Canada: Tobacco industry may have to bear the costs of its activities

Canada may soon adopt legislation allowing the imposition of an annual cost-recovery levy on the tobacco industry, as suggested in the Fall Economic Statement. Such a measure, based on the same principle as the polluter-pays principle, has already received support from public health NGOs, which have offered their support to the government.

Presented on November 21, the Fall Economic Statement includes a draft bill on imposing cost recovery fees on the tobacco industry. The government proposes to amend the Tobacco and Vaping Products Act to "implement a tobacco cost recovery framework."[1]While the implementation of such a system remains highly hypothetical, and the amount of this levy is still unknown, this draft bill has received the support of those involved in the fight against smoking, starting with the Canadian Lung Association, the Canadian Cancer Society and the Quebec Coalition for Tobacco Control.

A measure already implemented in Canada for cannabis

In concrete terms, a cost recovery fee operates on the same model as the polluter pays principle, in that it aims to have the tobacco industry bear the costs related to Canada's federal tobacco control strategy. As the Canadian Cancer Society points out, an annual recovery fee has already existed in the United States since 2009, allowing the Food and Drug Administration (FDA) to recover $712 million, or approximately €655 million per year. The system has also existed in Canada since 2018, but to recover the federal government's costs related to legislative, educational, and program management initiatives on cannabis.[2].

The challenge of monitoring Canadian provinces

This measure was particularly supported by anti-smoking NGOs, as it should allow Canada to invest in sustainable public health policies. However, the draft bill would be limited to Canada's federal strategy, leaving it up to Canadian provinces to impose their own cost recovery fees. Furthermore, the Quebec Coalition for Tobacco Control emphasizes the importance of making manufacturers pay for government investments related to the regulation of vaping and nicotine products, as well as for efforts made in the fight against illicit trade.[3].

Canada's 2035 Tobacco-Free Generation Goal

In 2018, the federal government presented its tobacco control strategy, unveiling its ambition to reduce smoking prevalence below 5% by 2035. To this end, Canada has committed to providing 330 million Canadian dollars (or 220 million euros) over a period of five years to tobacco control. This tobacco-free generation goal, while ambitious, is considered "realistic" by Terry Dean.[4], President and CEO of the Canadian Lung Association: Currently, there are 3.8 million smokers in Canada, or 12% of the population.

Keywords: Canada, Fall Economic Statement

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[1] His Majesty the King in Right of Canada, Fall Economic Statement, 2023, (accessed 11/22/2023)

[2] Canadian Cancer Society, Annual recovery fee for tobacco companies a welcome measure to hold the industry accountable, 11/21/2023, (accessed 11/22/2023)

[3] Quebec Coalition for Tobacco Control, Green light to introduce pricing for manufacturers that would require them to pay the cost of investments related to tobacco regulation, 11/21/2023, (accessed 11/22/2023)

[4] Canadian Lung Association, Canadian Lung Association applauds draft federal legislation to impose cost recovery fees on the tobacco industry, 11/21/2023, (accessed 11/22/2023)