P.E.I. government welcomes news of proposed payout by tobacco giants

The Prince Edward Island government is throwing its support behind a proposal to have giant tobacco companies pay nearly $25 billion in reparations to Canada's provinces and territories. 

The money would partially cover what their governments have paid out over the years to treat health issues related to smoking.  

P.E.I. was one of the provinces that sued to recover the costs.

JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. spent more than five years in negotiations before a proposed plan of arrangement was filed in an Ontario court Thursday.

"This matter pertains to alleged past wrongful practices by the tobacco companies from the 1950s through the 1980s," a spokesperson for the P.E.I. Department of Justice and Public Safety said in an email to CBC News on Monday.

"Those practices resulted in extraordinary costs to our health care system and we set out to recover those costs. The province of P.E.I. strongly endorses the plan, its benefits for provincial residents as well as the provincial health-care system and will support it through the court approval process."

The big cigarette companies sought creditor protection in Ontario more than five years ago after losing an appeal in a major Quebec court battle.

The proposed plan of arrangement filed Thursday also addressed that class-action suit. If approved, it would see more than $4 billion eventually paid out to tens of thousands of Quebec smokers and their loved ones for tobacco-related health issues. 

They would be eligible for up to $100,000 each, and "except in certain cases, class members will not need to obtain proof of diagnosis to submit a claim," according to a site describing the proposed settlement.

As well, more than $2.5 billion will go to smokers in other provinces and territories who can prove they were diagnosed with chronic obstructive pulmonary disease, throat cancer or lung cancer between March 2015 and March 2019. The payments would be up to $60,000 each.

The P.E.I. spokesperson's statement mentioned that part of the deal too.

"It provides financial compensation to individual smokers, including those who joined together in class-action lawsuits, and it provides financial compensation to health systems that have been paying the health costs of treating smoking related diseases and continue to do so."

The proposed plan would see provinces and territories paid over time, with roughly $6 billion initially provided.

When the P.E.I. government filed its initial claim against the companies in 2012, a lawyer said it would cover health-care costs attributable to smoking over the time span when tobacco companies were aware of the dangers of using their products, starting in 1953.