Canada ups cigarette tax, vows to cut smoking (fwd)

[Robert Weissman <rob@essential.org>]

FOCUS-Canada ups cigarette tax, vows to cut smoking
by David Ljunggren
Source: Reuters, Friday, 11/5/99
Friday November 5, 4:29 pm Eastern Time

OTTAWA, Nov 5 (Reuters) - Canada on Friday said it was raising tobacco
taxes in five eastern provinces and vowed to intensify its efforts to cut
smoking, particularly among the young.

The finance department said in a statement that it would increase
cigarette taxes in Ontario, Quebec, New Brunswick, Nova Scotia and Prince
Edward Island by 60 cents a carton from midnight on Friday.

It also said that the current temporary 40 percent surtax on the profits
of tobacco manufacturers -- which raises C$70 million annually -- would be
made permanent next year.

Canada slashed federal cigarette taxes in 1994 in a bid to combat
widespread smuggling from the United States but health groups said this
had done little to help the battle against tobacco, which kills around
45,000 Canadians a year.

``Tax increases are one part of our overall strategy to reduce smoking
rates, particularly among young Canadians,'' Health Minister Allan Rock
said in the statement.

``We must also intensify our efforts to reduce this leading cause of
preventable death through means such as tough anti-tobacco advertising,
upcoming labeling and information reporting regulations, and other
measures,'' he said.

Federal taxes per 200 tobacco sticks -- a standard carton -- will rise by
C$1.08 in Quebec and Ontario, C$0.80 in Prince Edward Island and C$0.40 in
New Brunswick.

The hikes in federal taxes will bring in an additional C$70 million a
year.

The finance ministry said Quebec, Ontario and New Brunswick would also be
raising taxes on tobacco but gave no details.

``The measures introduced today reaffirm the government's determination to
reduce tobacco consumption in Canada,'' said Finance Minister Paul Martin.

Health groups say the per capita smoking reduction in the five eastern
provinces -- which supported the 1994 tax cuts -- has fallen by 8 percent
in the last eight years.

In Canada's five central and western provinces, which did not go along
with the tax cuts, the rate fell by 24 percent in the same period.

The 1994 federal-provincial taxes were cut by C$14 to C$21 per carton in
the five provinces from around C$30. In the other five, the federal
government cut its share of taxes by C$5.

Since then, Ottawa and the eastern provinces have restored a small portion
of the cuts in three stages.

The main tobacco companies operating in Canada are Imperial Tobacco Ltd.
(Toronto:IMS.TO - news)(quote from Yahoo! UK & Ireland: BATS.L), Rothmans,
Benson & Hedges Inc. (Toronto:ROC.TO - news)(NYSE:MO - news), and RJR
MacDonald (NYSE:RJR - news).

($1=$1.47 Canadian)