Absolutely.
Mr. Chair, members of the committee, thank you for inviting me here to speak with you today.
I'm Peter Luongo, the managing director of Rothmans, Benson & Hedges Inc., a fully owned subsidiary of Philip Morris International. I'm here to talk with you today about our vision for the industry, how that vision aligns with our shared goal of reducing smoking rates in Canada, and the implications of Bill S-5 for that objective.
First, our vision for the industry or goal, put simply, is to stop selling cigarettes. We can do this in a way that makes sense for us as a business and for society as a whole by switching existing adult smokers to alternative, smoke-free products that significantly reduce their exposure to the chemicals in cigarette smoke that are linked to disease. You may be thinking, if you want to stop selling cigarettes, why not simply stop? However, if we were to simply do that today, every single adult smoker in Canada who smokes our brands would most likely switch to another brand of one of our competitors. This would not serve the long-term goal of eliminating smoking. However, we believe that by introducing new, reduced risk products and by educating adult smokers on the benefits of switching, we can reach a point where we can envision a phase-out of cigarettes. We know this is a massive undertaking and will require time and support from the government and other stakeholders, but it is a goal we should all share.
You may also be thinking, why now? What has changed? Put simply, it's technology. For more than a decade PMI has been developing a series of smoke-free alternatives, products that are designed to replace cigarettes for adult smokers who are not seeking to quit tobacco altogether. As an industry, we finally have products that both satisfy adult smokers and also significantly reduce their exposure to chemicals. This is based on the simple fact that nicotine, while addictive and not risk-free, is not the primary cause of smoking-related diseases but it is ultimately a large part of what smokers are seeking from cigarettes.
As the old quote goes that was mentioned earlier today, “People smoke for the nicotine but they die from the tar.” It is the burning process, the combustion that occurs when tobacco is lit on fire that creates this tar, not the mere presence of nicotine. All of the alternative products we are looking to introduce have several things in common. They all produce an aerosol vapour, and they all contain nicotine to address smoker preferences, but they also all eliminate combustion. By eliminating combustion, we dramatically reduce users' exposure to these harmful chemicals if they fully switch to these products. We know from the millions of smokers in other countries who have already switched that we are talking about reality, not theory.
I'll give you a bit of background to what we are doing today in Canada with one of our alternative, smoke-free products called IQOS. It is an electronic device that heats specially manufactured tobacco sticks to release an aerosol vapour. The vapour contains nicotine and is similar to the vapour produced by an electronic cigarette. When compared to a reference cigarette smoke, the aerosol vapour produced by IQOS contains, on average, 90% fewer harmful and potentially harmful constituents linked to smoking-related diseases. Looking specifically at the 14 carcinogens identified by the International Agency for Research on Cancer, we see the reduction is greater than 95% on average. Recently, an advisory committee to the Food and Drug Administration in the United States concluded that switching completely to IQOS can reduce smokers' exposure to harmful smoke compounds by a vote of eight to one.
To be clear, we are not saying that smoke-free alternatives are risk-free. They are not for non-smokers, they are not for youth, and they are not for people who smoke today and who want to quit tobacco and nicotine altogether. Smoke-free alternatives, such as IQOS, are for adult smokers who will otherwise continue to smoke without a satisfactory alternative. With over four million adult smokers in Canada today, it is imperative that we provide such alternatives.
If IQOS is legally available today in Canada, you may be wondering what the problem with Bill S-5 is. To start, I think we can agree that for someone to switch to a product, they need to know that it exists and how it compares to cigarettes. However, if Bill S-5 is passed in its current form, it will be illegal for me to share with Canadian adult smokers everything I have told you so far about how IQOS compares with cigarettes. Specifically, clause 27 of Bill S-5 prohibits anyone from making comparisons between any two tobacco products or their emissions. Because the IQOS unit heats tobacco, it would be considered a tobacco product. As a result, we would not be able to clearly explain the differences between IQOS and any other tobacco product, including cigarettes, regardless of what the scientific evidence showed to be true.
It is important for the committee to remember that this is not just about the product that we, as RBH, have on the market today. Our competitors in the industry have products that also contain tobacco and that operate under similar principles of avoiding combustion while still delivering nicotine. It is not only about products that have already been invented; it is recognizing that through additional research and development, these categories will continue to evolve to provide smokers with ever more and better alternatives in the future. As drafted, if there is a tobacco product that is proven to be of lower risk, there will be no way to explain that fact to consumers without further amending the legislation, which could be a very lengthy process. During this time, you would have millions of adult smokers in Canada making choices about their health without having all of the relevant information and access to the best available science.
Therefore, our recommendation is that clause 27 be amended to create regulatory power and to put tools in place to take advantage of the opportunity that we believe these products represent, and to have regulations reflect the latest available evidence. The Senate modified a similar section of this bill dealing with vaping products so that, through regulations, authorized statements could be created by Health Canada that strike a balance between providing adult smokers with the information they require to make informed choices while at the same time preventing them from being given a misleading impression. A similar change to the tobacco section of Bill S-5, giving Health Canada the power to create tailored regulations going forward, is a reasonable and balanced step for this committee to take.
Now, you don't have to believe everything I've said today. You don't even have to believe that IQOS is a better choice than smoking. You only have to believe that it is possible for a tobacco product to exist that has lower risks than cigarettes, and, if it is possible, I think we should all be able to agree that adult smokers in Canada have a right to that information and that the law should provide flexibility for regulations to reflect that fact.
Before I conclude, it's also important to recognize that given the ongoing evolution of these categories, we will continue to need to study and update our knowledge of these new alternatives. Our second recommendation for this committee is that in your report on Bill S-5, you recommend that the Government of Canada, in the upcoming federal tobacco control strategy, commit to funding research into smoke-free alternatives, including heated tobacco products and electronic cigarettes, to help inform future policy discussions with evidence that is entirely impartial. Doing so will provide legislators and regulators with substantiated third-party information regarding the science behind smoke-free alternatives, and better enable a more fulsome dialogue about the potential of harm reduction in tobacco to achieve the goal of “5% by '35”, a goal we all share.
Thank you very much.