Health Committee on June 11th, 2009

[The Chair, Conservative, Joy Smith]

I call the meeting to order.

Today we want to welcome our witnesses to the health committee. From Action on Smoking and Health, we have Les Hagen, the executive director. Welcome, Les.

We have, from Casa Cubana, Glen Stewart, the director. Welcome. You're the director of marketing and product development, I believe. We also welcome Luc Martial, government affairs, Casa Cubana.

We have with us Distribution GVA Inc., with Vincent Albanese, president and chief executive officer, and Luc Dumulong, the vice-president. Welcome.

We also have with us Imperial Tobacco Canada Limited, with Tamara Gitto, associate general counsel, and Gaëtan Duplessis, director of research and development. Welcome.

We'll give each of you a chance to present for seven minutes. After that, we'll have questions and answers. We'll start with Action on Smoking and Health.

Mr. Hagen.

[Les Hagen, Executive Director, Action on Smoking and Health]

Thank you, Madam Chair.

Action on Smoking and Health is western Canada's leading tobacco control organization. ASH has contributed to the tobacco control movement for 30 years, and I have served as its executive director since 1989.

I thank the committee for recognizing the regional disparities in tobacco use by allowing me to participate in these important hearings. I would also like to thank my national colleagues for calling for amendments that will help to reduce health inequities in Bill C-32.

We congratulate the federal government and Parliament for taking concerted action to crack down on flavoured tobacco products and print advertising. These are important measures that will help to prevent tobacco use among young people. However, we have grave concerns about the current exemption for smokeless tobacco in Bill C-32.

“Smokeless“ is certainly not harmless. Smokeless tobacco contains over 3,000 chemicals and 28 known carcinogens. It is highly addictive and it has no safe level of consumption. The product contains a lethal mixture of tobacco, nicotine, sweeteners, abrasives, salts, flavourings, and various chemicals. In 1986, the U.S. Surgeon General declared that oral use of smokeless tobacco represents a significant health risk, and that it is not a safe substitute for smoking.

Young people are particularly at risk of nicotine addiction from smokeless tobacco, as they are often lacking the cognitive ability to fully appreciate the consequences and strength of the addiction until it's too late.

Unfortunately, Alberta is the epicentre of smokeless tobacco in Canada, and it represents about 40% of the total smokeless market. Over the years, the smokeless tobacco companies have aligned their products with Alberta's cowboy image of independence, risk-taking, and hard living. Prior to the sponsorship ban in 2004, smokeless tobacco products were promoted widely at rodeos throughout western Canada. The smokeless tobacco companies now have a limited presence at some of these events, in adult-only venues.

However, these companies have found other creative ways to target young people. Over the past two decades, the smokeless tobacco companies have steadily increased their product offerings to include a wide array of flavourings. Their sales have steadily increased with the introduction of flavourings, like peach, apple, wintergreen, cherry, mint, and vanilla. These fruit and candy flavourings are virtually identical to those that have contributed to the dramatic rise in cigarillo sales in recent years and they deserve equal concern.

It is therefore not surprising that significant numbers of teenagers in Alberta and other regions are attracted to flavoured, smokeless tobacco. According to the Canadian tobacco use monitoring survey, teens are three times as likely to have tried smokeless tobacco in the past 30 days compared with adults age 25 and over. The same survey also revealed that 15-year-old to 19-year-old teenagers represent 25% of total users, although this population is only 7% of the general population.

The Alberta numbers are even worse. The rate of smokeless tobacco among Alberta teens is almost double the national average. In fact, there are almost as many Alberta male teens using smokeless tobacco as there are using cigarettes. There's no question that teenagers in Alberta and Canada are using smokeless tobacco products at a disproportionate rate. As you heard from Sam McKibbon earlier this week, teens are attracted to fruit and candy-flavoured, smokeless tobacco products in the same way they are attracted to flavoured cigarillos.

I grew up in a farming and ranching community in southern Alberta, where smokeless tobacco was not uncommon. However, I've never seen a rancher or a cowboy use peach, or berry, or cherry chew. As the industry's own internal documents show, these flavoured products are intended to help graduate adolescents into harsher products like Copenhagen or like cigarettes, once they become adults.

Here's a direct quote from an internal industry document:

New users of smokeless tobacco--attracted to the [product] for a variety of reasons--are most likely to begin with products that are milder tasting, more flavoured and/or easier to control in the mouth. After a period of time, there is a natural progression of product switching to brands that are more full-bodied, less flavoured, have more concentrated“tobacco taste” than the entry brand.

We cannot overlook the contribution of smokeless tobacco to cigarette addiction among young people, as they graduate from one harmful product to another. Recently, Philip Morris, the world's largest cigarette company, purchased the U.S. Smokeless Tobacco Company, which produces Skoal and Copenhagen. This telling marketing strategy should not be lost on committee members.

I've submitted two detailed backgrounders on smokeless tobacco use in Alberta, which were prepared by Alberta Health Services and its affiliates. The documents reveal that smokeless tobacco companies have been targeting teens as young as age 15 by adding flavourings and sweeteners to make their products more palatable. These backgrounders confirm the problems associated with flavoured, smokeless tobacco use in Alberta and beyond.

In closing, we urge the federal government and Parliament to take regional disparities into account when considering Bill C-32.

Health Canada advocates publicly for the reduction of health inequities, and the current smokeless exemption is one such inequity. Flavoured, smokeless tobacco is having a disproportionate impact on youth, especially those living in rural Canada, northern Canada, and the prairie provinces. We encourage the committee to support an amendment to remove this exemption and to give these kids a greater chance to remain tobacco-free.

[The Chair, Conservative, Joy Smith]

Thank you.

Could we now go to Casa Cubana?

Mr. Stewart, I believe you're going to lead off, or is it Mr. Martial?

[Luc Martial, Government Affairs, Casa Cubana]

I'll lead off, if that's okay.

I'd like to thank the committee for allowing us the opportunity to present today. With me, as you mentioned, is Glen Stewart. He is the director of marketing and product development, so for any questions you may have with regard to the history of the product or the industry itself, I'm sure Mr. Stewart would welcome sharing that information with you. Mr. Stewart is also a 30-year veteran in the industry, in both the cigarette markets and the cigar markets, if anybody wants actual facts about these products.

[The Chair, Conservative, Joy Smith]

Excuse me, Mr. Martial, can I just stop the clock for a minute? You have no notes to present to the committee? You're just doing an oral presentation?

[Luc Martial]

Yes, that's right, if that's okay.

[The Chair, Conservative, Joy Smith]

It would be nice to have some documentation. If you could forward it to the clerk at some subsequent time, I'd appreciate that.

[Luc Martial]

Absolutely.

[The Chair, Conservative, Joy Smith]

Okay. We'll start the clock again. Thanks.

[Luc Martial]

As for me, I actually have been doing government affairs for Casa Cubana for the last six or seven years now. I'm not a lawyer. Interestingly enough, I'm actually a tobacco control advocate. I've been on this file for the last 18 years.

Perhaps unlike any other tobacco control advocate in this room, I've actually sat at every side of the policy table in tobacco and tobacco control. I worked as a policy analyst with the Non-Smokers' Rights Association of Canada, as a data specialist and media relations manager with the Canadian Council on Smoking and Health, and as director of the National Clearinghouse on Tobacco and Health. I worked in Health Canada's tobacco control program, in research, surveillance, evaluation, and policy and planning. I'm here to say that Bill C-32 is basically the perfect example of everything that's wrong with the tobacco control movement in Canada. This committee cannot allow this bill to become law in any form for two reasons.

Number one, there's absolutely no relevant research that supports in the least banning flavours in tobacco products, let alone banning singles, for example.

Number two, as much as people may hate the industry or people in the industry, the reality is that if you pass this into law, you will cause much greater harm to society. It is a fact that if you ban these products, you're essentially giving exclusive market rights for these products to a growing and existing illicit trade in tobacco, which includes flavoured products, according to the RCMP. You will be putting much more tobacco, much cheaper tobacco--

[The Chair, Conservative, Joy Smith]

Excuse me. You cited the RCMP. Could you give us your documentation citing the RCMP? This is the first time I've heard that.

[Luc Martial]

Absolutely. That documentation has already been forwarded to Monsieur Etoka, and it basically contains all that information.

We do know for a fact that if you ban these products, many more, much cheaper, and completely unregulated products, both flavoured and unflavoured, will find their way into the hands of Canadians who are already breaking the law, and especially kids as well. You will be putting tens of millions of dollars into the hands of criminal networks, which, according to the RCMP, are also involved in drugs and weapons trafficking. You'll be putting thousands of people out of work. You will be throwing tens of millions of dollars, if not hundreds of millions of dollars, in government revenue right out the window. You will be providing absolutely no benefit to public health.

Now, in terms of how I justify saying there's absolutely no relevant research, this is not a new issue. Anti-tobacco groups have been going around from province to province, trying to find any unsuspecting government or politician who would propose a government bill or a private member's bill to ban these products. Effectively, I've had the occasion to actually meet with politicians and government departments on this issue. On this issue alone, I have contacted Health Canada a number of times with regard to the lack of relevant research, and we've been requesting that they actually do research.

Quite interestingly enough--

[The Chair, Conservative, Joy Smith]

I'm sorry to interrupt you again, Mr. Martial. The interpreters are telling me they can't keep up to you.

[Luc Martial]

Do I have to go more slowly? Okay, I'm going to need eight minutes then.

[The Chair, Conservative, Joy Smith]

My apologies for interrupting you a third time. It's just that we'd like your testimony on the public record.

[Luc Martial]

No problem. I'll go a little bit slower.

Quite recently, I think what's most relevant is that I had a meeting with the Health Canada tobacco control programs, specifically the director of research, surveillance, and evaluation, and probably the foremost expert for the federal government, Dr. Murray Kaiserman. I've known Murray for the last 18 years throughout my time in tobacco control. I used to work for Murray. I came to Murray and said, “Listen, Murray, I have this issue here. I'm seeing a lot of things that are being published in the papers by anti-tobacco groups and some politicians about these products, the market, and the industry, that in my analysis of all the research that's available are tantamount to outright lies. At the very least they're gross misrepresentations of the facts--”

[The Chair, Conservative, Joy Smith]

Mr. Martial, I'm very sorry, but the interpreters can't keep up to you. I've stopped the clock, so don't worry about that, but you must slow down a little bit so they can translate.

There are some people on our committee who are actually more comfortable using the French language as well.

Thanks.

[Luc Martial]

All right.

Most recently, May 21, after having written to every member of Parliament asking for their support in getting Health Canada to actually do research on this, after having sent in submissions, after having written to the department asking them to do research on these products, I finally got a meeting with Dr. Murray Kaiserman.

I actually took the time to read the research, from the youth smoking survey to the Canadian tobacco use monitoring survey. I looked at all of that; that's what I've done all my life. So I met with Murray and I said, “Listen, Murray, I don't understand this. From everything I see, this is a non-issue. The vast majority of people who consume these products are of legal age to do so. The majority are over the age of 25. Does Health Canada have any relevant research that in the least tells us who's consuming exactly which products, in what quantities they're consuming it, the frequency of their consumption, the origin of the product they're consuming—is it contraband, is it legal, is it native?—the source of this product, where they are getting it from, and/or how flavours impact the decision for anyone, let alone kids, to decide to start smoking or continue smoking?” Murray says to me, “No, Luc, we don't have that type of research.” Obviously, they had research with regard to emissions testing and so forth. I said, “Well, are you planning on undertaking any research?” He said, “No, and I'll tell you why, and it's for two reasons, Luc. Number one, the market is too small.” I said, “What are you talking about?” He said, “Well, the market is too small, so that whatever research we could do through CTUMS would be unreliable, in terms of data. We'd have to do specific research. And number two, we're not going to be doing any research. The reality is, if we don't do research, we don't have to release findings to the public.”

Then he also said something interesting to me. He said, “You know, Luc, it's not only an issue that minors are getting access”, and he conceded that the vast majority of people who consume flavoured little cigars and cigarillos are of legal age to do so, as mandated by the Government of Canada. He said, “The problem, Luc, is that the products look good, and it's against the spirit of what we're doing here to allow any product to be appealing to any-age smoker.”

I took that, basically, to be Health Canada breaching its mandate of education information, basically forcing lifestyle choices on people whom they've given the right to make that choice.

I know you're talking to Health Canada later on today. Ask them the very specific question: Do you have any data that tells us in what packaging format people are consuming these? We're talking about banning singles because they're so affordable for kids. How do you know that kids are actually purchasing these singles? Health Canada has absolutely no research.

Not long ago, the Government of Ontario would have passed the law; it's still not enacted. I had the exact same discussion with ministry officials and departmental officials, who basically said, we don't have research, we're not going to do research, we're not going to monitor it because it's too expensive, we've had no discussions with the RCMP and the OPP to find out how this will impact contraband, and we have no specific health objectives. They had no expectations about what would happen if you ban these products. Do you think these products will actually cease to exist? Do you think kids will not be consuming these products? Do you Canadian will not be consuming these products?

It's the same situation we have here with Health Canada. There is absolutely no research that supports in any way banning singles or banning any flavour. We actually have a government that has no specific health objectives or expectations, and my sense is that it's so we can't hold them accountable for it.

The reality is that largely everything that's been publicly promoted about the products, the market and the industry, is tantamount to an outright lie. It's not a new product. Cigarillos are not a new product to the marketplace. It's not big tobacco that's behind these things. It's not big cigarette companies who are manufacturing these things. We don't have candy and ice cream flavours in these little cigars and cigarillos. These flavours exist in blunt wraps, which aren't meant for smoking tobacco, as everybody knows. And in terms of it being price-affordable, Murray actually was nice enough to agree with me that it's actually cost-prohibitive to have a unit sale of $1.25. The cheapest cigarillo on the market is still ten times more expensive than a contraband cigarette.

[The Chair, Conservative, Joy Smith]

Thank you, Mr. Martial. I've given you extra time.

We'll now go to Distribution GVA, Mr. Albanese.

[Luc Dumulong, Vice-President, Distribution GVA Inc.]

With your permission, I'll be making the presentation for Distribution GVA.

[The Chair, Conservative, Joy Smith]

Okay. Thank you.

Mr. Dumulong.

[Luc Dumulong]

On behalf of our 11,000 Canadian customers and retailers and our employees, thank you for having us here today and for allowing us this opportunity to share with you our concerns about Bill C-32 .

Distribution G.V.A. is a small business established in 1997 which employs approximately 80 Canadians in Ontario, Quebec, Nova Scotia, New Brunswick and Newfoundland and Labrador. We distribute more than 1,000 different tobacco products, including high quality cigars like the Davidoff brand, as well as cigarillos and pipes and accessories to more than 10,000 retail outlets.

We are an important importer and distributor for convenience stores, tobacco shops and duty-free boutiques. Over 10,000 retail outlets in Canada are serviced by our organization and we remit in excess of $20 million a year in tobacco taxes.

Distribution GVA Inc. is a responsible corporate citizen and a major importer and distributor of cigars. It is essential that the Canadian government is aware that Distribution GVA has never, ever promoted any of its flavoured tobacco products to minors.

We are aware of the fact that tobacco products are health risks and that these products are not destined to be consumed by individuals who are not old enough to buy the products legally. The consumers of our products are adults, and we are opposed to the fact that minors are able to obtain access thereto.

TheMinister of Health has announced that her government intends to establish a prohibition regime on all flavoured tobacco products through Bill C-32. If the said bill is adopted in its present version, this will result in the layoff of the majority of our employees and may even force the closure of our company.

Bill C-32, while perhaps well-intentioned, is needlessly too wide in its scope in its present version, due to Health Canada's elemental lack of knowledge with respect to cigar products. Bill C-32 will prohibit products that have been on the market for decades.

I have brought some products to show you what kinds of products will be banned with this bill. They are clearly not kids' products. These have been on the market for about 25 years. Some of these are little cigarillos made in Europe, and they have also been on the market for the longest time. They have flavours and they're enjoyed by adults. These will all be banned if the bill is passed as is. I have more. I can show you more.

Anyway, I'll continue. I think you have pictures of these products in annex 1.

The latest statistics demonstrate clearly that flavoured cigarillos are products that are destined for adults and consumed by adults. According to the results of the latest Canadian tobacco use monitoring survey, cycle 1, which Mr. Martial was talking about earlier, conducted by Health Canada and Statistics Canada, 91% of the flavoured cigarillo consumers are adults or are of age for buying the product. Sixty per cent of those people are over 25 years old. So saying that these are kids' products is not very true.

These findings raise an important question. Before passing this legislation and imposing a prohibition on an entire legitimate category of tobacco products, it is important to discover the manner in which the remaining 8 or 9% of consumers who are not adults obtain access to these products.

For example, according to Health Canada, access to cigarettes through the contraband tobacco market is much greater than access to flavoured cigarillos. Unfortunately, we fear that because of the speed with which the Government intends to adopt the present law, this important question will remain unanswered and will unnecessarily penalize the thousands of individuals who are employed in the legal tobacco trade.

What the Statistics Canada survey demonstrates is that the flavoured category did not actually create more smokers per se, but actual smokers switched from cigarettes to flavoured cigarillos. We have also noted that a large majority of flavoured cigarillo consumers were originally cigarette smokers who have switched to our products, for multiple reasons.

From conversations with some of these consumers, we have learned that they prefer our product to the cigarettes they used to smoke. In many instances, these consumers were in the process of reducing their tobacco consumption with the use of our products. They told us they smoked less when they smoked flavoured cigarillos than they did when they smoked cigarettes. Some have also told us that they were trying to quite smoking, and that since they smoked less of these, it was a way to reduce their consumption and eventually quit smoking. I am not the one saying this; the consumers of our products are saying this.

We cannot understand, then, the urgency to adopt Bill C-32 in its present form and why the government is finding it okay to create such an emergency to proceed on something that represents one-half of 1% of the total tobacco market in Canada, while at the same time making an exception for menthol cigarettes. According to the health minister, they're marginal, and this is why they're making an exception, but they're at 2%. So one-half of 1% is not okay, but 2% is okay?

One can easily deduce that the 400 million cigarillos market will be claimed by the big tobacco manufacturers. Are the big tobacco multinationals behind this bad piece of legislation? Have the anti-tobacco lobbyists been shamelessly manipulated by big tobacco?

Health Canada has mentioned to a representative--and Mr. Martial talked about it earlier--that they have no intention of undertaking any unnecessary research. That supports the desire to introduce a complete prohibition on a whole category of tobacco products that, in some cases, have been on the market for 25 years, as I've said. At the present time, the government is essentially asking Canadians to allow it to prohibit a complete category of products without supporting such a measure with the proper research.

However, such legislation will have direct and wide-ranging consequences on the financial security of thousands of Canadians and will ensure an increase in tobacco contraband for these products. Accessibility to minors will also be increased through the tobacco contraband channel, because they are never asked for proof of age.

Furthermore, in its present format, Bill C-32 will come to unquestionably cause, not solve, problems of criminality already well documented in our society. In effect, once we put aside the emotion associated with the debate concerning minors, flavoured tobacco products, and the issue of tobacco consumption, the prohibitions proposed by the Government will not address the problems associated with minors' access to tobacco products. The illicit contraband trade in tobacco presently offers—

Let me show you what you can now find on the market, in schoolyards and just about everywhere: plastic Ziplock bags containing 200 flavoured cigarillos.

[The Chair, Conservative, Joy Smith]

Mr. Dumulong, I've given you some extra time, but could you wind up your presentation now so that we have time for Ms. Gitto as well?

[Luc Dumulong]

I thought we had seven minutes per person.

[The Chair, Conservative, Joy Smith]

I have you right on here.