Canada — Three major tobacco companies have reached a proposed settlement of nearly $24 billion to resolve a long-standing legal battle in Canada over tobacco product-related claims. The deal marks a significant step forward in addressing litigation that has dragged on for years.
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Philip Morris International announced on Friday that the settlement proposal was filed by a court-appointed mediator on behalf of its Canadian affiliate, Rothmans, Benson & Hedges. Similar settlements were also submitted for JTI-Macdonald Corp. and Imperial Tobacco Canada Ltd.
“After years of mediation, we welcome this important step towards the resolution of long-pending tobacco product-related litigation in Canada,” said Philip Morris International CEO Jacek Olczak in a statement.
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The legal battle traces back to early 2019 when the three tobacco companies sought creditor protection in Ontario. This came after they lost an appeal in a landmark court case in Quebec, which was initiated by consumers affected by tobacco-related illnesses.
Settlement Breakdown
The proposed deal, worth 32.5 billion Canadian dollars (approximately $23.53 billion), will be divided among several parties:
- Canadian provinces and territories: Will receive a combined CN$24.8 billion as compensation for health care costs incurred from treating tobacco-related diseases.
- Class action members: CN$4.25 billion will go to individuals who were part of the class action lawsuit.
- Victims outside Quebec: Canadian victims from provinces outside Quebec will be awarded CN$2.5 billion.
- Tobacco-related disease foundation: Over CN$1 billion will be allocated to a foundation dedicated to fighting tobacco-related diseases. This amount includes CN$131 million, which will be deducted from the funds designated for Quebec plaintiffs.
The settlement, if approved, would bring an end to a complex legal saga that has spanned multiple years, providing financial relief to Canadian provinces, territories, and individuals affected by the health impacts of tobacco use.
