Tobacco giants would pay out $32.5B to provinces, smokers in ‘historic’ proposed deal
Global News
The companies filed a proposed plan of arrangement in an Ontario court Thursday after more than five years of negotiations with their creditors.
Three tobacco giants are proposing to pay close to $25 billion to provinces and territories and more than $4 billion to tens of thousands of Quebec smokers and their loved ones as part of a corporate restructuring process triggered by a long-running legal battle.
The companies — JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. — filed a proposed plan of arrangement in an Ontario court Thursday after more than five years of negotiations with their creditors.
The companies sought creditor protection in Ontario in early 2019 after they lost an appeal in a landmark court battle in Quebec.
The Ontario court put all legal proceedings against the companies on hold as they tried to work out a deal with their creditors, which include the plaintiffs in two Quebec class-action lawsuits as well as provincial governments seeking to recover smoking-related health-care costs.
Under the proposed plan filed Thursday, provinces and territories would receive payments over time, with roughly $6 billion to be paid out when the deal is implemented.
The Quebec plaintiffs would file claims for compensation of up to $100,000 each.
The proposed plan also includes more than $2.5 billion for smokers in other provinces and territories who were diagnosed with lung cancer, throat cancer or chronic obstructive pulmonary disease between March 2015 and March 2019.
Bruce W. Johnston, one of the lawyers for the Quebec plaintiffs, said the proposal is “historic and unprecedented” because it allows for the compensation of smokers as well as governments.
