Health Committee on June 20th, 2011

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much for that.

I come from Oshawa, and we have a lot of convenience stores. They're small businesses. Whether or not you like cigarettes as a product, they are a legal product. These businesses make a significant amount of money from their cigarettes and pop.

Do you have a plan in place for managing old packages that have already been purchased by convenience stores? I know some smokers, and they always like the freshest product. When the new labels start to come in, what's going to be done with the old product that some of these small businessmen have just sitting on their shelves?

[Caroline Ferland, General Counsel, Corporate, Imperial Tobacco Canada Limited]

We do not have a plan in place at this point. We will come to one when the time comes in the implementation, which is 270 days in the current scenario.

Every company might act differently as to how this is operated at retail, but typically the way we would operate is that around the time of the deadline by which they have to stop selling products with the old warnings, we would first have our sales representatives go into their stores and package up the products with the old warnings. We would take those back as what we call “unsaleable returns”. The retailers would be credited, basically, for those products.

[Colin Carrie, Conservative, Oshawa, ON]

Is the extra expense for the small convenience store owners to hire people to maybe take things off the shelves or to repackage, as well as the cost of sending things back and forth, something your companies are going to be absorbing, or is it something that the small business is going to have to take out of its own pocket?

[Caroline Ferland]

In the case of our own company, typically our own salesperson would take care of that. It is difficult for me to assess whether or not they would be faced with those costs for the products of other companies.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much.

Mr. Cunningham, we're looking at the international stage right now with the implementation of these new regulations. Could you let the committee know how Canada will compare internationally for tobacco control?

[Rob Cunningham]

With respect to package warnings, Canada will be in a position of world leadership. Canada will not have the biggest warnings in the world. Australia is soon to have about 82.5%, with 75% on the front and 90% on the back; Uruguay already has 80%; there are some other countries, such as tiny Mauritius, which has 65% on average on the front and back.

These regulations are outstanding and will put Canada in a position of world leadership. One thing to note is that Canada will be the only country to have warning requirements and message requirements inside the package. Taken as a whole, that must be assessed in terms of the quality of the Canadian regulations.

[Colin Carrie, Conservative, Oshawa, ON]

Do you also have statistics you can give the committee on what we have seen happening with the rates of smoking in Canada since we originally implemented tobacco warning labels?

[Rob Cunningham]

Prior to the previous regulations for picture warnings coming into force, the smoking rate was 24% among Canadian adults; it has fallen to 18%. Among youth 15 to 19 years, the rate has fallen from 28% to 13% in the same time period. There has been a tremendous decline while the picture warnings have been in force. Other measures, of course, were implemented as well.

[The Chair, Conservative, Joy Smith]

Thank you, Mr. Cunningham.

We'll now go to Dr. Fry.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Thank you very much, and thank you all for coming.

I want to ask a simple question, because again I am new to the committee. I haven't been here before. There is one little confusing point that I want to clear up.

The Tobacco Products Information Regulations talk in subsection 8(1) about the test methods for obtaining information under seven categories. Those categories have now been cut to four for the Tobacco Reporting Regulations, and only for constituent parts of the cigarette, but not with regard to emissions.

Is that change going to affect anything, in your opinion? If so, what, and how will companies be required to report emissions in the future?

[Rob Cunningham]

I don't think there is anything problematic with that change. It will not directly affect what's going to be on the label. There will be a change to the label, so that instead of having tar and nicotine numbers--which we now know are misleading, because humans don't smoke like machines--there will be a qualitative descriptive statement with respect to toxic emissions. We support that. It's consistent with international guidelines.

There'll be ongoing reporting regulations whereby companies will have to report information to Health Canada that Health Canada can use to assess subsequent steps with respect to future regulations, initiatives, company representations, and so on, but in terms of these regulations, the same testing will not be required for the side panel.

[Hedy Fry, Liberal, Vancouver Centre, BC]

You're saying you don't think there's going to be any difference in the ability to report. I was concerned about emissions as opposed to constituent components.

[Rob Cunningham]

Any company that does import will have to comply with the regulations, just as if they were a domestic manufacturer. They have an ongoing ability to import, and companies will still be able to import, but yes, regulations have to be complied with.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Thank you.

I'm also very interested in the inability to meet the target deadline, which Mr. Haslam has been speaking about. You said that you won't be able to get the machinery in time and that obviously you cannot walk up to a bus queue and find people who could run your machinery. I accept both of those statements as being fairly valid.

If you knew that these were coming down, why didn't you get the machinery? At least you could have that. You didn't need to know what is to be put on the packaging before you got the machine. Could you not have gone around looking for people to potentially hire once the legislation was passed, people who have the ability and the technical experience to do it?

[David Haslam]

Typically it takes 10 years to amortize a piece of machinery. You're talking about six months' volume, and then there's no work to come in afterwards, so no, we're not going to go out and invest in that. It's not a smart investment.

To train people, we run a three-year apprenticeship program. We can't bring those people in and then just have them stand there waiting. We can't lay them off; that's not fair to the people either.

What we want to try to do is manage it with the resources we have at hand and make sure that our employees.... They will be very busy over the next 12 months, and they will enjoy that, but no, we can't hire people from bus lineups, I'm afraid.

[Hedy Fry, Liberal, Vancouver Centre, BC]

I am very confident in your ability to meet the deadlines because I know you're inventive and innovative.

[David Haslam]

I'm flattered.

[The Chair, Conservative, Joy Smith]

Thank you, Dr. Fry.

We will now go to Mrs. Block.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Madam Chair.

I'd like to thank each of our witnesses for joining us here today. I appreciated the opening comments you made.

I'm a new member of this committee, but I'm aware, as my colleague from across the way mentioned, that this is a process that has been ongoing for quite some time. In fact, we heard from Health Canada that health warnings on packaging should not be a stand-alone approach but rather should be part of an overall tobacco reduction strategy.

My question is for you, Mr. Cunningham. Can you tell me what level of participation you had in the development of this strategy with Health Canada?

[Rob Cunningham]

I was involved through the Canadian Cancer Society. They and other health organizations were actively consulted during the regulatory development process. I know that tobacco manufacturers were also consulted as part of that process, which is Health Canada's approach. I believe that our considerations were taken into account.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

In the tobacco products labeling regulations, sections 12 to 16 set out the proposed requirements for health warnings on tobacco products. Is it your view that these requirements adequately respond to the concerns raised by the stakeholder groups that participated in designing the strategy?

[Rob Cunningham]

I think that taken as a whole, the regulations are outstanding. The 75% size is especially important for improving the impact. The images are far better, as a whole, than the current images on packages. There's been improvement. There's been learning. It's always possible to identify things that you could do better, but these regulations are outstanding as is.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Okay. You just mentioned that there's been improvement in terms of the images that have been put on packages and the warnings.

Can you tell us what evidence there is that the increased warning messages are effective?

[Rob Cunningham]

There's enormous evidence. Of course, in 2000 this committee received considerable evidence, commissioned by Health Canada, that was available otherwise in Canada or internationally. Since then, Canada being the first country to acquire picture warnings, there are now more than 42 jurisdictions and countries that require picture warnings. The evidence in studies continues to grow.

Here beside me you have essentially a mountain of new evidence that has occurred in the last 10 years in Canada and internationally. It's very impressive, and the committee can be assured that these regulations go in the right direction.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Do I have any more time, Madam Chair?