My name is François Damphousse. Since 1995, I have been the Director of the Quebec office of the Non-Smokers' Rights Association. I would like to address a few points and then give the floor to my colleague Rob Cunningham from the Canadian Cancer Society. He is going to talk to you about the measures we would like to recommend for controlling the problem.
First, the main reason the health insurance community is interested in eliminating tobacco smuggling is that taxation is the most effective way to reduce smoking. In the file that was distributed to you, the first document is entitled "A National Strategy to Reduce Tobacco Use in Canada". Section 5.3 talks about priorities for action to reduce tobacco use in Canada. In the first section, which deals with policy and legislation, the first point is taxation. That is how important this measure for combating tobacco use in Canada is.
It is of great importance that reducing taxes not be used as a measure to control contraband. I would invite you to look at the document entitled "Canadian Tobacco Use Monitoring Survey". At page 3, there is a graph on the prevalence of smoking in Canada from 1985 to 2008. The blue columns, which represent the group aged 15 to 19, show that from 1985 to 1991, smoking declined. However, in 1994, when taxes were reduced at the federal level and in some provinces, tobacco use among young people aged 14 to 19 rose gradually until 1997-1998, the year when the federal Tobacco Act came into force. That was when taxes started being gradually increased.
If you continue reading the graph, you see that it a plateau was reached in 2005-2006. This shows that smuggling started up again in Canada. It is of great importance that the federal government not reduce taxes. That would be catastrophic, particularly for the most vulnerable group, our young people. We believe the government should continue its current strategy, which is to implement policies to control contraband tobacco.
In fact, as the group before us said, there are indications that contraband is starting to decline in Canada. In the Quebec government's last budget, it said that revenue from tobacco taxes rose by $65 million over the previous year. That increase in revenue is attributed to measures token to combat contraband. Even the tobacco companies, including Philip Morris International, which recently purchased Rothmans, Benson & Hedges Inc. in Canada, in its last annual report, noted an increase of 3 or 4% in legal tobacco sales. There again, the increase is attributed to stronger measures being implemented by the government. That is why we strongly recommend that you continue down this road.
That being said, in 2008 the RCMP's Contraband Tobacco Enforcement Strategy was announced, but as well, a task force was set up to make recommendations for controlling the problem better. We have been waiting for the recommendations for two years but we still have no news. We are anxious for this task force to submit its recommendations. We have met with several people from the federal government, but we have been given no information about this. This situation requires your attention. This is a serious public health problem. We are anxious to see these measures announced.
Reference was made to $20 million. Ms. Mourani asked a question about this. In 2008, the government announced an investment of $20 million over four years to combat contraband. For a problem that costs both the federal and provincial governments billions of collars, we think $5 million to combat contraband is not a large amount.
I would like to come back to what Mr. Bertrand said about agreements between the governments and the three Canadian tobacco companies relating to their role in contraband during the 1990s. In those agreements there is a protocol at the end that specifies that $50 million should be allocated to help the federal government fight contraband.
That is stated in the agreement with Imperial Tobacco and Rothmans, Benson & Hedges Inc. For reasons we are unaware of, there was no figure stated in the last agreement with JTI-Macdonald Corp, which has just been signed. We can assume that more than $100 million should be allocated to fighting contraband. That would be a great help in implementing the task force measures, which we are waiting for.
What are they waiting for, to use that money? We think the $20 million is really not adequate.
Thank you. I will now give my colleague the floor.