Ontario suing tobacco companies for $50B

Ontario is looking for $50 billion from a group of tobacco companies to recoup health-care costs linked to illnesses stemming from tobacco use.


Under the Tobacco Damages and Health Care Costs Recovery Act, which passed the provincial legislature this year, Ontario can file suits against companies seeking the recovery of tobacco-related damages.


The legislation impacts alleged damages from the past, as well as ongoing tobacco-related health issues.


Ontario Attorney General Chris Bentley told reporters Tuesday the government filed the suit in an attempt to reclaim the money dished out by taxpayers to fund the health-care system as it relates to ailments linked to smoking.


"The taxpayers of Ontario have paid a lot of money for health-care costs directly related to tobacco use over the decades," Bentley said, adding $50 billion is the estimated financial strain on the health system linked to smoking since 1955. "We have passed legislation that is consistent with legislation in other places and we believe the taxpayers should be compensated for the costs they have paid."


Although the new law allows government to move forward with the process, it is still required to prove its allegations — and cost estimates — in court.


Bentley played down questions about the government suing over tobacco use in Ontario when the province places hefty taxes on the products. "Even if we related the two, the amount paid out in health-care costs far exceeds the amount any government has collected for taxes," he said.


Acknowledging the length of time that may pass before results, Bentley said: "This is an important lawsuit . . . and we'll pursue it as expeditiously as we can and we'll pursue it to its conclusion."


Provincial NDP Leader Andrea Horwath said Tuesday the focus should remain firmly on reducing smoking, which would then filter down into less stress on the provincial health-care system.


"There's no doubt it will be an expensive undertaking and that it will take decades, likely, before it's resolved," Horwath told reporters. "That's why we're saying government should be doing something proactively . . . to help people quit smoking and to help young people to not start smoking in the first place."


Along with Ontario, six other provinces have taken steps to recover health costs from tobacco companies.


Meanwhile, the Saskatchewan government suggested Tuesday it might join Ontario's lawsuit.


Saskatchewan Health Minister Don McMorris said his government likely will decide in the next month whether to launch legal action.


"It is a huge deal," McMorris said of Ontario's decision.


"It is a huge case and the tobacco companies are well-defended and I think it would be very important that — if we decide to move forward — we move forward with a common voice with as many provinces as possible."


The previous NDP government in Saskatchewan passed enabling legislation that allows the province to sue tobacco companies. But Saskatchewan never launched a lawsuit because most large provinces — specifically Ontario — had shied away from legal action, making it too large a burden for Saskatchewan alone.


British Columbia introduced similar legislation in 2000, which was contested by Montreal-based Imperial Tobacco Canada Ltd.


In 2005, the Supreme Court of Canada upheld the B.C. law, allowing the province to seek health costs from tobacco companies dating back 50 years.


New Brunswick, Nova Scotia, Newfoundland and Labrador and Manitoba have also enacted tobacco-cost recovery laws.


In May, a similar bill was tabled in Quebec, where a health department study estimated the health-care costs of smoking in the province at $4 billion a year.

Electronic cigarettes expected to grow in popularity under smoking ban

The clock is ticking for smoking establishments in Michigan. On May 1st the state will go smoke free, which means lighting up in your favorite bar or restaurant will be illegal.


But what about electronic cigarettes, will they be banned as well, and are there any harmful side effects?


Electronic cigarettes have been around for years, but are gaining exposure as more communities go smoke-free. The advantage for smokers is that they can still get a hit of nicotine, but without creating second-hand smoke.


Brandi Crawford has launched a business smell Greensmoke online from her Dowagiac home. The cigarette filters contain nicotine and water and are rechargeable. Instead of putting out smoke, they produce water vapor.


Crawford says she's expecting an increase of customers as Michigan's smoking ban takes effect.

 “Really popular in Florida, California, Chicago, where smoking ban has been in effect for years,” said Crawford.


While users of electronic cigarettes aren't inhaling smoke, it's the nicotine that still concerns doctors. 

Vicksburg family practitioner, Dr. Ken Franklin, warns that electronic cigarettes still aren't good for you.

“Most of the damage from cigarette smoke comes from cardiovascular disease, heart attack, stroke, high-blood pressure, birth defects, caused by nicotine itself,” said Dr. Franklin.

Reynolds' Ivey Made $16.2 Million in 2009

Reynolds American Inc. CEO Susan M. Ivey made $16.2 million last year, about 84 percent more than the previous year as the nation's second-biggest tobacco company struggled with declines in cigarette demand, according to a calculation by The Associated Press based on government filings.

Last year, the maker of Camel and Pall Mall cigarettes, and Kodiak and Grizzly smokeless tobacco saw its profit fall about 28 percent as revenue fell by 4.8 percent. The cigarette maker raised prices to offset sales volume declines it blamed on the economy and a 62-cents-per-pack federal tax increase that began in April.

For the year, Reynolds American said cigarette volumes fell 8.7 percent, while the company estimates an industry overall decline of 8.6 percent.

More than half of Ivey's pay package was accounted for in $8.5 million for a performance-based incentive bonus for 2009 and cash settlement of a 2007 long-term incentive plan. Her salary grew about 1 percent to $1.3 million.

The value of her stock options and stock awards nearly tripled to $6.2 million.


Ivey, who has headed the company since January 2004, was also given other compensation worth $198,217, which included a $79,000 payment given in place of the company's old executive perks program and personal flights on company-owned planes valued at about $11,500.

In 2008, Ivey's compensation was valued at $8.8 million.

Reynolds American also announced that it will hold its annual shareholders meeting on May 7 at its Winston-Salem, N.C., headquarters.

The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year.

It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.

Moldovan Communist Head Accuses Premier Of Cigarette Smuggling

The leader of Moldova's opposition Communist Party has accused Prime Minister Vlad Filat of smuggling cigarettes into neighboring Romania to pay for his election campaign last year, RFE/RL's Moldovan Service reports.

Former President Vladimir Voronin told a press conference in Chisinau that Filat's campaign funds were provided by Dinu Patriciu, a Romanian oil tycoon who is on this year's "Forbes" list of the world's wealthiest persons.

Voronin said Patriciu asked Filat last month to repay the money. He said Filat then prepared 10 truckloads of cigarettes to be sent to Romania. Voronin said only two trucks made it over the border while a third was stopped by Romanian customs officials. He did not say what happened to the other trucks.

Filat called Voronin's allegations "rubbish" and said he has no time to respond to such things.

Patriciu told the Romanian media that he has no ties whatsoever with Filat and did not finance his campaign.

Evans cigar shop owner blazing over possible cigarette tax increase

EVANS, Ga. - Smokers could cough up more to help ease Georgia and South Carolina's struggling budgets.Tuesday, opponents of Georgia's possible cigarette tax hike were at the state Capitol.

Although Georgia and South Carolina are among the cheapest when it comes to cigarettes, smokers and business owners say a tax increase is not what's needed to help with the budget shortfall.

Advocates of a new cigarette tax say an extra buck tacked on could raise as much as $354 million for the state of Georgia and decrease the number of smokers.

Russell Wilder with Top Shelf Cigar and Tobacco in Evans disagrees.

"They've realized over the years that they can keep raising the taxes and people will keep smoking," said Wilder.

Wilder says an extra dollar added to the price will do nothing but send customers over the river to shop.

"The potential there is I won't need to carry this anymore because people are taking the 15 minute drive over to North Augusta and buy their cigarettes there,” said Wilder.

That’s something Wilder says he can't afford.

"It's a small segment of what I sell but it's enough to pay my utilities. Now where am I going to make up that difference in sales,” asked Wilder.

We asked nonsmokers their opinion on the tax increase.

"That's fine with me because I don't smoke. It doesn't really matter," said one nonsmoker.

Although it matters to Wilder, he says if the tax goes into effect...

"We're 25 percent of the voting population so we can't vote anybody out. All we can do is be mad," said Wilder.

In South Carolina, School Superintendent Jim Rex wants the state's current 7 cent per pack tax raised to the national average.

He says the move would avoid teacher furloughs.

Don't divert tobacco fund

An ounce of prevention is worth a pound of cure. Apply Benjamin Franklin's truism to state tobacco prevention efforts, and it can be said that an annual $3 million of prevention is worth $50 million of cure. Preserve funds for tobacco prevention and control as a necessary investment against costly tobacco ailments down the road.

As it is, just 6.5 percent of tobacco settlement money now goes into the Hawaii Tobacco Prevention and Control Trust Fund: That's $3.2 million this year, down from $10 million yearly from 1999 through 2001. The Legislature diverts heftier chunks of the fund to other purposes, such as 28 percent to the University of Hawaii's new medical school and 25.5 percent to the state general fund through 2015. Despite overwhelming public testimony, House Bill 2887 moving through this Legislature aims to totally raid the tobacco-control portion through 2015 to boost the anemic general fund.

"I know the budget is tight right now ... but every dollar we spend on prevention saves so much more in health care costs," Dr. Elizabeth Tam, the trust fund's advisory board chairwoman and head of the Department of Medicine at the UH John A. Burns School of Medicine, told the Star-Bulletin's Helen Altonn.

"A Decade of Saving Money, Saving Lives" is a recent report that says the fund is making a "tremendous impact" in preventing smoking and helping people quit. "In the last six years alone, the decrease in smoking prevalence has saved 14,000 lives," it said.

The Coalition for a Tobacco Free Hawaii agrees on the strides.

"We saved lives and saved state money. We saved over $400 million in direct health-related costs over eight years attributed to smoking," said Trisha Nakamura, the group's policy and advocacy director.

But a decade of progress is in jeopardy: Smoking and tobacco consumption have increased in states where tobacco control funding has been cut.

A 2009 report by the U.S. Centers for Disease Control and Prevention showed that while U.S. smoking death rates have plunged, states with the highest smoking rates have the highest death rates from smoking. Hawaii, encouragingly, was at the bottom of that list with Utah, with the lowest death rates due to smoking.

A key is prevention among the young. The tobacco-free coalition says 1,400 kids start smoking every year -- but that strides have been made in reducing youth smoking from one in four youths, to one in 10.

On Wednesday's 7th annual Kick Butts Day rally at the state Capitol, hundreds protested the anti-smoking fund raid, noting that the tobacco and alcohol industries outspend prevention and counter-marketing efforts by millions of dollars each year, making it increasingly difficult to combat the negative effects of their marketing on youth.

As state lawmakers rattle coffers to meet a $1.2 billion shortfall, successful programs risk being depleted. Yes, these are tough financial times. But an investment of $3 million annually to head off $50 million in smoking-related costs seems well worth it -- in dollars and cents, and in lives saved and better lived.

Tobacco Seen As Harmful In Any Form

Back in medical school, we were told about the dangers of cigarette smoking but pipe and cigar smoke were seen as less harmful.

According to a new study in the journal Nature, pipe and cigar smoke may be more harmful than once thought.

Researchers conducted a study to determine whether pipe and cigar smoking was associated with elevated levels of cotinine--the end product of tobacco which can be detected in the urine.

They also looked at airflow to evaluate lung function. Those who did not smoke cigarettes but did smoke pipes or cigars were more likely to have airflow obstruction than those who had never smoked.

Clearly there is no free ride.