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  • W. bagg
    February 11, 2011 - 07:58

    If govt was serious about it, they outlaw they however that would mean less tax collected and alot of people disgruntled which means less votes.

    • Matt Todd
      February 14, 2011 - 00:43

      Governments do not expect to “win” these lawsuits since there is no way the tobacco companies would be able to pay the massive amounts being demanded by provincial governments across the country without going into bankruptcy. The net profits generated by all three of Canada's big tobacco companies are roughly $1 billion annually. Governments, on the other hand, rake in over 7.5 billion in various tobacco taxes on the same sales totals. The provincial governments can't afford to win. The objective of these lawsuits is to force a settlement similar to the Master Settlement Agreement in the US. That agreement allowed the the tobacco companies to pay an estimated $250 billion annually for 25 years. The catch was that the tobacco companies were permitted to increase the price of tobacco products and pass the costs on to consumers. The MSA actually represents a hidden tax, collected by the tobacco companies and passed on to the 46 states who signed onto the agreement. This little smoke and mirrors charade permitted the government to claim they were penalizing the tobacco industry while imposing a massive (hidden) tax increase. The settlement cost the tobacco companies nothing. The consumer (in this case smokers) got the shaft as usual.