Statement from Minister McPhee supporting the court filed proposed plan for tobacco compensation

Minister of Justice and Health and Social Services Tracy-Anne McPhee has issued the following statement:

“On Thursday, October 17, a proposed Plan of Compromise and Arrangement was filed with the courts detailing a resolution for ongoing tobacco litigation in Canada.

“The proposed plan would require the tobacco companies to pay compensation for alleged past wrongful practices from the 1950s through the 1980s. Those practices resulted in harm to Canadians and significant costs to Canada’s health care system. Through the proposed plan, the money recovered would go towards health care systems in the Yukon and elsewhere in Canada.

“The Government of Yukon supports the proposed plan and is in agreement with the court-appointed mediator, former Ontario Chief Justice Winkler, that the plan is a fair and reasonable resolution for the tobacco litigation. The filing of this plan is not a settlement, but it is a key step in efforts to move the litigation towards a conclusion.

“This litigation has been a complex legal process that has been ongoing since 1997. The mediation has been ongoing for the past five years when tobacco companies sought protection under the Companies’ Creditors Arrangement Act and expressed their desire for a resolution to the litigation.

“Under the proposed plan, over time, the tobacco companies would be required to pay a total of $32.5 billion. This compensation would be used to:

• financially support our health care systems for improved treatment and care;
• provide meaningful compensation to individual victims of smoking;
• expand research into cancer and smoking-related illnesses and other programs; and
• provide accountability by the cigarette manufacturers for past wrongful practices.

“In the Yukon under the proposed plan, we would receive a total of approximately $100 million with most of it paid in the first five years. These funds would be used to provide meaningful benefits for our hospitals and health care services and continue the work being done to reduce the number of Canadians who smoke.

“The proposed plan addresses many needs. It provides financial compensation to health systems that have been paying the health care costs of treating smoking-related diseases and continue to do so, as well as individual smokers including those who joined together in class action lawsuits.

“If approved, this would be the largest resolution of its kind in Canadian history and will provide significant compensation to both health systems and individual litigants."