Minister of Health and Social Services, Lesa Semmler, issued the following statement today supporting the court-filed proposed plan for tobacco compensation:

“I am announcing a key step in our effort to recover money for our healthcare system from the cigarette companies that we claim misled Canadians for decades and caused increased healthcare costs. This legal process has already been long and complex, and we are pleased it may be moving toward a conclusion. 

“Ontario Chief Justice Morawetz, who is presiding over the court proceedings involving the tobacco companies, directed that the court-appointed mediator, former Ontario Chief Justice Winkler, and the court-appointed monitors of the tobacco companies, propose a Plan of Compromise and Arrangement that is fair and reasonable to resolve the tobacco litigation. On Thursday, October 17, that requested plan was filed with the courts. 

“To be clear, this is not a settlement, and the matter is not concluded. The proposed plan is the result of the efforts of former Chief Justice Winkler to negotiate a final resolution of the tobacco companies’ CCAA (Companies’ Creditors Arrangement Act) proceedings which have been ongoing for more than five years when the tobacco companies sought CCAA protection and expressed their desire for such a resolution. 

“Following years of mediation with the companies and creditors, the court-appointed mediator has determined the plan is an appropriate resolution in the circumstances.

“The Northwest Territories supports the plan, as well as a process to have it voted on by creditors, adjudicated by the CCAA court and implemented as expeditiously as possible. This matter pertains to alleged past wrongful practices by the tobacco companies from the 1950s through the 1980s. Those practices resulted in extraordinary costs to our healthcare system and we set out to recover those costs. The litigation that led to this plan commenced many years ago, and the mediation itself has lasted five years.  

“The plan requires all parties to compromise but we are satisfied with its terms. Under the plan, over time, the tobacco companies would be required to pay a total of $32.5 billion.

"This will:

• Here in the Northwest Territories under the plan, we would receive a total of at least $185 million, with approximately $45 million upfront and $140 million in the future. 
• Provide meaningful compensation to individual victims of smoking.
• Expand research into cancer and smoking-related illnesses, and other programs.
• Provide clear accountability by the cigarette manufacturers for past wrongful practices.

“This $32.5 billion plan builds on the work being done here in the Northwest Territories and nationally to reduce the number of Canadians who smoke. Government efforts have included education campaigns about the dangers of smoking, raising the cost through taxation, placing limits on where smoking can occur, bans on advertising, and marketing and labelling smoking products as dangerous. 

“It is estimated that 12% of Canadians smoke daily according to the Government of Canada. In the early time period covered by the lawsuit, an estimated 50% of Canadians smoked daily. Smoking rates in the Northwest Territories have declined substantially from 46% in 2002 to 28% in 2023, and our objective is zero.

“This plan addresses many needs. It provides financial compensation to individual smokers, including those who joined together in class action lawsuits, and it provides financial compensation to reflect the costs that health systems have been incurring to treat smoking-related diseases.

“If approved, this would be the largest resolution of its kind in Canadian history and must be considered an excellent, realistic result which will provide significant compensation to both individual litigants and to health systems.”