Europe but are now produced here at RBH; but if they can no longer be manufactured locally, we know that the people who buy those products will look to the contraband market. The government will no longer be able to collect taxes and verify the ingredients of those cigarettes, et cetera. And because contraband cigarettes are cheaper, people will also be encouraged to consume them.
Mr. Dumulong presented to us the types of products people smoke here because of their lower cost. We think that it is important that the Quebec City plant retain its production in order to safeguard the jobs in our area.
Senator Rivard: Thank you.
[English]
Senator Callbeck: Thank you for coming today. I believe that two of you said you were not consulted before the government presented this legislation. Were any of you consulted?
The Chair: They are all saying no.
Senator Callbeck: Mr. Brousseau, you mentioned a contract from Mexico. Why are those cigarettes not made in Mexico? The labour is so much cheaper.
[Translation]
Mr. Brousseau: Why are those cigarettes not manufactured in Mexico? That is a good question. There as in the rest of the world, cigarettes are manufactured with what we here in Quebec call "swinging covers." You can find some in Quebec, but it is much more frequent to see what we call the "sliding drawer" format. We therefore manufacture a product that does not exist in Mexico, Argentina or Honduras, and which the company wants to export to those countries. We have the manufacturing capacity; we have already done projects for them. We already have the technology. As well, in terms of the profit threshold, it is easier to start up production here than over there. Investing in new equipment is much more of a challenge for those people when things do not work out as planned.
Things have been getting underway, and we will start up a project in October and another one in January. Other contracts for a number of plants might be signed over the next year. These might not be contracts per se, we might initiate production, but all these prospects will nevertheless create employment opportunities. We were talking about hirings, and so we have to address our overcapacity. Some machines are not operating full time.
[English]
Senator Callbeck: Is this contract from Mexico new or have you had those contracts before?
Mr. Brousseau: No, we have not had them before.
[Translation]
We never did that. It's the first time. We already developed a project in another plant, which we are still working on. It is not a big project, but as it now stands we are working on a contract to produce between 30 and 40 million cigarettes in October. We received a new production contract in 2010. A delegation of marketing experts visited all of the plants to see how they could use the different types of machinery and the formats.
Senator Pépin: The Australian legislation regulates flavored tobacco and not conventional cigarettes. I believe that the Australian model was copied by the United States and France. What is the difference between the Australian legislation and Bill C-32?
[English]
Ms. Steger: That is a good question. I have attached to my written submission copies of the Australian legislation, the U.S. legislation, which came into effect last week, and the French legislation. The Australian legislation has been in existence since 2006. The states of New South Wales and Tasmania have enacted similar legislation in Australia.
The big difference between these approaches and that of Bill C-32 is that they target the flavour of the product. They prohibit tobacco products, including cigarettes, that possess "a distinctive fruity, sweet or confectionery-like character." Those words are from the Australian legislation. The taste of the product ultimately is confectionery, fruity or sweet. As I said, in my opinion, writing the bill in this way is entirely consistent with the WTO agreements and the NAFTA. However, Health Canada has decided to incorporate in a schedule to Bill C-32 a list from the World Health Organization of over 5,000 additives. If the cigarette contains any of those additives, it is prohibited.
This point came up in the committee of the House of Commons. The bill was drafted in such haste that when it was introduced in the House of Commons, members discovered right away that the bill also prohibited flue-cured cigarettes, which are the regular cigarettes that represent 98 per cent of the Canadian market. This prohibition happened because regular flue-cured cigarettes also have a marking on them that contains additives. That point came up in the House of Commons committee. The bill would have prohibited all cigarettes. I do not think that the intention in the beginning was to prohibit blended cigarettes because blended cigarettes and flue-cured cigarettes taste like tobacco, not confectionery or fruit. The government did not do its homework, did not present any studies and did not consult with any of the stakeholders before introducing the bill. As a result, it made a mistake. The mistake is simple to fix by taking the approach that Australia, France, the U.S. and other states in Australia have taken: target the flavour rather than list all the additives that are contained in the cigarettes and the paper as well.
The Chair: That brings us to the end of the first panel. Thank you for your presentations and answers to questions.
We will now hear from the second panel of witnesses. I call upon François Damphousse to please proceed.
[Translation]
François Damphousse, Director, Quebec Office, Non-Smokers' Rights Association: Mr. Chair, we are pleased to have this opportunity to express our views on this bill. We support the bill without amendment.
First, I would like to correct the perception some people have about the bill and especially its objective. The objective of the bill is not only to prohibit the addition of flavours, such as fruit or candy, in cigarettes. Its objective is much wider in scope. The bill limits the marketing of tobacco products to better protect youth.
Second, in our view, it is inevitable that Rothmans, Bensons & Hedges will close its doors. Whether the bill is passed or not, there is no doubt that the plant will close.
Since 1993, I have been an anti-tobacco activist. We appeared before the Commission des affaires sociales to speak to the Government of Quebec's Tobacco Act in 1998. Imperial Tobacco had also appeared before the Commission and had threatened the government with closing its plant if the government did not withdraw its power to regulate tobacco products and their packaging.
At the time, Dr. Jean Rochon backed down and withdrew those two measures from the bill. Several years later, in 2003, Imperial Tobacco closed its plant in Saint-Henri, in Montreal, and two other plants in Ontario. The company moved its production to Mexico.
You will find a document appended to my report which shows that economists had, since 1993, been predicting that those plants would indeed be shut down.
The only reason why these companies still operate here is to blackmail the government into weakening its tobacco control measures. I am asking you to please not fall into that same trap.
We are concerned with the proposed amendments. In particular, they focus on the typical aromas which are associated with tobacco flavours. The proposed amendment is, in our opinion, unacceptable. We saw what happened in Australia and the United States when similar legislation, or a similar amendment, was introduced. First off, I would like to know what methodology you intend on using to determine what is a typical tobacco aroma. There is no way to make such a determination. It will be very easy for the tobacco industry to challenge before the courts the threshold of perception of tobacco product odours which contain additives.
It is essential that we control and prohibit the use of the additives as set out in Bill C-32. This issue is extremely important for us.
Something else is often overlooked: additives and flavourings are not only used to make cigarettes taste better. For years, we have had access to a big tobacco's internal documents, especially since legal action was taken against the tobacco companies in the United States. These documents clearly revealed that, for the tobacco industry, additives are also used to reduce the effect of nausea experienced by new smokers. This is very important if you are trying to hook new smokers. Additives are also used to increase the addiction caused by nicotine. In fact, several studies have confirmed this.
The industry must not be given an opportunity to find other ways of using the additives mentioned in Bill C-32 to continue to have a hold on people and especially young people. One of the arguments often put forth by industry is that it wants to offer products to adult consumers.
The Supreme Court of Canada made a ruling in 2007, as the tobacco industry challenged federal legislation limiting advertising linked to tobacco products. The industry argued that its marketing targeted adults to convince them to switch brands. The argument was rejected by the Supreme Court of Canada.
The tobacco industry is seeking to reassure smokers to prevent their leaving the market. Young people under the age of 18 are being targeted. What is more, 80 per cent of users start smoking before turning 18.
Thinking that advertising is the only strategy used to recruit young smokers shows a very limited understanding of the situation. The tobacco industry uses many means to make it easy for people to start smoking and become addicted as quickly as possible.
[English]
The Chair: Next, I have la Coalition québécoise pour le contrôle du tabac, Ms. Doucas.
[Translation]
Flory Doucas, Codirector, Coalition québécoise pour le contrôle du tabac: The coalition was set up following the government's decision to cut taxes on tobacco in order to deal with the contraband crisis in the 1990s. Today, we know that that contraband was orchestrated entirely by cigarette makers, including Rothmans.
Following this significant defeat for public health, health groups and civil society in Quebec rallied around the coalition by promising to never allow the industry and its partners to put forth solutions to tobacco-related problems.
The marketing of flavoured cigarillos was disastrous for Quebec. In just a few years, a product resembling cigarettes reversed the trend of tobacco use among young people which had been on the decline for a decade. Philip Morris, the same entity that provided Ms. Steger's evidence earlier, has, in the past, also threatened to take legal action under NAFTA when Canadian parliamentarians were considering standardizing the appearance of cigarette packages, and that was despite legal opinions indicating that there was no basis for such a challenge. Those documents were made public.
Philip Morris takes advantage of the complexity and lack of understanding of agreements like GATT and NAFTA to make unfounded threats. The tobacco products that are popular among young people and that contain additives are different from tobacco products that do not contain additives. Products with flavours are much more likely to please new smokers and to promote the use of tobacco than products without additives. Governments must not grant similar treatment to products which are not the same.
Flavours also affect perceptions when a product is used. For a long time, additives were not used to give products a fruit or candy flavour. Cigarette manufacturers simply added ingredients to tobacco to give it a more pleasant taste or smell, as is done for wine. A wine with a hint of apricot or blackberries is not necessarily a wine containing apricot or blackberries. Those flavours are there to please, to encourage product sales.
A ban on flavours in Canada would be very dangerous for a multinational like RBH, since it would create a world- wide precedent, and given that Philip Morris uses more than 100 flavours in its products. Products destined for other markets or duty-free boutiques should not receive special treatment. If Canada sees the need to ban flavoured tobacco products which contribute to encouraging young people to smoke, it would be immoral to enable Canadian companies to export these very products to countries where they will also be used to effectively encourage young people to develop a deadly addiction.
Canada, like 160 countries, ratified the World Health Organization's treaty to fight tobacco use. The treaty implores its signatories to go beyond obligations, to react quickly and effectively to industry practices and to show solidarity with the efforts undertaken by other nations.
Moreover, the framework convention implores wealthier countries to fund and support tobacco-control measures in emerging countries, namely in southern countries. It is highly deplorable to learn, and we are quoting an article published yesterday, that Philip Morris purchased Rothmans because of Rothmans' capacity to product products for South America.
Representatives of duty-free boutiques and the retail industry argued that American blend cigarettes do not target young people, that strawberry-flavoured cigarillos and sweetened additives in certain American or European brands are difficult to compare. The spokesperson from Frontier Duty Free Association called them apples and oranges. However, independent peer-reviewed research published in scientific journals contains many examples proving the opposite. Namely, two researchers analyzing changes made to Camel cigarettes in the United States between 1983 and 1993 concluded the following:
[English]
Product design changes which make cigarettes more palatable, easier to smoke or more addictive are likely to encourage greater uptake of smoking.
The Chair: Can you wrap up, please? We are at five minutes.
[Translation]
Ms. Doucas: According to evidence by duty-free boutique representatives, sales represent 1.4 per cent; that is similar for airports. As in the case for the H1N1 virus, health interests regarding tobacco control must take precedence over tourism.
What can be said about convenience stores? They are not at all reluctant to sell these cigarillos and blends flavoured with strawberry and chocolate. Even if they were to be withdrawn from the market today, these young people and adults remain addicted to the products and will go back to corner stores to buy cigarettes. Bear in mind that seven out of every ten products or cigarettes consumed come from legal manufacturers.
The Chair: Thank you very much.
[English]
Cynthia Callard, Executive Director, Physicians for a Smoke-Free Canada: From listening to the witnesses earlier, one could get the feeling that this bill has no supporters. However, I have rarely seen any legislation with the depth and breadth of support that Bill C-32 has. The Prime Minister and the Minister of Health gave it priority treatment after the last election. Two provinces have passed legislation of similar effect. There have been private members' bills introduced by the NDP, the Liberals and the Conservatives. This bill is a popular measure across Canada, and for good reason.
I do not know where the numbers you were given earlier today came from. You can obtain the data tape from the Canadian Tobacco Use Monitoring Survey and run your own analysis. We did so and found alarming figures. It is not 6 per cent of kids that use these products. Health Canada told you that 25 per cent of 15- to 17-year-olds use them. The figure is higher with for the 17- to 19-year-olds, high school kids. Of them, 31 per cent, almost one in three, have used these products. Of that 680,000 kids, 200,000 have never tried cigarettes.
It is not true that people go from cigarettes to cigarillos. We have to accept that cigarillos are a gateway drug. Flavoured tobacco products are a gateway drug to regular tobacco use, and that is why we are so concerned.
With the large number of people using these products, they should be blocked. Canada is not alone in dealing with these problems; other jurisdictions are looking at them as well. Like Canada, Australia is a federated state and, like Canada, tobacco there is shared between the federal government and the state. Australia is moving forward. Three states have passed laws. The legislation of the next state that plans to pass a law has far broader measures than Bill C- 32. That bill narrows the definition of "flavours," but it proposes to ban all products that are in a package that may encourage young people to smoke, or that are advertised in a way that may encourage young people to smoke. They are using a different regulatory approach with far more sweeping powers than would be easily accepted by our Parliament.
For the first time, the United States has passed a Food and Drugs Act authority. Last Wednesday, The New York Times had an editorial about the bill. The headline said that it was a cigarette ban with a loophole, referring to the flavours. Two weeks before that, the Wall Street Journal said that the new law is chock full of loopholes and special favours. Philip Morris was widely consulted and is considered to have had a hand on the pen of the drafters of the FDA law. No wonder they are proposing that approach here as an option.
I am not a doctor, and I am not a trade lawyer either. However, working in this field, I have had to look at a lot of trade law, because trade is always used as the objection. Those with objections do not want to talk about health, but rather about trade agreements and jobs. There is always a shift in the debate toward jobs.
From listening here today, one would think this bill contained a ban on American cigarettes. This law does not ban U.S. blend cigarettes. As Health Canada tried to explain last week, U.S. blend cigarettes are already on the market without these additives in them.
I included in the kit we sent to you a news articles from 1989. In 1989, Health Canada told all tobacco companies that they had to tell Health Canada what is in their cigarettes. The Americans said, Oh my God, if we tell you, you will tell everyone and our secrets will be out.
The two American companies that were operating at that time, R.J. Reynolds and Philip Morris, had different approaches. R.J. Reynolds decided to take the additives out of their American blend cigarettes sold in Canada and Philip Morris decided to withdraw their cigarettes. I have included clippings about that item.
R.J. Reynolds, which is now Japan Tobacco International, JTI, just to make the story more complicated, told journalists at the time that it was a completely different recipe, that it had a slightly different taste but that in their research, consumers had not seen the difference.
The companies have already shown that in response to regulations, they can reformulate their cigarettes. This legislation is not a de facto ban. The Technical Barriers to Trade Agreement do not come into play. In fact, I would argue that if you exempted American blend cigarettes from one purpose of the law but not the others, you would create trade discrimination, because these cigarettes are like products. That is like saying that lager beer must have a health warning but ale does not, or that cars from India do not need air bags because they are not sold with air bags in India and that restriction would be discriminatory. We create health and safety laws that must apply to all products.
It would be ironic if we passed this bill to close loopholes in the law and ended up seeing products like these ones on the market. It would be ironic and absurd to include loopholes that will be exploited.
My colleague says that there is always a human shield. Tobacco companies do not come here directly. We do not have management here from Philip Morris or Rothmans, Benson & Hedges. They are not put in a position where they must answer your questions directly about their business plans. There is a human shield of workers who have been told that suddenly their jobs are under threat.
I think tobacco jobs are at threat. It is a problem that those jobs existed in the first place. We need a managed strategy, but I know that to keep people smoking in order to keep people working is not the intention of this Parliament.
[Translation]
Rob Cunningham, Senior Policy Analyst, Canadian Cancer Society: Mr. Chair, on behalf of the Canadian Cancer Society, I thank you for the invitation to appear today.
[English]
You have received our written brief and I will refer to it in my presentation. Our considered recommendation to the committee is to urge respectfully that the bill be adopted without amendments. The bill contains an important provision banning tobacco advertising in newspapers and magazines. We have presented to the clerk evidence for your review supporting that part of the bill. This bill will bring Canada closer to the international standard with respect to tobacco advertising, and we support that move very much.
With respect to flavours, we agree with the testimony you heard from Health Canada at your last meeting that the proposed amendment raised by Senator Rivard will create a loophole. We have studied the Australian legislation and the U.S. legislation, and we can learn from it because it has proven to be inadequate.
At Tab 17 of the binder we provided, we have included a news report from Australia this month, wherein researcher Bill King describes how cigarettes in Australia contain sugar, cocoa and licorice. We do not want that. We do not want a combination of flavours to make cigarettes taste better and easier to smoke, even though the cigarettes might not taste overtly like chocolate. We do not want to create a loophole that tobacco companies can exploit, and we know that they have a history of exploiting loopholes. Their lawyers will argue determinedly that even though there may be a lot of flavour, it is not a characterizing flavour and they are allowed to add it.
Some of the Australian state legislation even allows alcohol such as rum, a spice such as cinnamon, or an herb such as mint. The tobacco industry may come up with another idea, and we would not like there to be a loophole that would allow that.
At your last meeting, we heard about Winston and Camel cigarettes, as an example of U.S. blends. At Tabs 6 and 7 of our written material, we have reports about the added ingredients in Winston and Camel cigarettes submitted to the British Columbia Ministry of Health Services. These cigarettes are U.S. blends without the flavours that would not be prohibited by this bill. These reports show how U.S. blends can and have been sold in Canada without flavours. The blends can be reformulated for the Canadian market, in the same way that foreign companies have packaging with bilingual health warnings, with pictures, just for Canadians.
We heard about duty-free stores and that $2 million of $139 million is 1.4 per cent. Is that amount a serious effect on the duty-free sector as a whole, especially when a proportion of those cigarettes can be reformulated, and potentially already are reformulated, without the flavours banned by this bill?
It is interesting that Statistics Canada and U.S. trade data for 2007-08 report no, or next to no, burley tobacco exported from the U.S. to Canada. To the extent that burley tobacco is used in Canada, it tends to come from other countries.
Where does this trade concern of U.S. tobacco belt interests come from? I submit respectfully that it has been manufactured out of thin air by Phillip Morris as a political effort to oppose this bill, and the data is included at Tab 8 and Tab 9 of our binder.
On the international trade issue, I note that the Department of Justice has testified that this bill, in the view of the department, is consistent with trade agreements. We have standards for all kinds of products — fridges, children's toys, milk and automobiles. Other countries and their companies can export to Canada; they have only to meet Canadian standards. This bill as drafted is necessary. It does not go further than necessary. We can learn from experience in other countries. There is no treaty or legal right to add flavours to an addictive, poisonous product to make it taste better. The Minister of Health's recommendation to Parliament is one that we agree with.
Phil Jansson, Youth Facilitator, Eastern Ontario Area Youth Coalition: I come before you today representing youth from across Eastern Ontario who, for the past year, have been campaigning to raise awareness to our peers and to our nation's lawmakers of the dangers of flavoured tobacco and its repercussions on youth smoking rates in Canada. Youth are standing up against the tobacco industry to stop this deceitful marketing, and we have been doing so for years.
Over the past few months, as mentioned by Senator Keon at the previous meeting, we collected over 10,000 signed postcards in support of the ban of flavour additives in tobacco, 7,000 of which have already been presented to the federal government. I will now show you the remainder of the signed postcards, and the clerk has two more packages this size in support of this legislation. To see this legislation about to come into action is phenomenal, and speaks to the power and determination of youth across Canada.
On behalf of Canadian youth, I commend our current government and Minister Aglukkaq for proposing this bill to the house back in June. As it stands, I believe Bill C-32 will greatly decrease the number of youth trapped in the deadly addiction that is tobacco. This bill will stop the tobacco industry dead in their tracks from marketing their products to the most vulnerable group in society, namely, youth.
Some people may not realize it, but tobacco is one of the only products that will kill when used as intended. Half of tobacco users will eventually die from it. The use of flavours in tobacco in its many forms is an easy way for big tobacco to hook new victims, young and old. As you may know, in too many cases, youth will begin using flavoured tobacco in the form of cigarillos and other varieties at parties and various social events. Flavoured tobacco, from my experience, is one of the most popular tobacco products seen at parties. Picking up a PrimeTime or a Colt from a friend is an easy way to start. The attractiveness and flavour make it seem like it is not tobacco at all. Flavoured tobacco, despite its tropical, fruity appeal is no healthier and no less addictive than any other form of tobacco. Flavoured tobacco is a gateway to a lifetime addiction.
In 2003, a study in 50 Ottawa high schools asked youth who considered themselves smokers why they smoke. One of the two most popular reasons was because of social events and parties. In 2008, the Canadian Tobacco Use Monitoring Survey reported that cigarillo use among youth is alarmingly high. Among those aged15 to 19, current smoking of cigarillos was reported at 9 per cent, and those who ever tried it was 31 per cent. The rates among those aged 20 to 24 were even worse, at 12 per cent currently smoking and 48 who had ever tried it. Moreover, people between the age of 20 and 24 are still youth.
Other studies have proven that only one cigarette can kick-start a deadly addiction, and that 80 per cent to 90 per cent of smokers start below the age of 18, and that is a critical point.
Let us stop big tobacco before it attracts more lifetime customers, and we can do that with this legislation. Bill C-32 represents a significant step in tobacco prevention.
In 1989, tobacco companies were required to list the additives in cigarettes. In 1993, the legal age to buy cigarettes was raised from 16 to 19. In 2000, Health Canada was the first to introduce graphic health warnings on cigarette packages. In 2001, then Minister of Health, Allan Rock, proposed the legislation to prevent cigarettes from being marketed as "light" or "mild." He noted that tobacco companies had been deceiving the public since these terms were introduced in the late 1970s. Currently, display bans are popping up in several provinces, keeping tobacco products and their slick advertising out of sight and out of mind.
This legislation before you today is the next major step in tobacco use prevention and the protection of youth from this deadly industry.
Bill C-32, as it stands today, is paramount in preventing youth from picking up this deadly addiction. I urge to you support this legislation as is, without amendment, to exclude American blend tobacco. Any amendments made to this legislation will defeat the original purpose of this bill. As recently announced by federal Minister of Health, Leona Aglukkaq, this type of tobacco represents only a minute 0.5 per cent of sales in Canada. If we can ban flavoured American blend tobacco, it is one less product on the market to hook a young person or to keep a tobacco user addicted, and one less product that could take away someone's mother, uncle or grandfather. Ultimately, it is one less window of opportunity for tobacco companies to use and abuse. This deceitful marketing tactic used by the tobacco industry needs to stop today, and you, honourable senators, have the power to make this happen.
I can say confidently that those around this table care deeply about the health and well-being of Canadians, youth and adults alike. As our nation's lawmakers, I implore you to support this bill to protect Canada's future, my peers and our youth. What you can decide today will have an impact on the health and well-being of Canadians for many years to come.
The Chair: Thank you very much.
I will start with a couple of questions. My first one will go to the last speaker, Mr. Jansson. We have heard about contraband from a number of people. This bill, Bill C-32, does not deal with that issue. Tell me what you find is the situation with respect to contraband amongst youth, and how you think Bill C-32 will affect that situation. Will it mean that more of these colourful cigarillos with their tastes will show up in the contraband market? What do you think?
Mr. Jansson: I agree that the contraband issue is a problem in Canada. I know in high school there was a problem. However, youth of all ages will not start with contraband. Flavoured tobacco is the problem. I do not think that youth will move to contraband tobacco. The way to start would be the easier-to-smoke products, the ones available on the market today.
The Chair: Let me ask the other panellists a question, whoever wants to weigh in on it, and then I will go back to the justification for treating American blend separately from Canadian cigarettes. We can agree that both are bad for you, and they will both affect health, but what is the justification for treating one differently from the other?
Mr. Brousseau, the representative of the union who was here, said the smell is the same — it smells like tobacco. The product may have these additives, but they are a minor part of the product. The product is still similar. However, the industry says that the reason for those additives is to deal with the bitterness of the American blend.
We can argue that they can change the recipe. I think Ms. Callard said it, and, in fact, one of the companies has made that change. However, given that the American blend has only 1 per cent of the market, it does not sound like something they would do for the Canadian market in any event.
It comes down to this matter of what is happening in the Quebec plant, namely, the 300 jobs and the exporting of the product. The plant imports burley tobacco, manufactures it and then exports it back to the United States or wherever.
Why is it fair to ban those American blend cigarettes from that particular process, as you suggest?
Ms. Callard: We have not been clear because we want all cigarettes to be treated the same way, and we think treating everything the same is consistent with the usual approach to health regulation and trade law. It is true that more American blended cigarettes will have to reformulate than will Virginia-style cigarettes.
We do not want a law that puts one set of regulations in place for American blend cigarettes and another set of regulations for Virginia-style cigarettes. If you enact a law for American blend cigarettes, then European blend cigarettes or someone else will come along and say, that law discriminates against us: We want to be able to use cocoa as well; these products are alike. Then, they will trot off to some arbitration process and make that claim, opening the exemption that was given — if it is given — for American blend cigarettes to all forms.
Mr. Damphousse: I also raised the argument earlier about why companies are fighting so hard to keep those additives in those products. The purpose of those additives is not only to impart a flavour to the tobacco smoke. If you look at internal industry documents, they have a vast knowledge of what they can do with their cigarettes. If you open the door to letting them look around and keep researching all these additives, they will. Lowering the nausea effect of starting to smoke by using an additive is enough to encourage children to start smoking. I do not know if any of you started smoking when you were children. The first thing you do when you start smoking a cigarette is to become nauseated. Manufacturers try to reduce that nausea to ensure that you are addicted eventually.
For example, sugar seems innocuous. When you eat it, it is innocuous, but when you burn it, it is a totally different issue. The combustion of an organic material like sugar releases other compounds; acetaldehyde is one of those compounds. If you combine acetaldehyde with nicotine you increase the absorption of nicotine. It is unacceptable to allow the tobacco industry to find ways to increase nicotine absorption, especially when they are trying to encourage children to smart smoking. That situation should not happen; the industry should not have that liberty for any types of tobacco.
Mr. Cunningham: It may be only 1 per cent now; we do not want that number to grow. It is a concern to hear the testimony from the union that Philip Morris has plans to expand the flavoured brands in Canada. We do not want that situation. Ten years ago, flavoured cigarillos were essentially a non-issue in Canada. Look how they have grown. Tobacco companies know how to exploit things. We do not think they should have that opportunity.
Senator Keon: The Canadian Medical Association could not be here today and the association has asked me to table a request with you for support of this legislation without amendment. I want that information read into the record.
My questions are to Mr. Damphousse and Ms. Callard. The major message coming to us concerns the economic effects of this bill. It will put people out of work; it will put a plant in jeopardy in Quebec, and so forth.
British Columbia has instituted a suit against the tobacco companies for cost recovery of health care costs of dealing with all the people affected. Ontario took the same action yesterday. There seems to be a broad-based consensus that all the other provinces will follow suit. When this activity is over, there will be a large number of class action suits from patients who have died of smoking-related disease. Canada will become an unfriendly place for cigarette companies.
Is there a credible economic argument at this time?
Mr. Damphousse: In the brief I submitted, I included material from economic experts. When they looked at the tobacco industry as a whole in Canada, the industry is not much of an economic power.
Your goal as a government is to reduce consumption. Health Canada testified two weeks ago that you cannot protect the tobacco industry while trying to reduce tobacco consumption. One has to give. You have a decision to make as to which you want to protect.
What happens when you lower tobacco consumption? People have more money to spend on other goods and will stimulate other sectors in Canada. In the long run, Canada will be better off.
In regard to jobs, a lot of the jobs have already been lost over time because of modernization of tobacco plants. The people who have been laid off are retiring, and they simply do not replace them.
Let us not forget what happened with Imperial Tobacco. Imperial Tobacco shut down their three manufacturing plants in Canada although they had the largest workforce in Canada. They moved all their jobs to Mexico. Why did they do that? It was because the only way to increase their benefits was by lowering cost. Labour costs in Canada are high for the tobacco industry. This move will also happen eventually with Rothmans and Benson & Hedges. Philip Morris made that announcement to threaten you — it is blackmail. However, it will happen regardless of what you do.
Ms. Callard: They have been successful in the debate on Bill C-32 using the same strategy they have used for 40 years. You would think we would have a better approach to it.
They want to shift the debate into economic issues instead of having a further discussion about the issues that Mr. Damphousse raised about how these additives increase the nicotine hit, how they increase the amount of free nicotine, how they increase the time it takes for nicotine to hit the brain, and how they change the pH balance of the cigarette to allow nicotine to be inhaled further into the lungs so it goes into the blood faster. Instead of talking about those issues, we are worrying about retailers, duty-free shops, workers and farmers.
The industry has shifted the debate entirely away from the health purpose into an economic argument. Companies do this every time. It is about advertising. It is not about whether lifestyle advertising encourages people to think smoking is a good thing. It is about whether sponsorship will fold and no one will have a good summer. This approach is typical of the industry.
As a result, umpteen studies have been done demonstrating the economic harm to the economy, government revenues and society from tobacco use. Those studies never factor into the debate when an individual comes and says, if you pass this bill, it will cost me my job. These human shields used by the industry are powerful. We should not be surprised that the industry continues to use them. We must remember them in the context of the overall problem.
[Translation]
Senator Pépin: Bill C-32 exempts menthol as a flavour for tobacco. Health Canada told us that the use of menthol products was on the decline. Nevertheless, adding menthol to a cigarette appears to give it a better flavour. I would like your views on the exemption for menthol in Bill C-32. As far as you know, what impact has menthol had on tobacco use? Is banning fruit- and candy-flavoured cigarettes not likely to make menthol cigarettes an alternative for young people?
Mr. Damphousse: That was the subject of considerable debate in the health community when the bill came out and we saw that there was an exemption for menthol. We grappled with whether or not to ask for an amendment. The question is a strategic one. In the end, we deemed it unnecessary given the low percentage that would represent. However, it is a concern, because menthol is not only a flavour. It is a very mild topical analgesic and that can encourage people to smoke cigarettes. So it is nonetheless a concern.
Senator Pépin: More so than fruit?
Mr. Damphousse: It is a concern, and we do not necessarily agree with the exemption. The amendment is limited to fruit and candy. As Mr. Cunningham mentioned, there are a host of other flavours like spices and cinnamon that can be used. JTI-Macdonald marketed a whiskey-flavoured More cigarette. That is another flavour that can be used if an amendment of that nature is granted. We clearly want as broad an amendment as possible. However, decisions have been made within our community as to whether or not other amendments will be proposed.
Ms. Doucas: I would perhaps go a bit farther. The bill is not perfect. You mentioned the exemption for menthol. There is also an exemption for smoke-free products like chewing and snuffing tobacco. The bill contains a mechanism making it possible to add these products. When we saw that, we decided that if we did not get it this time, we would continue to make our representations.
Unfortunately, it would appear that more people need to be addicted to these products before Health Canada steps in. But it is better than what we have now with the absence of regulations. As was pointed out, we were already seeing the effects of these products on young people; so it reversed a trend that was on the decline.
Senator Pépin: I will ask Mr. Jansson what he thinks. Do you think that menthol cigarettes will become more attractive if the others are banned?
[English]
Mr. Jansson: In my experience, I have not seen many youth using menthol cigarettes. Unfortunately, they are not included in the bill. I might see that omission as a possible loophole by industry to target youth, as they have been targeted.
[Translation]
Senator Segal: Ms. Doucas, you said that your organization was set up when taxes were reduced to fight contraband. These tax cuts led to an increase in use among young girls and others who started to smoke.
The problem with contraband still exists. When we questioned Health Canada officials on this subject, they responded that they were not responsible for contraband in their department.
Here is my question: are we creating a solution that may lead to a new problem? In your view, are we resolving a problem regarding the various flavours by giving officials the overarching power to add whatever they want without referring to Parliament nor to elected officials?
And if we do that and this act is successful, will that create a huge market for contraband which is beyond the purview of this committee? Will your problem remain as difficult as it is now, because currently legal products will be replaced by a product that is 100 per cent illegal and distributed by people who do not pay taxes and do not create local employment?
We want to act as rapidly as possible to protect the public. However, if we act very rapidly and without any amendments as you suggest and if that does not help to solve the problem or even makes it worse, where would we be? What would be your advice for legislators who are trying to find the most efficient way to proceed?
Ms. Doucas: I am encouraged by the fact that you are concerned with the issue of smuggling. One does not exclude the other. All of us here are working on smuggling and we are concerned by this issue, but we are also concerned with flavoured products. Let us note that they are sold in units, in packages of five, in packages of three and in packages of ten.
When I go to convenience stores, I want to know what the new flavours are. This is how we learn, by asking. A package of cigarillos is much more expensive than a pack of cigarettes. We know that young people prefer these products. They are easier to consume. They look inoffensive and harmless. Young people have been educated with regard to cigarettes, and despite the current rate of smuggling, we still see some decline among the younger population. Once the lessons have been learned, the anti-tobacco programs and the existing measures do work. We must keep that up and we must continue regulating. Now, we have gotten around to regulating the products. We must go forward. We can see that we are succeeding.
With regard to smuggling, we are the first to ask for a series of measures to prevent it. Let me tell you that the Tobacco Act is not the right instrument to do this, in the way it is currently drafted. We must revoke licenses and raise the awareness of the American authorities so that they can also intervene. Very often, the factories are on the American side of the reserves.
Without going into the entire debate about smuggling, I do not think that we are transferring the problem somewhere else. Smuggling remains a problem. For the time being, there are little or no cigarillo products on the contraband market, despite the fact that they could certainly be profitable.
Let me tell you that we have noted that young people continue buying tobacco products in fancy expensive packages. The industry is relying a great deal on the new packages for cigarettes. They look like iPods; they bear no resemblance to the big packages of our grandparents. Young people are still attracted by beautiful objects; a big Ziploc bag is not practical for a young person.
[English]
The Chair: We have a substantial audience tonight, to the point of overflow in the committee room. We are coming up to six o'clock, which is our normal adjournment time, but with your concurrence I am prepared to continue. No other committee is scheduled to convene in this room this evening but some senators have obligations to attend committees in other rooms.
Mr. Damphousse: I appreciate your raising the issue of contraband, which is a major concern for the health community, because we know that taxation is one of the most effective measures in lowering tobacco consumption. We have been working hard since 2002 to brief government officials and politicians on this issue. We have met with people, held media interviews, and were consulted before the Standing Committee on Public Safety and National Security. As well, we consulted with the RCMP's national strategy on contraband. On that strategy, you will find the names of our organizations — the Canadian Cancer Society, Physicians for a Smoke-Free Canada and Non-Smokers' Rights Association. I will give you our brochure containing specific recommendations to deal with this issue. The Conservative government has introduced measures in the budget to deal with the issue, but is it still a problem? Yes, it is still a problem. We will continue to fight and to ask for stronger measures to deal with this issue.
Another issue raised not only today but also at your last meeting is that we are granting tremendous power to Health Canada with this bill, which could add other substances later on. You must understand who you are dealing with. The tobacco industry is effective in its research and in finding ways to discover new chemicals to increase the effective properties of their products. It is my opinion that Health Canada should have the authority to act as quickly as possible to prevent tobacco manufacturers from developing new solutions. Rather than go through the whole process of introducing new legislation to protect our public, we need that type of authority, which we have for other consumer products under the Hazardous Products Act or the Food and Drugs Act.
Senator Ogilvie: One important issue did not surface in any of the documents that I reviewed or in much of the testimony, but was broached in the responses of two or three witnesses to the questions. To preface the specific comment and question, the issue is the effect of heat, including flame, on chemicals. We only need to think about the warnings we read with regard to barbecuing fatty steaks and the idea of what happens to fat when it drips onto a hot burner. It is converted into carcinogenic compounds that can be absorbed by the meat or sent into the atmosphere.
Of great interest to me are the detailed studies available on what happens to otherwise innocuous compounds, such as sugar and acids, when they are burned at the end of a cigarette. At the least, we know that they become volatile and are taken into the body in that form. Most likely in the presence of heat and oxygen, they are converted into subsidiary chemicals that have a wide range of impacts. Are you aware of any detailed studies with regard to the chemical conversion of the additives currently used, or potentially used?
Mr. Damphousse: I will forward you research that reviews tobacco industry documents, the purpose of the additives and what happens when they are burned. This argument is a great one. Some of our opponents say that some of these additives are used in food and that they are totally safe. However, it is one thing to ingest food designed to break down those chemicals and take advantage of them and another thing to burn and inhale them. Our lungs have not been designed to inhale tobacco smoke or any other organic compound that is burned. It might be innocuous in the beginning but, once burned, it will release carcinogens. You must be concerned about that situation. The comparison by our opponents is a bad example.
[Translation]
Senator Rivard: I have two concerns: one of them is a moral concern: we must be concerned with the health of the Canadian public, the number of smokers should continue decreasing and ideally, there should not be any at all — every country in the world has the same objective. My other concern is economical; if the bill is adopted, it means in the short or in the long term, the closure of a factory in Quebec which will cost 330 jobs, or 330 unemployed families.
The solution would be to adopt the bill so that the products that do not meet the new standards of Bill C-32 can only be exported and cannot be sold in Canada. What do you think of this?
Mr. Damphousse: I do not share your opinion regarding the loss of jobs. I explained in my brief that those jobs would be lost in any case. This is unavoidable due to the decrease in consumption. It will not happen right away unless Philip Morris International decides to cut its production costs by moving its factory somewhere else. However, most of the cigarettes produced by the Rothmans, Benson & Hedges Inc. factory in Quebec are made with Virginia tobacco. Thus, it is not at all affected by this bill. As my colleague said, they could just as well make cigarettes with American tobacco and sell them in Canada without any problem.
With regard to exports, you have a moral obligation to ensure the protection of public health not only here, but also on the international level. Now you have signed on to the framework convention for the anti-tobacco campaign which is an international treaty. You ratified it and there are very strict provisions in the treaty whereby we must pay close attention to the influence of the tobacco industry, its activities in Canada and also abroad.
Eventually, the jobs that will be lost because of the gradual reduction in tobacco will be lost through attrition and people will spend their money on other consumer goods that will stimulate other sectors of the Canadian economy.
[English]
Mr. Cunningham: Earlier today, the chair referred to clause 9 of the bill with respect to the Governor-in-Council and whether that might be a mechanism to permit exports. Clearly, our policy recommendation is not to permit export of flavoured cigarettes.
[Translation]
You were wondering whether the factory would close down. At this time, one per cent of the output consists of cigarettes containing an American blend with flavouring. Is it realistic to think that a factory could close down because of one per cent of its output when over the years, the reduction in tobacco sales is much higher than one per cent? We heard similar statements in 2000, when Parliament was considering a regulation for providing warnings with photos. Rothmans said that printers would lose jobs, that it was impossible to print coloured photos on cigarette packages in Canada, that the jobs would go to the United States. When the regulation was adopted, no jobs were lost. It was possible to print packages in Canada. This is how history never stops repeating itself.
[English]
The Chair: I thank the witnesses for appearing before the committee.
I will outline for senators the possible options to deal with the bill and then move to discussion.
First, other people have requested to speak before the committee. With the staff, I tried to sort through the lists for a cross-representation of people with different perspectives so that we could hear all the perspectives. There is no doubt other people want to appear. We can always have another meeting with the people that have requested to come, and have more witnesses. I do not think we can have them all, but we can if you want to. A suggestion was made even that we have the RCMP or other police authorities here to talk about ramifications of this bill with respect to contraband.
Second, there are also Health Canada officials. We can have them back, although I see that Paul Glover is here. If we want to question these officials further, we can do that at a subsequent meeting. We do not have time today. That is a possibility for another meeting.
Third, if committee members want to proceed today with clause-by-clause study, there are three possibilities in that connection as well. First is clause-by-clause study without amendment. We can probably finish that today in the time frame we have left because the bill is not a big one. Second, there are possibilities of amendments if anyone wants to move an amendment. Third under the clause-by-clause category is to have an observations report that can include the possibility of requests or suggestions relevant to the use of the Governor-in-Council in terms of regulations or exemptions as per clause 9 of the bill.
If we include either amendments or an observations report, I think we need another meeting. These issues are controversial.
The only thing I can see proceeding with today is a clause-by-clause study of the bill without amendment. However, I am in your hands. I need to hear from you as to how you want to proceed.
[Translation]
Senator Rivard: I suggest that we do the clause-by-clause study and that we finish with this bill tonight.
Senator Pépin: I would be willing to do that, but I would rather we do it amongst ourselves than in front of the television cameras. Are we going to do that in front of the TV cameras?
[English]
The Chair: We are required to consider the bill in public. We do not need the television cameras, but the people here can stay. We are required, as I understand it, to study this in public. It is a bill.
Senator Stratton: Yes.
The Chair: It is different from a report.
Senator Stratton: No.
The Chair: I will bow to Senator Stratton on this matter.
Senator Stratton: This is a public hearing.
Senator Pépin: This meeting is a public hearing.
Senator Stratton: Yes, we will keep the meeting as a public hearing. We will not suddenly change the way we operate.
The Chair: I thought in camera was a requirement. This committee deals with many reports. We prepare those reports in camera.
Senator Stratton: That is a different thing.
The Chair: Maybe there is confusion between bills and reports. We are dealing with a piece of legislation, and we are required to deal with it in public.
Senator Stratton: Absolutely.
Senator Ogilvie: I am not exactly sure of the rules under which we operate. However, based on my experience in other areas, to move this discussion forward, I move that we proceed to clause-by-clause study without amendment.
The Chair: Amendments can be moved. We cannot predetermine whether amendments will be moved, but if we are to propose amendments, then we should seriously consider not finishing at this meeting.
Senator Ogilvie: I understood you to put three choice choices before us. I was moving the first choice.
The Chair: Okay; Senator Segal, do you want to make a point on procedure?
Senator Segal: I am prohibited from doing so out of loyalty to my government. I will not make the point.
The Chair: Okay.
Senator Cook: For clarification, do we know if any amendments are forthcoming?
The Chair: I do not know until we go into the dialogue of clause-by-clause study. If amendments are put, we can make a decision then on whether we want to adjourn to a further meeting to contemplate the amendment or simply to vote on it at this point in time.
Senator Cook: I move we proceed.
The Chair: Does anyone else wish to speak on procedure before we proceed to clause-by-clause study?
Senator Eaton: I think we should simply move on.
The Chair: Okay.
Senator Segal: I have a point of order, Mr. Chair. Are members of the committee allowed to abstain on specific clauses as they are addressed by the committee?
The Chair: Yes, I think so. That is a procedure in the Senate. I think it applies here as well.
Senator Segal: Thank you.
The Chair: Unless I am asked for recorded votes, I do not particularly recognize specific people — either yea, nay or abstain — unless asked for a recorded vote.
The clerk tells me that committee members can indicate that they want to abstain.
[Translation]
Senator Rivard: Mr. Chair, I would like to know, if we proceed with the clause-by-clause study, whether we could bring to the table some people from Health Canada in case we need to clarify a point. We could put questions to the people who drafted the bill to make sure that we understand it properly. Otherwise, must we just approve it without question?
[English]
The Chair: It is not normal procedure. However, if members of the committee want to have Health Canada officials at the table, we can. May I hear from other committee members?
I am seeing negative head shakes. However, the officials are here.
I have your thoughts and opinions. Is it agreed that the committee proceed to clause-by-clause study for Bill C-32, An Act to amend the Tobacco Act?
Hon. Senators: Agreed.
The Chair: Carried.
The Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 1, which contains the alternative title, stand postponed?
Hon. Senators: Agreed.
The Chair: Shall clause 2 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 3 carry?
Some Hon. Senators: Agreed.
Senator Segal: I want to note my abstention on that clause. That one gives the Governor-in-Council any power they might ever want at any time.
The Chair: Okay.
It carries with that abstention noted.
Shall clause 4 carry?
[Translation]
Senator Rivard: Mr. Chair, I would like to get a point clarified by the representatives of the Department of Health.
[English]
The Chair: Do members agree to Senator Rivard putting a question to the representatives of Health Canada on clause 4?
Hon. Senators: Agreed.
The Chair: Mr. Glover, do you want to take a seat at the end of the table with your officials?
[Translation]
Senator Rivard: I wrote my question down to make sure that it is very clear: is Bill C-32 targeting the banned additives that are used to make products solely for the Canadian market? Does this clause apply to products meant for export?
[English]
Paul Glover, Assistant Deputy Minister, Healthy Environments and Consumer Safety Branch, Health Canada: Bill C- 32 is designed to address public health concerns within Canada. It is designed to prohibit certain additives such as flavours from being used in little cigars, cigarettes and blunt wraps because they serve as an inducement to smoking by Canadian youth.
Bill C-32 contains clause 4 that is meant to target prohibited additives used in the manufacturing of products solely for the Canadian market. This view is consistent with the 1997 Tobacco Act, which gives the government the authority to establish product standards that apply to products manufactured for the Canadian market. It is up to other countries to determine whether banning flavours or additives from tobacco products meets their public health tobacco control objectives. Other countries are already working on this issue. It is the Government of Canada's policy intent that the tobacco products manufactured in Canada solely for the export market will be permitted.
The Chair: They will be permitted. Thank you very much.
I will proceed to the next question.
Shall clause 4 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 5 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 6 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 7 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 8 carry?
Some Hon. Senators: Agreed.
Senator Segal: I will abstain on that clause.
The Chair: Senator Segal abstains on clause 8.
Is that agreed that clause 8 carry?
Some Hon. Senators: Agreed.
The Chair: Shall clause 9 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 10 carry?
Senator Segal: I am sorry; I did not read fast enough. I will abstain on clause 9 as well.
The Chair: All right. Oh yes, that is the famous clause 9.
Senator Pépin: I abstain on that clause as well.
The Chair: Senator Pépin abstains on clause 9 as well.
Senator Fairbairn: I abstain.
The Chair: Anyone else?
With those abstentions, shall clause 9 carry?
Some Hon. Senators: Agreed.
The Chair: Carried.
Shall clause 11 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 12 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 13 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 14 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 15 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 16 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 17 carry?
Hon. Senators: Agreed.
The Chair: Shall clause 18 carry?
Senator Segal: Because we have heard massive evidence of insufficient and unfair consultation practices, I will abstain on clause 18.
The Chair: Clause 18 is the coming into force clause.
With the abstention of Senator Segal, shall the clause carry?
Some Hon. Senators: Agreed.
The Chair: Shall the schedule carry?
Hon. Senators: Agreed.
The Chair: Shall clause 1, which contains the alternative title, carry?
Hon. Senators: Agreed.
The Chair: Shall the title carry?
Hon. Senators: Agreed.
The Chair: Shall the bill carry?
Some Hon. Senators: Agreed.
Senator Segal: I will abstain on that vote as well.
The Chair: Does anyone else wish to abstain?
The bill is adopted.
Does the committee wish to proceed in camera to discuss observations to append to the report without amendment?
No one wishes to do that.
Is it agreed that I report the bill to the Senate without amendment and without observations?
Some Hon. Senators: Agreed.
Senator Segal: I abstain.
The Chair: That completes the business before us. The bill is adopted without amendment and will be reported to the Senate.
(The committee adjourned.)