Billions of dollars in taxes could go up in smoke as
A $13.5 billion judgment against Canada Big Three tobacco companies has forced them into the largest and most complicated restructuring proceedings this country has ever seen with implications that could dig deep into the nation pockets.
At stake is the survival of Canada tobacco industry, the impact its demise would have on the nation finances, the fate of the revenue stream cigarette sales provide to Aboriginal people, and a potential canada goose outlet nyc boom in the illicit tobacco trade.
Tobacco canada goose outlet parka companies paid about $8 billion in taxes in 2017 18. Some $3 billion went to the federal government, canada goose outlet with 10 provinces splitting the remaining $5 billion.
Tobacco contribution alone is approximately $4 billion, said canada goose outlet shop Eric Gagnon, head of corporate and regulatory affairs at Imperial Tobacco Canada Ltd., which boasts a 48 per cent market share.
The upshot is that tobacco taxes represent almost 1 per cent of federal tax revenues, absent which the federal deficit would increase by some 17 per cent from its current level of $18.1 billion. Tobacco taxes also represent roughly 1 per cent of the provinces tax haul.
Proposed tobacco ban sparks fiery debate in Beverly Hills
US sales OK for cigarette alternative that heats tobacco
Rothmans, Benson Hedges granted creditor protection following $15 billion Quebec tobacco class action
All three companies were granted creditor protection in the wake of a March 1 judgment of the Quebec Court of Appeal. The decision substantially upheld canada goose outlet store the award https://www.rkliedtke.de made in 2015 by canada goose outlet canada Justice Brian Riordan of the Quebec Superior Court to smokers canada goose seeking damages for addiction and smoking related diseases in two class actions commenced in 1998. Riordan had ruled that the smokers should have been warned of the risks of smoking, but never were.
Riordan ordered Imperial, a subsidiary of British American Tobacco plc, to pay about $10.5 billion. Rothman, Benson canada goose factory sale Hedges Inc., the Canadian unit of Philip Morris International Inc., was tagged with about $3.1 canada goose coats on sale billion and JTI MacDonald Corp., a subsidiary of Japan Tobacco Inc., faced a $2 billion liability.
While the Court of Appeal reduced the total damages by about $2 billion, the actual amount payable by each company is likely a moot point as the law imposes what lawyers call and several liability, meaning that if any of the three companies is unable to canada goose outlet sale pay its portion of the judgment, the others must come up with the balance if they can.
And that the looming question, because the Quebec judgment is just a sliver of the total picture.
identified about $600 to $700 million in claims but we don know the total amount yet, says Deborah Glendinning of Osler, Hoskin Harcourt LLP in Toronto, who represents Imperial.
What is clear canada goose canada goose store outlet black friday is that the Canadian companies certainly can pay up in full.
don believe that canada goose outlet toronto factory the value of the cigarette producing assets of the Big Three come close even to the value of the Quebec judgment alone, says Ian Irvine, an economics professor at Concordia University in Montreal. on a price to earnings ratio, their value has been estimated at about $10 billion. the international parent companies. The general rules of corporate law suggest that they are under no obligation to pitch in. But practical realities, including the international scope of tobacco litigation, suggest that they have no choice.
I don canada goose uk black friday believe that the value of the cigarette producing assets of the Big Three come close even to the value of the Quebec judgment alone,”
Ian Irvine, economics professor at Concordia University in Montreal
objective is to uk canada goose outlet facilitate a negotiated global resolution to all Canadian tobacco litigation under court supervision, Gagnon says.
What clear, however, is that a resolution won happen without the parents involvement.
Asked whether Imperial parent, BAT, is willing to contribute to any settlement, Gagnon points out that he can speak canada goose outlet jackets for BAT.
he added in canada goose outlet online an email, are participating in this process and seek the same objectives, a global resolution to the litigation. To some extent, the agreement was tied to the sales performance of the various companies.
But whether or not a similar approach will work here is open to question.
will not be partners to the tobacco industry in any agreement that depends on their future sales, said Philippe Trudel of Trudel Johnston Lesp in Montreal, and a lawyer for the successful plaintiffs in the Quebec case. very skeptical that the tobacco industry will be acting in good faith, as they certainly haven done so to date. My view is that they want to have their cake and eat Canada Goose online it too. approach is appropriate here.
Meanwhile, the Ontario cheap canada goose Superior Court of Justice, which is overseeing canada goose outlet uk sale the restructurings, has appointed former Ontario Chief Justice Warren Winkler and his counsel, Jonathan Lisus of Lax canada goose clearance sale O Scott Lisus LLP in Toronto, to mediate a settlement.