Rothmans, JTI and Imperial Tobacco have declared bankruptcy because of a number of lawsuits including ones filed by provinces seeking restitution for health care expenses related to cancers believed to have been caused by smoking tobacco.
The tobacco board and the others have filed claims for $13.6 billion.
Former Chief Justice Warren Winkler has been appointed mediator in the tobacco board’s lawsuit.
The tobacco companies sought protection under the Companies Creditors Arrangement Act and it’s under that process that the complainants are seeking a settlement for their share of what the companies can pay.
The tobacco board was once powerful enough to negotiate attractive prices for growers, but black markets undermined their bargaining power.
Agricultural economist Larry Martin said then that up to half the market was being supplied with illegal tobacco and said the province needed to do more to stop the black market.
The lawsuit the tobacco board filed against the tobacco companies seeks to garner the difference between prices for domestic consumption compared with export production. It has been revealed that tobacco companies made cigarettes they said were for the United States market, but which ended up being sold in Canada.
The tobacco board gave up its supply management and quotas and governments offered some compensation.
The tobacco board continues, but in as a much-diminished organization that no longer has offices.
But it does licence producers. There are about 150 intending to grow tobacco this year and they plan to slightly increase production.
A significant portion of their production is exported, much of it to the United States, but some to other countries.
