Welcome to meeting number 90 of the Standing Committee on Health.
We're studying Bill , an act to amend the Tobacco Act and the Non-Smokers' Health Act and to make consequential amendments to other acts.
Today, on behalf of Rothmans, Benson & Hedges, we have Peter Luongo and Mike Klander. On behalf of the Canadian Convenience Stores Associations, we have Satinder Chera and Anne Kothawala. From Freeze the Industry, we have Anabel Bergeron, Akehil Johnson, and Maxime Le.
As an individual, do we have Sinclair Davidson here?
Mr. Chair, members of the committee, thank you for inviting me here to speak with you today.
I'm Peter Luongo, the managing director of Rothmans, Benson & Hedges Inc., a fully owned subsidiary of Philip Morris International. I'm here to talk with you today about our vision for the industry, how that vision aligns with our shared goal of reducing smoking rates in Canada, and the implications of Bill for that objective.
First, our vision for the industry or goal, put simply, is to stop selling cigarettes. We can do this in a way that makes sense for us as a business and for society as a whole by switching existing adult smokers to alternative, smoke-free products that significantly reduce their exposure to the chemicals in cigarette smoke that are linked to disease. You may be thinking, if you want to stop selling cigarettes, why not simply stop? However, if we were to simply do that today, every single adult smoker in Canada who smokes our brands would most likely switch to another brand of one of our competitors. This would not serve the long-term goal of eliminating smoking. However, we believe that by introducing new, reduced risk products and by educating adult smokers on the benefits of switching, we can reach a point where we can envision a phase-out of cigarettes. We know this is a massive undertaking and will require time and support from the government and other stakeholders, but it is a goal we should all share.
You may also be thinking, why now? What has changed? Put simply, it's technology. For more than a decade PMI has been developing a series of smoke-free alternatives, products that are designed to replace cigarettes for adult smokers who are not seeking to quit tobacco altogether. As an industry, we finally have products that both satisfy adult smokers and also significantly reduce their exposure to chemicals. This is based on the simple fact that nicotine, while addictive and not risk-free, is not the primary cause of smoking-related diseases but it is ultimately a large part of what smokers are seeking from cigarettes.
As the old quote goes that was mentioned earlier today, “People smoke for the nicotine but they die from the tar.” It is the burning process, the combustion that occurs when tobacco is lit on fire that creates this tar, not the mere presence of nicotine. All of the alternative products we are looking to introduce have several things in common. They all produce an aerosol vapour, and they all contain nicotine to address smoker preferences, but they also all eliminate combustion. By eliminating combustion, we dramatically reduce users' exposure to these harmful chemicals if they fully switch to these products. We know from the millions of smokers in other countries who have already switched that we are talking about reality, not theory.
I'll give you a bit of background to what we are doing today in Canada with one of our alternative, smoke-free products called IQOS. It is an electronic device that heats specially manufactured tobacco sticks to release an aerosol vapour. The vapour contains nicotine and is similar to the vapour produced by an electronic cigarette. When compared to a reference cigarette smoke, the aerosol vapour produced by IQOS contains, on average, 90% fewer harmful and potentially harmful constituents linked to smoking-related diseases. Looking specifically at the 14 carcinogens identified by the International Agency for Research on Cancer, we see the reduction is greater than 95% on average. Recently, an advisory committee to the Food and Drug Administration in the United States concluded that switching completely to IQOS can reduce smokers' exposure to harmful smoke compounds by a vote of eight to one.
To be clear, we are not saying that smoke-free alternatives are risk-free. They are not for non-smokers, they are not for youth, and they are not for people who smoke today and who want to quit tobacco and nicotine altogether. Smoke-free alternatives, such as IQOS, are for adult smokers who will otherwise continue to smoke without a satisfactory alternative. With over four million adult smokers in Canada today, it is imperative that we provide such alternatives.
If IQOS is legally available today in Canada, you may be wondering what the problem with Bill is. To start, I think we can agree that for someone to switch to a product, they need to know that it exists and how it compares to cigarettes. However, if Bill is passed in its current form, it will be illegal for me to share with Canadian adult smokers everything I have told you so far about how IQOS compares with cigarettes. Specifically, clause 27 of Bill prohibits anyone from making comparisons between any two tobacco products or their emissions. Because the IQOS unit heats tobacco, it would be considered a tobacco product. As a result, we would not be able to clearly explain the differences between IQOS and any other tobacco product, including cigarettes, regardless of what the scientific evidence showed to be true.
It is important for the committee to remember that this is not just about the product that we, as RBH, have on the market today. Our competitors in the industry have products that also contain tobacco and that operate under similar principles of avoiding combustion while still delivering nicotine. It is not only about products that have already been invented; it is recognizing that through additional research and development, these categories will continue to evolve to provide smokers with ever more and better alternatives in the future. As drafted, if there is a tobacco product that is proven to be of lower risk, there will be no way to explain that fact to consumers without further amending the legislation, which could be a very lengthy process. During this time, you would have millions of adult smokers in Canada making choices about their health without having all of the relevant information and access to the best available science.
Therefore, our recommendation is that clause 27 be amended to create regulatory power and to put tools in place to take advantage of the opportunity that we believe these products represent, and to have regulations reflect the latest available evidence. The Senate modified a similar section of this bill dealing with vaping products so that, through regulations, authorized statements could be created by Health Canada that strike a balance between providing adult smokers with the information they require to make informed choices while at the same time preventing them from being given a misleading impression. A similar change to the tobacco section of Bill , giving Health Canada the power to create tailored regulations going forward, is a reasonable and balanced step for this committee to take.
Now, you don't have to believe everything I've said today. You don't even have to believe that IQOS is a better choice than smoking. You only have to believe that it is possible for a tobacco product to exist that has lower risks than cigarettes, and, if it is possible, I think we should all be able to agree that adult smokers in Canada have a right to that information and that the law should provide flexibility for regulations to reflect that fact.
Before I conclude, it's also important to recognize that given the ongoing evolution of these categories, we will continue to need to study and update our knowledge of these new alternatives. Our second recommendation for this committee is that in your report on Bill , you recommend that the Government of Canada, in the upcoming federal tobacco control strategy, commit to funding research into smoke-free alternatives, including heated tobacco products and electronic cigarettes, to help inform future policy discussions with evidence that is entirely impartial. Doing so will provide legislators and regulators with substantiated third-party information regarding the science behind smoke-free alternatives, and better enable a more fulsome dialogue about the potential of harm reduction in tobacco to achieve the goal of “5% by '35”, a goal we all share.
Thank you very much.
Thank you, Mr. Chair and members of the committee. My name is Satinder Chera, and I am the president of the Canadian Convenience Stores Association.
Our association is proud to represent 27,000 small business owners across Canada who serve 10 million customers each and every day. As you will note from the materials in your kits, our channel provides employment opportunities for over 234,000 Canadians and collects over $22 billion in taxes for all levels of government. Our stores ensure that Canadians have access to necessities and basic groceries wherever they live, and a third of them serve rural and remote regions of the country. In our vast country it is our distributors who provide this critical link of getting those necessities to our stores, which is why I am joined by Anne Kothawala, who represents that part of our industry.
Our industry is much more than our contribution to the economy. We support local sports teams and charities. Last year we held our first ever national Convenience Store Day, during which politicians and community leaders worked a shift in our stores and helped us to raise over $80,000 for charity. Our channel is constantly changing and adapting. You can buy food-service items like samosas and healthier snack options such as energy bars. Twenty years ago newspapers were a significant part of our sales; today they are not.
Tobacco sales have also declined, just as the number of Canadians who smoke has declined. This is a good thing; however, those sales have moved to the illegal market. Across Ontario, one in every three cigarettes sold is illegal, and it's as high as 60% in some markets throughout the province. Please find more information regarding contraband in your kits.
Just so we are very clear, we're not here to defend the tobacco industry. After all, tobacco is a cause of serious diseases. That said, so long as Canadians choose to smoke this legal product, our retailers continue to represent the most responsible avenue for them to buy tobacco products. We are the most responsible safeguard to keep tobacco products out of the hands of children. It is in this context that we work with the tobacco companies, along with confectionery, snack, and beverage manufacturers, who are all non-voting members of our association.
My colleague and I are both parents. As any parent, we don't want our kids, or any kids, to get their hands on tobacco products. In fact, retailers play an important role in keeping these products out of the hands of youth to begin with through display bans and with identification checks through our We Expect ID program that is included in your kits. Convenience retailers are part of the solution to preventing kids from smoking, not in opposition to it.
We are here today to raise the concerns of our members about the impact that the proposed plain-packaging legislation will have on our stores. We fear that despite the intent of the legislation, efforts to reduce tobacco consumption will be wasted and, ultimately, worsened by this bill. We will also talk about the vaping side of Bill , where we fully support the government's finally stepping in to regulate this promising development for consumer choice.
Our channel has proven to be the best at age testing when measured against the Beer Store or the government-owned LCBO in Ontario. According to data from Smoke-Free Ontario, public health units have conducted over 20,000 underage mystery shops, with a pass rate of 96% by convenience stores in Ontario.
Committee members may be asking why, if 75% of the package is already covered by warning labels, it would matter if the remaining 25% were covered too? There are three reasons.
First, as with any product, branded packaging gives consumers assurances of quality and reliability and helps them distinguish one product from another. Standardizing cigarette packaging will make it much more difficult to differentiate legal from non-legal products. Moreover, Bill allows for the standardization of the cigarettes themselves. Forcing legal products to look like their already-standardized illegal counterparts will only further encourage consumers to make their purchasing decisions on price alone. The cheapest products will always come from the black market, free from any tax or ID check.
Second, we already compete with an illicit market that is double the global average. With plain packaging, we can expect to see counterfeiting become a bigger problem than it already is.
Third, because of the black market, law-abiding convenience stores lose not only the tobacco sales, but also the purchases that go along with them—milk, bread, lottery tickets. Governments lose tax revenue, and no one is there to prevent children from buying illegal tobacco.
We know that committee members have heard a lot about the black market and contraband lately, having just studied Bill . Many witnesses have remarked on the importance of addressing the black market when it comes to cannabis, and several have pointed to branding to visually separate these products and provide consumers basic information about them as well as a quality guarantee.
Our members cannot understand why, when the government is trying to curb black market cannabis, it chooses to proceed with plain packaging for tobacco, which will be a boon to the already thriving black market. If the shared problem between tobacco and cannabis is the black market, why are we treating these products so differently?
This is compounded by stories from retailers in other countries where they have adopted plain packaging. Our Australian retail counterparts have struggled with inventory control, staff training, and customer transactions without any of the intended benefits. Contraband rates increased by 20% in that country after plain packaging was introduced. More recently, the Australian and French governments have both stated that plain packaging did not have the desired impact on smoking rates. As you can imagine, our retailers and distributors hear these stories and are naturally questioning whether we should expect to see any different outcome for plain packaging if implemented here in Canada.
I'll now turn it over to my colleague to conclude our remarks.
Without adequate resources to deal with contraband tobacco, and without adequate time to prepare for the consequences of plain packaging, already stretched small businesses will take a hit once again. A poll of our retailers, which has been shared with Health Canada, found that over 88% of staff use brand logos to differentiate between tobacco products; 97% of retailers believe that they would need to increase staff training to ensure proper inventory control, stock management, and customer service if plain-packaging restrictions are imposed in Canada. Our stores and distributors are not asking for any compensation to assist with this transition, but we are asking for time to deal with what we know the fallout will be.
While it's not in the mandate of this committee to recommend, we believe the government should address the issue of contraband tobacco before moving ahead with Bill . The Senate social affairs committee noted in its report that more should be done to fight the black market. Health Canada is contemplating studying the illegal market in its renewed tobacco control strategy, and we support that effort.
We need action. Illegal tobacco is unregulated, untested, and untaxed. Many have zero per cent health warnings. The existence of this significant market undercuts every single one of the government's tobacco control measures and goes against the government's stated rationale for plain packaging. Providing law enforcement with greater resources specifically allocated to eliminating contraband tobacco is one option. Funding a regular study to evaluate the state of contraband tobacco and regulatory impacts on illegal tobacco usage rates is another. It is worth noting that this is not something the Government of Canada currently tracks.
To support this committee in its ability to recommend amendments to the proposed legislation, we offer the following recommendations.
First, to help mitigate the impacts of plain packaging on our small businesses, allow for some type of visual differentiation on packages, perhaps on the cellophane overwrap, which has the added benefit of being removed as soon as the package is opened. This would help to distinguish legal from illegal products, particularly for law enforcement. The RCMP have raised concerns about contraband tobacco, particularly the links to organized crime. In a recent massive seizure of drugs, weapons, and contraband, their press release stated that the investigation demonstrated “the strong ties between contraband tobacco and the organized crime community.”
From a distributor perspective, this is crucial when it comes to shipments of cartons of cigarettes. Very rarely are cartons purchased in stores, as you can well appreciate because of the cost, but our distributors use the visual differentiation to pick and fill customer orders. We understand that the U.K. plain-packaging legislation focused specifically on products destined for retail, rather than on shipments. We believe Bill should include that same provision.
The committee may also want to consider extending the same logic to individual cigarettes. Some differentiation would likely assist law enforcement in telling legal and illegal products apart.
Our second recommendation would recognize that many of our retailers and distributors are small businesses that are already burdened by excessive red tape and regulation. Not allowing for a reasonable transition period for our stores and their distributors will hurt our already struggling channel. Should this legislation proceed, we implore you to consider amending Bill to include a separate adjustment and sell-through period for retailers and distributors, of between 12 and 18 months.
Our third and final recommendation deals with vaping. We support the government one hundred per cent in finally regulating this product. We find it extraordinarily unfair that our stores and distributors have followed Health Canada's directive to refrain from selling vape products with nicotine, while illegal vape shops have been allowed to pop up on street corners in virtually every community.
With growing acknowledgement of the benefits of vape products as an alternative to traditional cigarettes, we ask this committee to create a level playing field by allowing for limited, substantiated communication by convenience retailers about alternative nicotine-containing products, including electronic cigarettes and heated tobacco products.
We thank you very much for the opportunity to present today, and we would be happy to answer any questions you might have.
Imagine if an airplane manufacturer sold airplanes that routinely fell out of the sky and killed 45,000 people per year. Surely that would not be normal. There would be an outcry and people would demand that steps be taken to protect the public. That would be normal.
That said, good afternoon, Mr. Chair and committee members.
We are here together to talk about Bill , the issue of plain and standardized packaging, and to introduce our group called Freeze the Industry.
That quote I read is one from my first Unfiltered Facts meeting. Unfiltered Facts is youth advocacy, anti-industry group in Hamilton, Ontario. I thought about it long and hard. This was a self-evident truth. I thought to myself this was crazy, because tobacco is the only product that, when used as intended, kills over half its users. It seemed to me that nobody cared that smoking kills or tobacco usage kills. We hear it all the time and we just brush it off. I couldn't just sit by while this was happening. I'm also a Seventh-day Adventist. Our church believes that good health is vital to good living. We must do all we can to ensure that we live the best and healthiest lives.
Thus, in that singular moment, I became passionate and energized. I was ready to advocate in my school, in my church, in my communities, in Ontario, across Canada, in North America, and in the world that the industry targets youth to be replacement customers. No longer could “Smoking kills” work. I had to get the message out there to resist big tobacco, revolt against its manipulative tactics, and unite in solidarity that we would never use its products, and advocate to other youth about this shady industry. That's how I became an advocate, and it has been nothing short of a powerful journey.
I've been able to witness first-hand how youth advocacy has helped shape and change society, whether it was in Hamilton where we informed and gained 5,000 petitions in support of smoke-free movies, or helped lower the smoking rate in high school to 6%. However, that's not all. Throughout my volunteering and time spent at Unfiltered Facts, I learned about a provincial-wide network of youth and young adults who were committed voluntarily to fighting the industry in Ontario. Thus I got involved with this network known as Freeze the Industry.
It was through Freeze the Industry that I saw youth become informed and empowered. I saw youth take an interest in the Canadian political and democratic process. I've had the joy of being a youth advocate and seeing youth advocacy result in laws passed and new policies implemented. Some of these include power walls; the banning of flavouring in tobacco; the regulation of electronic cigarettes; the banning of smoking in parks and on patios in Ontario; the divestment from big tobacco by the University of Toronto; regulations on hookah and shisha use; and recently McMaster University, a university in Hamilton, going tobacco-free.
I've seen so much accomplished, but I know there's a lot more to get done, whether it's tighter regulations on flavours in tobacco, a moratorium on new products, or the implementation of plain and standardized packaging, which is why we are here today.
The fact remains that cigarette packaging is a mini-billboard. It's flashy, it's bright, it's colourful and attractive. We want people to understand that items that look friendly should not be deadly to your health. Friendly should not be deadly. You would not advertise rat poison or bleach the same way you advertise sugar or apple juice.
Therefore, in addition to countless other youth from across Ontario and across this nation, we support the passage of this legislation and will continue to advocate in favour of it, and we will strive to inform the public of the importance and necessity of this legislation.
I come here wearing many hats. I am a science student, a volunteer, a sister, a daughter, and a community leader. As a master's student conducting research on innovative cancer therapies here in the nation's capital, I have come to appreciate the repercussions of tobacco products on our economy, health care, and families. As you perhaps already know, treatments of tobacco-related conditions cost Canadians an estimated $6.5 billion in direct health care costs and tobacco-related conditions kill 100 Canadians every day. Smoking remains the foremost cause of premature death, and we must act.
I can testify first-hand that research innovates at a rapid rate, and progress in the field of medicine has significantly improved the prognosis of various diseases and continues to improve the quality of life of many patients. However, we must also acknowledge the power of education and prevention. Plain and standardized packaging elevates the impact of health warnings and prevents the use of deceiving designs.
As a volunteer in my community, I know youth have opinions on public heath issues, and they deserve to have their voices heard. As an ambassador with Freeze the Industry, I have witnessed the support of younger generations for plain and standardized packaging. Last November, approximately 100 youths and young adults expressed their support for plain and standardized packaging at our Freeze the Industry “Make 'Em Plain” rally on the Hill.
We understand the dangers of smoking and recognize that the tobacco industry employs various strategies to deceive. We know that plain and standardized packaging will spread this knowledge by highlighting the health warnings, and will prevent new smokers from falling into the tobacco industry's manipulative traps.
It is with these many hats on today that I support the proposed amendments to Bill for standardized, plain packaging.
I am hopeful that, together, we will be able to provide for a better future for current and future generations of Canadians.
Back when I was in high school there was a smokers' pit outside every morning, at lunch, and after class. Nowadays when I'm not busy studying or conducting research on population health, serving as a patient adviser to the Ottawa Hospital, or advocating for tobacco endgame measures with Freeze the Industry, I take my little brother to this very same school and see that without fail the smokers' pit endures. Masked behind plumes of cigarette smoke, I can see some new faces from back when I was just a youth, but nonetheless the fact remains that it is the young, the vulnerable, and those who just want to fit in that populate this pocket of poison. I asked my little brother if he knew who they were, and his answer was, “It's all the cool kids who go there.”
When I was younger, my mother smoked. Fortunately, she quit, but I still had secondhand smoke from tobacco products in my lungs at times. She got hooked on cigarettes because of her environment and living situation, but it was not her fault since everyone around her smoked. It was considered normal; everyone smoked.
Through my studies, I have learned that, for various reasons, francophones have poorer health than other non-marginalized communities. This is easier to understand considering that 35% of francophones in Canada are smokers.
Young people can be affected by tobacco in many ways—not just by smoking it and poisoning their body, but also by being robbed of the lives of the loved ones they care about. This summer I was in an accident and required surgery. When I was transferred to my overnight bed, a fellow patient who required surgery as well became my roommate. When prepping the patient for anaesthesia, one of the staff members asked whether or not the individual smoked. The answer was yes, and because of this the staff member said that smoking could complicate the procedure. The little girl who was there started to cry and become worried. Can you imagine how she would have felt if her parent died because of that?
For me, advocating for and supporting Bill with Freeze the Industry means saving my little brother from the influence of tobacco packaging.
The coming into force of Bill will help people of my generation be healthier parents and have healthier children, while reducing the health inequalities in marginalized communities.
It's about making sure the air we breathe is a little cleaner for everyone, but also for young people in particular who are tired of having seconds, minutes, or years of their lives taken away by tobacco-related death.
Freeze the Industry allows me to be this advocate and to be the role model I want my brother to have. We urge this committee to take our perspective seriously and to follow through with our recommendations to implement plain and standardized packaging so that every Canadian from sea to sea to sea is happier, more productive, and can lead a healthier life.
We thank you for your time today and this opportunity, and we look forward to our discussions later on.
Thank you so much for inviting me to speak.
I'm a professor of economics at an Australian public university. I'm also associated with some free market think tanks, the Institute of Public Affairs and the Australian Taxpayers' Alliance.
As part of my overall research during my career, I have looked at various government policies, ranging from things such as insider trading, native title, and petrol pricing, and all sorts things along those lines. One of the public policies I have looked at is the plain-packaging policy that was introduced in Australia in December 2012.
I think we can all agree that smoking kills and that the rate of smoking in our society is probably a lot higher than what is socially desirable. The real question is what we ought to do about the fact that people choose to smoke. What I'm going to argue today is that if the Canadian government wishes to lower smoking rates they need to do the hard policy work on issues such as excise pricing, public education and information, and the provisional substitutes to smoking. Particularly, my argument is you should focus on actual results, not virtue signalling, and you should stay away from utopian public policy-making. The idea under utopian public policy-making is that there are free lunches, that people would be different, and that things could change for the better if only we all tried and worked harder.
It turns out that the Australian policy of plain-packaging failed. You don't have to believe me on this point. If we have a look at the latest Australian national drug strategy survey results, the decline in smoking prevalence in Australia stalled after the introduction of the plain-packaging policies. The government waste-water intelligence survey found that the amount of nicotine in Australian waste water actually increased during that time. The size of the contraband market has increased dramatically over time. The bottom line is that a policy experiment was attempted. The notion that by taking away the branding of packets you could emphasize the graphic health warnings was an experiment that was probably well worth trying. The Australian government did this experiment. They conducted a tracking survey to see how it would work. The fact of the matter is that the experiment failed. It turns out that taking away branding adds costs to the economy, which previous speakers have spoken about, but does not actually reduce the prevalence and instances of smoking. In fact, today in Australia there are more people smoking than there were five years ago when they introduced the policy.
What some of my colleagues and I have done is have a look at the government's own survey results, taking their own data and using their own techniques. What we found is that the graphic health warnings, as a form of public education, do have an effect on reducing smoking. What we also found, however, is that the size of that effect actually declined after the introduction of plain packaging. Graphic health warnings in Australia were introduced in 2006. You can see clearly that they do have an impact on people's smoking behaviour, but that taking away the branding, the notion that people would be more aware of the graphic health warnings if we took away the branding, did not work. There is no evidence, even in the government's own data, to suggest that a lack of branding reduces smoking. The other thing is, when you have a look at the packets themselves, the government's own research found that the appeal variables of the packets did not really have a big impact on the intention to quit and quitting behaviour.
Yes, it was probably a good idea that should have been tried. I can't say that it has succeeded, but more importantly, given that it can be very difficult for a government not to go ahead and do something along these lines, I would like to make some recommendations. First, if the Canadian government does go ahead with the bill, it should introduce a sunset clause so that after a period of five or ten years, say, the legislation could be reviewed and renewed if it has been successful. Second, a formal tracking study should be commissioned to measure the success or failure of the policy, and this tracking study should include a full assessment of the health, economic, and social costs associated with the policy, especially the impact on small business, on convenient stores, and on insurance costs, because we know crime will increase. Third, the tracking study should be conducted in an open and transparent manner by people who are not intimately associated with the policy themselves. Fourth, formal and transparent cost-benefit analysis should be conducted by credible external individuals. Fifth, all of this data should be made available on the Health Canada website for external verification and analysis.
I'd be happy to answer questions.
Thank you very much.
No legal tobacco is grown in Australia. There used to be tobacco licences for farming here in Victoria, where I live, and I think over the last 10 years the governments have been buying back the licences, so there is no legal tobacco produced in Australia. Any tobacco produced in Australia must be illegally grown or it is imported into the country either as illicit or as contraband. We have both types—people buy legal tobacco in neighbouring countries and import it into the country, and/or they're actually using counterfeit cigarettes. We have both.
KPMG U.K. does an annual survey, and they estimate that the size of those illegal markets has grown from about 11% before the policy was introduced to about 13% to 14% now. That, depending upon the precise numbers, is about a 20% to 25% increase in the illegal markets in Australia.
Now bear in mind that Australia is an island, so it's actually quite hard to get stuff to us. There's also been talk that a lot of people have stopped smuggling more dangerous types of drugs and are substituting tobacco for those, simply because the penalties for smuggling tobacco are so much lower than the penalties for smuggling harder drugs. You might even say that that could be a positive, I suppose, except of course for the people who are completely against criminals. There's been an increase in theft from convenience stores, with people now breaking in and stealing tobacco products, so convenience stores are now having to compete against their own stolen product, which is, of course, grossly unfair to them.
There's also been a policy disconnect. We have illegal tobacconists setting up all over the place, but between the customs people, the local police, and the local councils that are supposed to license all of this, there doesn't seem to be a clear pathway of responsibility to the policing of the illegal market. One of the other recommendations I should make, now that I'm thinking about it, is for the Canadian government to actually create clear lines of responsibility for enforcing the plain packaging laws; otherwise, it ends up falling between the cracks and everybody is pointing a finger at everybody else.
There was another point I was going to make, but it escapes me for the minute.
Mr. Luongo, one of your representatives was in to see me in my office in Oakville before this meeting just to let me know what some of your issues were. He asked me to proposed section 20.1:
No person shall promote a tobacco product, including by means of the packaging, (a) in a manner that could cause a person to believe that the product or its emissions are less harmful than other tobacco products or their emissions...
He was making the case that you should be able to advertise new products that have lower risks of smoking than cigarettes. It made me do some research into nicotine. I found this research from 2016. It said:
Nicotine poses several health hazards. There is an increased risk of cardiovascular, respiratory, gastrointestinal disorders. There is decreased immune response and it also poses ill impacts on the reproductive health. It affects the cell proliferation, oxidative stress, apoptosis, DNA mutation by various mechanisms which leads to cancer. It also affects the tumor proliferation and metastasis and causes resistance to chemo and radio therapeutic agents. The use of nicotine needs regulation. The sale of nicotine should be under supervision of trained medical personnel.
I remain convinced that our goal as a health committee is to get nicotine, and addiction to it, out of our society. What struck me though was that this was the Indian Journal of Medical and Paediatric Oncology. I thought to myself, India is not known for high smoking rates. I then went on and did a bit more research, and I found this from an article in July 2017:
The tobacco giant is pushing Marlboros in colorful ads at kiosks and handing out free smokes at parties frequented by young adults—tactics that break India’s anti-smoking laws...In internal documents, Philip Morris International is explicit about targeting the country’s youth. A key goal is “winning the hearts and minds of LA-24,” those between legal age, 18, and 24, according to one slide in a 2015 commercial review presentation...Philip Morris’ marketing strategy for India, which relies heavily on kiosk advertising and social events, is laid out in hundreds of pages of internal documents reviewed by Reuters that cover the period from 2009 to 2016...In targeting young adults, Philip Morris is deploying a promotional strategy that it and other tobacco companies used in the United States decades ago. A study published in the American Journal of Public Health in 2002 found that during the 1990s, “tobacco industry sponsorship of bars and nightclubs increased dramatically, accompanied by cigarette brand paraphernalia, advertisements, and entertainment events in bars and clubs.” With cigarette sales declining in many countries, Philip Morris has identified India, population 1.3 billion, as a market with opportunity for significant growth. “India remains a high potential market with huge upside with cigarette market still in infancy.”
Did you lie to the committee when you said Philip Morris wanted out of the cigarette business?
Can I add something? During the summer at Freeze the Industry we held a “plain party”, an educational night for our local communities. We went to an ice cream shop, stood outside, and basically educated the people who walked by, especially the youth, about the benefits of plain and standardized packaging. We showed them how appealing and attractive different types of cigarette packages can be.
For example, you've seen this one here. It was at the last committee meeting. This is the Vogue Slim pack. It leads young women who are vulnerable to social pressure about fitting in, to a need to look like the X, Y, or Z stereotype or whatnot, to think that if they took this sort of cigarette with this sort of branding and packaging, they would then look like the ideal person they wanted to be. In reality, it might just make them end up looking worse.
The point is that when we showed these young people what the new sort of package would look like, hopefully, they said they didn't want to hold it, they didn't want to be seen holding it, and they didn't want to smoke it. They wanted nothing to do with it.
I don't think this type of packaging is the reason that people smoke. I think making the decision to smoke is a much bigger decision than which brand you smoke.
At the same time, the reason I did not speak about plain packaging in my remarks is that, frankly, while there are negative impacts in terms of contraband, it's not going to have the impact on public health that you think it will. Just look at Superslim cigarettes. They're not a large portion of the market. Even if they disappeared tomorrow, it's not going to get you to 5% by '35.
Japan is the best example, because we've had heat-not-burn products there the longest. Cigarette consumption went down by 10% last year in Japan. I will bet anyone on the committee a hundred dollars that the year after plain packaging comes into play in Canada, cigarette consumption will not go down by 10%. It's a question of what are the most effective strategies. I think there are things that are being done on the margin, which we can debate, but I don't think they're going to get you to the goal you want, which is really to reduce the diseases associated with smoking.
Let me summarize Bill .
The Tobacco Act will become the Tobacco and Vaping Products Act. It will include provisions to protect young people from nicotine addiction and tobacco use. It will also give adults access to alternatives to vaping products that could be less harmful. I repeat, an alternative to tobacco use that could be less harmful. Moreover, it will protect the health and safety of Canadians in a variety of ways.
On one side of the table, they are saying they are concerned about the health of Canadians and young people; on the other side, they are talking business. I am concerned. The industry is talking out of both sides of its mouth. They say they are going to top the tobacco industry, but there is obviously a huge credibility problem there.
I need proof for you to convince me, Mr. Luongo, that you want to stop the tobacco industry. I would like to know how much money you are investing in closing your business. I do not think you are making any such investments right now. You should really be investing in addiction treatment or clinics. We are talking about nicotine today, but we could be talking about drug addiction in general.
For your part, our friends from the client service industry, especially convenience stores, you are caught in the middle. You do an excellent job of checking identification for resale, but at the same time you do not want to tell us what financial pressure the industry is placing on your association. I find that troubling because it calls into question your credibility. You should work on that to win my trust. For us as MPs and politicians, credibility and the code of ethics are what matter the most. We are judged and have no leeway, whereas you have a lot.
I would like to return to our young volunteers who have few resources, but who are concerned about public health, as the government is.
What do you like about Bill ? What changes would you like to see to improve the health of Canadians, especially youth, and to prevent them from starting to smoke in the future and thereby damage their health?
Yes. First of all, on the study in the tobacco control issue of 2016, my colleague and I did an extensive analysis of those papers, and the Cancer Council Victoria, which undertook the original research, responded with a press release saying that the survey was “quite explicitly not designed to assess quitting success or change in smoking prevalence but rather focussed on the immediate impact of the legislation...”. So all of those studies on tobacco control don't do what you just quoted them to have done, and the authors of the studies actually said that.
Turning to the PIR—which is a very, very impressive econometric technique that was undertaken—it found that there is a 0.55% decline in smoking prevalence as a result of the plain packaging policy. What the PIR did not report was that the sample error in their study was bigger than the policy effect size they found.
The other thing that is not clear from the study is that the smoker they built their model on was an unmarried Australian-born 14- to 17-year-old male with a tertiary qualification, employed full-time, but with an income of less than $6,000, and living in Victoria. Now, no such person exists, so it is unsurprising, when you model whether a person who does not exist gave up smoking, and your effect is smaller than the sample error in your data, that you would want to keep that a bit quiet.
The other thing is that the pseudo-R squareds were less than 10%, so while the analysis was very clever, it excluded price. It's entirely, utterly unconvincing.
Plain packaging was implemented in December, 2010. There was a phase-in period in September. If I recall correctly, it was about a three-month phase-in period.
The national household drug strategy survey is conducted every three years. The data came out in 2013, and then most recently for 2016. There was a big drop between 2010 and 2013, which in public debates was very much associated with the introduction of plain packaging. There was a one-month overlap between those periods.
Certainly the 2016 decline in smoking prevalence fell, moving from 12.8% to 12.2%, which is not statistically significant. Given population growth, the number of smokers in Australia had actually increased.
In terms of policies that have been introduced, graphic health warnings were introduced in Australia in 2006. As a public health exercise and a public information exercise, it was quite valuable. Packets are stored behind the counter and in a case. You can't see them ever. They must be transported from the storeroom to the counter in a bag, so you also can't see them being transported through the store. That was introduced in 2011, if I recall correctly.
There was a 25% increase in the excise on tobacco in 2010. That probably drove the change that we saw between 2010 and 2013. Certainly the decline in prevalence, which is a long-running thing from the early 1990s, stalled. At the same time, if you look at the U.K. over the same time period, vaping became quite popular there, and the prevalence of tobacco cigarettes declined quite precipitously.
There are all sorts of things going on here. Certainly, my critique of the evidence, the data from the national drug strategy survey, and the data from the Australian Criminal Intelligence Commission survey kind of indicates that plain packaging in and of itself is not having the desired effect. The plain packaging concept itself, the idea of enhancing the noticeability of the graphic warnings, in my opinion, has failed.
First of all, I want to thank all of the witnesses. I know that, for the tobacco industry and its allies, the health committee is not the easiest place to testify. I want to thank you for being here.
I find myself wondering if we're dancing around trying to prove that water is wet. I'm sitting here holding up a small package with a thin, little cigarette that has a little purple dot on it, and I'm listening to people tell me that they don't think that marketing or how a product looks makes it more attractive to a consumer. I think that's ludicrous. There's not a single Canadian who would believe that. Millions, maybe billions of dollars, is spent every year on sophisticated marketing to make a product more attractive to a person. What this legislation is really about is taking that away from a product that is an addictive carcinogen.
I don't think I need any studies to know that, if we made these cigarette packages less attractive, if we make the health warnings more prominent, if we remove lifestyle advertising that suggests to any user that smoking cigarettes is sophisticated and cool, that it will help with weight loss or make you in any way attractive, it will have a dampening effect on tobacco use over the long-term.
Does anybody here disagree with what I just said?