Thank you, Chair and members of the committee.
My name is Rob Cunningham and I am a senior policy analyst with the Canadian Cancer Society.
Thank you for the opportunity to testify before this committee today.
My testimony will focus on clauses 53 to 61 of Bill C-60, which contain a tobacco tax increase for the category described as “manufactured tobacco”, and roll-your-own tobacco in particular. We support this increase, and we recommend that all members of Parliament endorse these provisions.
Let me emphasize the crucial role that higher tobacco taxes play in reducing tobacco use, especially among youth, who have less disposable income. There are more than 100 studies that confirm the obvious: mainly, that as tobacco prices go up, tobacco consumption goes down.
Bill C-60 takes action on a long-standing loophole that has seen roll-your-own tobacco taxed at a much lower rate than regular cigarettes. It used to be that one gram of roll-your-own tobacco was needed to make one cigarette, but now, because of modified tobacco industry manufacturing practices to exploit the tax structure, only half a gram is needed to make one cigarette. Thus, the industry strategies have in effect reduced by half the tobacco tax rate on roll-your-owns.
Lower taxes lead to lower prices. That keeps many people smoking or results in more cigarettes smoked per day. Obviously, this is detrimental to public health.
The changes in the tax structure because of Bill C-60 take action in this regard. I have some examples with me. As you can see, Export 'A' says “100% more” right on the label. You get twice as many roll-your-own cigarettes as you used to be able to, because of the types of different manufacturing practices. It says on the label that you only need 0.47 grams to roll one cigarette.
This bill responds to that by helping to address a loophole where you had to get the same number of cigarettes for half the tax. We appreciate and support that. You can see that there are other brands that do the same thing and say “100% more”. They say on the label how much you get. That's a loophole that is bad for public health.
As well, federal tobacco tax rates had not changed since 2002, 11 years ago. Thus, a proportion of the tobacco tax change in this bill is merely an inflation adjustment.
The sales volume of roll-your-own tobacco varies across Canada, from only 1% of the market in Ontario to 13% or more of the market in five provinces. Thus, this tobacco tax change will be particularly beneficial in some provinces.
A surprising proportion of youths use roll-your-own tobacco. Data from the 2009 Canada-wide youth smoking survey found that among high school students 62% of boys and 30% of girls had used roll-your-owns in the previous 30 days.
This measure will raise a projected $75 million in revenue for the federal government. It should be noted that this tax increase will apply to other forms of loose tobacco, such as chewing tobacco, snuff, and water-pipe tobacco, in addition to roll-your-own tobacco. These product categories are far more popular among youth and young adults than those aged 25-plus and illustrate a further reason why Bill C-60 will reduce youth tobacco use.
I have some examples with me. This bill will apply to this new phenomenon among youth of hookah and shisha water-pipe smoking, with cherry, coconut, and orange flavours. It will also apply to the smokeless tobacco, such as cherry, mint, lime, and so on.
Tobacco use remains the leading preventable cause of disease and death in Canada, causing 37,000 Canadian deaths each year from cancer, heart disease and stroke, emphysema, and other diseases. The overwhelming majority of new smokers are underage youths, and tobacco taxes are a crucial part of a comprehensive tobacco control strategy.
The tax measure in Bill C-60 is a win-win for public health and public revenue. We urge all members of Parliament to support this measure.
Merci. I look forward to questions.