[Intl-tobacco] Canada: Health groups urge lawsuit on tobacco taxes

[Robert Weissman]

http://www.theglobeandmail.com/servlet/ArticleNews/PEstory/TGAM/20030116/US=
MOKN/national/national/nationalTheNationHeadline_temp/15/15/27/

Globe and Mail
Health groups urge lawsuit on tobacco taxes

By ANDR=E9 PICARD
PUBLIC HEALTH REPORTER
Thursday, January 16, 2003 =96 Page A9

In a sharply worded letter, a coalition of health groups is accusing the
federal Justice Minister of
backing down on a promise to sue Canadian tobacco companies to recoup
billions of dollars in taxes
lost due to smuggling.

The groups, which include the Canadian Cancer Society, the Heart and
Stroke Foundation, the Canadian Nurses Association and a
number of antismoking associations said they are "growing impatient"
with the delay, and demand that legal action be launched.

"This activity [smuggling] may have been the largest and most
destructive corporate misconduct in the history of Canadian business or
public health. That this industry would be allowed to escape
responsibility for its actions should be unthinkable for any Minister of
Justice or Attorney-General," reads the letter addressed to
Attorney-General Martin Cauchon, a copy of which was obtained by The
Globe and Mail.

"There has been no decision made on whether there will be legal action
in Canada," Ir=E8ne Arsenault, a Justice Department spokeswoman,
said yesterday.

In 1999, the federal government sued tobacco giant RJR-Macdonald Corp.
(now JTI-Macdonald Corp.) and affiliated companies,
contending that they tried to avoid taxes by smuggling cigarettes
through an Indian reserve along the Canada-U.S. border.

But in November, the lawsuit was dismissed by the United States Supreme
Court, which upheld lower court rulings that foreign
governments cannot use U.S. courts to recoup tax revenues.

After the decision, Mr. Cauchon said the legal action likely would be
relaunched in Canada, in short order.

Antismoking groups applauded that announcement but now say there are
indications that Ottawa is backing down, prompting their
unprecedented public scolding of the minister.

They argue that the legal background work has been done and there is no
excuse for delay. Further, they said the legal action should be
extended to other tobacco companies.

"Now the tobacco manufacturers stand poised to get away with it all.
Without perseverance and aggressive action by the Minister of
Justice and Attorney-General, they will," the letter reads.

The groups argue that the case is strong, and it failed in the United
States on a technicality, not on its merits.

According to documents filed in U.S. courts, Ottawa alleged that the
company and related firms began extensive smuggling operations in
the early 1990s that involved shipping their products to the U.S., then
smuggling them back into Canada.