Ontario judge begins hearing arguments over landmark $32.5-billion tobacco settlement

By Canadian Press on January 29, 2025.

TORONTO — An Ontario judge has begun hearing arguments about whether to approve a landmark $32.5-billion settlement that would see three major tobacco companies compensate provinces, territories and ex-smokers.

The settlement between the companies — JTI-Macdonald Corp., Imperial Tobacco Canada Ltd., and Rothmans, Benson & Hedges — and their creditors received unanimous support from those creditors in a vote held in mid-December.

Ontario Superior Court Chief Justice Geoffrey Morawetz is scheduled to hear submissions from companies and other parties this week and will decide whether it should be approved.

The proposed deal includes more than $24 billion for the provinces and territories to settle lawsuits they brought against the companies for health-related costs due to tobacco use and another $4 billion for plaintiffs in two class-action lawsuits heard in Quebec.

Another $2.5 billion is earmarked for Canadian smokers not included in the Quebec lawsuits, and more than $1 billion would go to a foundation to fight tobacco-related diseases.

The case originated with a landmark ruling from Quebec that found the companies had chosen profits over the health of their customers and ordered them to pay about $15 billion to plaintiffs in the two class-action lawsuits.

The case then migrated to Ontario in 2019 where the companies sought creditor protection after the Quebec Court of Appeal upheld the initial ruling.

The proposed deal was crafted by the monitors appointed to each company in collaboration with a mediator, capping off more than five years of confidential negotiations.

This report by The Canadian Press was first published Jan. 29, 2025.

The Canadian Press