Finance Committee on April 30th, 2024

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

I will move this amendment and speak briefly to it, if I may.

[The Chair, Liberal, Peter Fonseca]

One moment, please. We're going to suspend.

[The Chair, Liberal, Peter Fonseca]

We're back, and we're on NDP-4.

MP Davies, I know you spoke with the legislative clerk, and he has explained how to do it.

[Don Davies, NDP, Vancouver Kingsway, BC]

It doesn't change the intent, and I'll explain it in a second, but because I didn't move NDP-2, there's a reference in NDP-4 that no longer makes sense. What I will do is move NDP-4 without (a), so I will be striking (a) and leaving the current (b) and renaming it (a).

I'll explain what it does, because it's really easy to understand. It increases the maximum fine for contravening the cost recovery fee provisions from $50,000 to $500,000. That maximum fine is already found in many other sections of the Tobacco and Vaping Products Act, so it harmonizes the penalty and makes it meaningful. I think we all know the tobacco industry has very deep pockets, and I don't think a $50,000 fine has the deterrent effect we want, especially if we're bringing in the cost recovery fee provisions. We want to send a clear message to the industry that we don't want them to contravene it and, if they do, that the maximum fine is meaningful.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Davies.

I do have some people who want to speak to this.

Mr. Turnbull, please go ahead.

[Ryan Turnbull, Liberal, Whitby, ON]

Thanks, Chair.

I don't know if we have any officials left here to answer questions, but I did have a couple of questions for them.

[The Chair, Liberal, Peter Fonseca]

Mr. Turnbull, they're all online. There are many who are out there waiting.

[Ryan Turnbull, Liberal, Whitby, ON]

Oh, okay. Thank you for that. I couldn't see them and was a little concerned.

I totally understand Mr. Davies' intention here to increase the fines and penalties for tobacco companies that fail to comply with labelling requirements. I would say, though, that the current TVPA abides by something called the “principle of proportionality”, which is sort of that the punishment has to fit the crime. I understand all of us want to see tobacco companies, which I agree have deep pockets, comply completely with the labelling requirements, but I'm just a bit concerned that perhaps changing the fees and fines they would get for non-compliance from $50,000 to $500,000 is a very big increase.

Maybe I could go to any of the officials online to outline any of the issues that they see would arise as a result of the proposed change to the penalty that Mr. Davies has put forward here.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Turnbull.

With the officials being online, we're going to have to test your mic before you answer. We're going to suspend right now.

[The Chair, Liberal, Peter Fonseca]

We'll return now to Mr. Turnbull's questions.

Go ahead, Ms. Johnson.

[Sonia Johnson, Director General, Tobacco Control, Department of Health]

Just to reiterate on the fines that are proposed with these amendments, we do have the necessary authorities and tools available to us to take immediate action to enforce the proposed cost recovery framework for the Tobacco and Vaping Products Act. We will not hesitate to use any of the authorities and tools we have available to us to compel the industry to pay the fees or charges under the act.

When we were looking at what fine to put forward in this regard, we were looking at proportionality. Because this is considered more of an administrative piece, we wanted to align it with other administrative types of fines within the TVPA.

It's correct to say there are higher fines within the TVPA that are at $500,000, but those are related more to health and safety provisions.

I just wanted to reiterate that we do have a number of tools available to us to recover the cost recovery fees from the tobacco industry, and we will not hesitate to use any of the tools available to us to ensure that the department does receive its money.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Johnson.

If Ms. Stewart doesn't have anything to add to that, we go back to Mr. Turnbull.

[Ryan Turnbull, Liberal, Whitby, ON]

I have a quick follow-up to that, if I may, for Ms. Johnson.

In terms of the reason it was set with a maximum of $50,000, can you confirm, then, that other administrative-type fees that are comparable to this are the standard, or that there's some information to back that up?

[Sonia Johnson]

Yes, that is correct. More administrative types of issues within the TVPA are set at $50,000, so this is proportional to that. Other fines within the TVPA, which are higher, are related to health and safety issues.

[Ryan Turnbull, Liberal, Whitby, ON]

Thank you for that.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Turnbull.

I have Mr. Lawrence and Mr. Ste-Marie.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

I thank my colleague, Mr. Davies, for bringing this amendment forward. For the reasons Mr. Davies stated, tobacco companies have deep pockets, and we, as Conservatives, are of course the party of law and order. We'll be supporting this amendment.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

We have MP Ste-Marie, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Excuse me, I missed the end of Mr. Lawrence's statement. Did he say he was going to vote for the amendment or against it?

Afterwards, I'll have some questions to ask.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

We'll be voting for the amendment.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Very well, thank you.

I thank Mr. Davies for submitting this amendment. I have to say that I'm not very familiar with the details of the law we're trying to amend here. I understand that there can be $500,000 penalties for health and safety offences. However, the case raised here concerns administrative problems. When administrative objectives are not met, a $50,000 penalty can be imposed.

Ms. Johnson, you said it was a question of proportionality. I have no sympathy for tobacco companies. As some of my colleagues have said, they have deep pockets. However, I'd like you to tell us what the effects would be on all Canadian legislation, whether in the tobacco sector or other sectors, if an administrative penalty of $500,000 were established as proposed in the amendment.

[Sonia Johnson]

That is correct.

Thank you very much for the question. I will answer in English.

This is just to make sure I'm clear in my response.

The reason for setting the penalty at $50,000 was that it was administrative, and that penalty is one tool of many that we could use to compel the industry to pay the charge it would need to pay the government as a result of the cost recovery framework.

In terms of what the implications would be, it really just explains why, when we put forth the amendments to the cost recovery framework, the penalty was set at $50,000. On changing the fee, I would say there's no implication from our perspective.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

MP Davies, please go ahead.

[Don Davies, NDP, Vancouver Kingsway, BC]

I have just a couple of final thoughts that pick up from my colleague's comments.

First, I would point out the obvious fact that this is a maximum fine. It doesn't mean that they're going to be fined $500,000. It would give discretion to levy a fine up to that amount.

I would imagine that all sorts of factors would be taken into account in setting an appropriate fine, whether it was inadvertent or it was a few days late, etc., all the way up to an egregious or repeat offender. As a maximum, $50,000 is too low when you're talking about tobacco, in my opinion.

Second, no tobacco company will ever have to pay it if they comply, which I expect them to do. This is not levying any kind of penalty; it's for companies that don't comply.

The other interesting thing to keep in mind is that the purpose of this is to have an enforcement mechanism for cost recovery. What is cost recovery? It is putting onto tobacco companies the costs that Health Canada has to expend to deal with the health impacts of their product. It's circular: At the end of the day, it comes down to enforcing health for Canadians. That's why I think it sends a strong message, in theory. It's entirely avoidable by tobacco companies; they simply have to comply with the cost recovery provisions.

I will conclude by saying the Canadian Cancer Society asked for this in testimony. In addition to having deep pockets, tobacco companies are very sophisticated, and they have proved for decades they will use every lever at their disposal. They will use every pressure point to try to have their products sold in Canada.

To me, as a government, if we're going to allow this very dangerous and addictive carcinogen to be sold in this country, it's very important that we make it clear that the costs of dealing with it will be enforced in a meaningful way.

For all those reasons, I would rather err on the side of sending a strong message to the tobacco industry than send a weak one.

I'll leave it there, and I will be happy to live with whatever decision my colleagues come to.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

I see no further debate on this.

Shall NDP-4 carry?

(Amendment negatived: nays 6; yeas 5 [See Minutes of Proceedings])

Shall clause 218 carry?

(Clause 218 agreed to on division)

Members, again, we're coming to a point where we have no amendments that I know of to clauses 219 to 233, and we need unanimous consent to be able to group those.