Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 16 - Evidence

The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill S-20, to enable and assist the Canadian tobacco industry in attaining its objective of preventing the use of tobacco products by young persons in Canada, met this day at 9:03 a.m. to give consideration to the bill.

Senator Mira Spivak (Chairman) in the Chair.

[English]

The Chairman: We are here to resume our discussions on Bill S-20.

Our panel this morning is from the Non-Smokers' Rights Association and the Canadian Cancer Society.

Mr. Ken Kyle, Director of public issues, Canadian Cancer Society: Ms Fry and I are here to sum up and give our overview and comments on the bill. We hope this will be helpful to the Senate committee.

I would like to put the issue in context. As was mentioned, I am with the Canadian Cancer Society. Over the last 15 years, I have spent a good deal of my time dealing with a national priority of the Canadian Cancer Society, which is the control of this epidemic.

The Canadian Cancer Society is facing unparalleled challenges. While substantial progress has been made in the fight against cancer, overall cancer incidence and mortality remain high. In fact, one out of every three people living in Canada today will be diagnosed with cancer sometime in their lives.

One out of every two people who develop cancer will probably die from the disease. An aging population will worsen the cancer burden over the coming years, creating huge impacts on our health care system, unless there are major interventions.

For example, lung cancer mortality rates among women continue to increase. These rates are now almost five times those in 1971. This is due to women taking up smoking in record numbers a few decades ago. There is new evidence linking tobacco smoke to a doubling of the risk of breast cancer for premenopausal women.

Of particular concern is the increasing rate of smoking among teens, which will result in increased cancer incidence within this generation when they reach middle age and beyond. Since tobacco use is the cause of 30 per cent of all cancer deaths, it does not take a Nobel scientist to see that Bill S-20 will be an important solution.

Lorraine Fry, General Manager, Non-Smokers' Rights Association: The Non-Smokers' Rights Association believes that one of the key inroads into tobacco control is public education on the true extent and magnitude of the risks of tobacco use.

Most people now know that tobacco use can cause disease and death, but most still do not know that it kills one out of every two of its long-term users, and half of them, on average, 23 years prematurely. While most know that cigarettes cause lung cancer, they do not know that they cause 30 per cent of all cancer deaths. Most do not know that cigarettes are responsible for 30 per cent of all heart and stroke deaths and most chronic and deadly lung diseases such as emphysema. They certainly do not know that tobacco use is the number one cause of preventable disease in Canada and is reaching epidemic proportions.

An epidemic calls for bold, innovative, sustainable, well-funded programs. Since virtually all new starters come from the child and adolescent market, preventing youth from starting to smoke has to be a key component of the solution to the epidemic.

We believe that Bill S-20 will have a major impact in reducing the number of underage smokers if passed into law.

Mr. Kyle: We heard on Tuesday a little about the comprehensive approach or the multi-pronged attack. From many years of experience in tobacco control, health organizations in Canada have learned that many different complementary approaches to reduce tobacco use must be taken simultaneously, including research, policy, and program components. They must be comprehensive and coordinated to work together at the local, provincial, national, and international levels.

The federal and provincial governments in Canada, as well as health groups, have a number of recommendations for tobacco control, built on a population health approach and based on extensive research, that could positively impact all Canadians. These include preventing tobacco use among young people; persuading and helping smokers to stop using tobacco products; protecting Canadians by eliminating the exposure to second-hand smoke; and educating Canadians about the impact of tobacco use on their health so that social attitudes are consistent with the hazardous, addictive nature of these products.

While Parliament has passed some good legislation to provide a useful framework, there are precious few financial resources to establish the kinds of programs needed to implement the comprehensive approach. In fact, out of less than $20 million a year made available to Health Canada for tobacco control, half goes into enforcement, and a large part of the remainder goes to administrative overhead and legal fees. There are few dollars for programming.

We are here to show how important it is that Parliament pass Bill S-20 to fill this void.

Ms Fry: I want to talk a little about the whole issue of a levy versus taxation. The foundation established by the bill will be funded by the tobacco industry itself, as you all know, through a levy on the sale of all tobacco products.

This levy will provide a predictable level of funding that will enable the foundation to pursue its activities. The amount from the levy will be predictable, depending on public demand for tobacco products, and it will be sustainable over a long period.

Taxes are, of course, a financial imposition on Canadians for the purpose of raising money so that government can carry out all its obligations and commitments.

Those planning tobacco control programs cannot continue to wait with bated breath each year for tobacco tax increases, and also to see, perchance, if there might be any corresponding increase in funding to Health Canada for tobacco control.

Stable funding is critically important. You heard that over and over again the other night from the American experts.

Because of the addictive nature of tobacco products, smoking will be a public health problem for a long time. The issue must be addressed over many years in a systemic way. Programs must be researched and initiated, implemented and evaluated. The ones that have not worked will be discarded over time, building on the knowledge of what has worked to create new, effective programs.

There are many examples of promising programs running into serious difficulty when funding has been abruptly terminated. Mr. Kyle will describe several of them.

Mr. Kyle: I will mention RYATT. This is one example of an excellent initiative that is sitting on the back burner going nowhere because of lack of funding for tobacco control. Last summer the Canadian Cancer Society was asked to participate in a federal-provincial steering committee to address the issue of youth access to tobacco. Following months of work and a three-day workshop in Ottawa, a comprehensive national strategy to deal with the problem of youth access to tobacco products was developed. The strategy, called RYATT -- Reducing Youth Access to Tobacco -- went far beyond initiatives to improve retailer compliance with sales to minors laws.

We know that younger smokers who are experimenting with tobacco rarely purchase their cigarettes. They tend to get them from friends. Likewise, in places where retailer compliance is high, young smokers rely more on older teens, young adults, sometimes even strangers or their parents, to supply the cigarettes. We call this "third-party supply." It is an important, and so far ignored, part of the equation.

The broad strategy would also provide communities with resources to deal with the problems particular to their environment. There would be a community tool kit of information, camera-ready artwork, educational resources, et cetera. Unfortunately, the six months of work and collaboration that went into developing this strategy has gone absolutely nowhere because of a lack of funding.

The saga of the National Clearing House on Tobacco and Health is another example. In 1988, a non-government organization called the Canadian Council for Tobacco Control was asked to manage a national clearing house on tobacco and health to collect, prepare, synthesize, and distribute information related to tobacco use for health intermediaries. The tools to be used included a 1-800 reference line, a small Web site, and a 25,000-book library collection available to Canadians outside Ottawa. Health Canada has not only chronically underfunded this critically important function, but the financial commitments were only given on a year-to-year basis. This has been a serious constraint on developing such a clearing house.

Health groups need such a clearing house not only for information, but to know what the information means and how it can be applied successfully. This will never occur without proper funding.

Ms Fry: Another example of funding that was given and then severely constrained is the surtax that was announced when the tobacco taxes were rolled back in 1994. The Prime Minister announced a surtax on tobacco manufacturer profits that would raise $60 million a year for three years to fund the largest anti-smoking program the country had ever seen. That approach was called the `tobacco demand reduction strategy', and became known in tobacco control circles as TDRS.

That promise was cut short in the federal budget of February 27, 1995. I believe it was not even a year later. The Minister of Finance cut $64 million out of part of the program review process. Suddenly one-third was lopped, off less than a year later. It was not long before he took another big whack at it. A year later, in the March 6, 1996 budget, the Minister of Finance took away a third of the money remaining.

Only a small portion of the revenues from the surtax, which has been made permanent now, has been and is being used to reduce smoking. The surtax is now generating $80 million to $90 million per year. Health Canada gets less than $20 million of this money.

Mr. Kyle: Ms Fry mentioned the Minister of Finance. I would like to talk frankly about some finance concerns. We are not unaware that this bill poses a dilemma for the government. If this bill passes, there is a likelihood that a number of groups will approach their favourite senators to lobby for levies to be established for industry purposes in other policy areas, which will cause the government some hiccups.

There is a solution to this problem. If there were the political will to do something about youth smoking, and with a little thought and work, there could be mechanisms worked out whereby Parliament could agree in advance to specific qualifying criteria for approval of a levy. For example, levies could be instituted to provide funding to curtail epidemics that cause over, say, 20,000 deaths a year.

Let's be frank. There is no other epidemic that comes close to the 45,000 deaths per year in Canada from tobacco use. We all understand that this particular levy is a tailor-made solution to the present tobacco epidemic.

This epidemic is not in the same league as other social programs that might cry for a levy. It is radically different. Anyone who takes the time to look at this will see it as a one-off.

Parliament thought it would be a good thing to put a levy on blank tapes to benefit recording artists. Probably no one begrudges a few dollars to the pockets of Shania Twain or Celine Dion. However, when we are talking about 45,000 deaths per year, we are addressing something of a totally different order of magnitude and importance.

If the health community thinks this bill is necessary, which it does, and if the medical profession is urging this course of action, which it is, and if the tobacco companies are onside, which they largely are, and if this is a solution to the medicare financing crisis, which it is, and if health is at the top of Canadians' priority list for government action, which it certainly is, and if smokers do not mind the cost of cigarettes going up a few cents to stop youth smoking, which is certainly the case, and if the Minister of Health supports the principles in the bill, which he does, and if the Prime Minister has promised the biggest anti-smoking program in history, which he did in 1994, the question that requires an answer when the bill arrives in the House of Commons is, what will be the position of the Government of Canada?

Ms Fry: I want to talk about the difference between an outside agency and the Ministry of Health, and why we are supporting the outside agency approach.

The arm's-length characteristic of the foundation is really important and is not unprecedented. Parliament recently established the Canadian Institutes of Health Research as an outside foundation.

The key is that expert staff will be free to focus solely on solutions to this complex problem of tobacco use, since programming is one step away from the political level. An organization outside of government is able to try new, innovative techniques. It could constantly evaluate which techniques are successful and which are not, and make the necessary adjustments. The blame for any program failures will not be laid at the feet of politicians.

A non-political approach is important, as no one completely understands how adolescents think and many different programs will have to be tried. Tobacco use is a complex social phenomenon that involves physiological, psychological, cultural, and sociological factors all woven together. The nature of health research is that many experiments do fail. The minister should not have to get up in the House of Commons to defend each initiative.

If researchers will be constantly second-guessed by opposition critics, they will be looking over their shoulders for the politically correct answer instead of the scientifically correct answer.

All the comprehensive tobacco control programs in the United States, and certainly the ones that you heard about the other night, have suffered from political interference. In California, the legislature diverted funds. The American Cancer Society, together with other groups, sued to recover them. In Massachusetts, the governor personally censored the television ads.

Mr. Kyle: I would like to talk about special populations. This bill will provide for the necessary funding to meet the needs of special groups. For example, smoking rates are higher among francophones than anglophones. Funding allows special programs to help aboriginal peoples. They have the highest smoking rates in Canada, as Senator Adams mentioned the other night, and that is of real concern to the Canadian Cancer Society as a national organization.

The 1997 First Nations and Inuit regional health surveys report smoking rates of 62 per cent for the First Nations and 72 per cent for the Inuit. This is more than twice the rate of the Canadian population as a whole.

The average age for smoking uptake is also younger by at least 10 years for these populations.

Ms Fry: One important area in Bill S-20 is the amount of money being proposed. We have had comments from many people who wonder if we really need $360 million to combat tobacco use. It is a huge amount of money, but it is not as if we pulled this out of a hat. Experts in North America and at the Centers for Disease Control capably make these cost estimates.

We were members of a national campaign coalition for action on tobacco. The coalition has spent countless hours studying not only the information that comes out of the Centers for Disease Control, but also gleaning from our own experience, how much money is needed for each of the particular programs that would be required for a comprehensive system.

We do not think that $360 million, which Bill S-20 would provide in annual funding for necessary public education programs, is too much money. Canada is a big country and smoking rates among some groups are unbelievably high, as Mr. Kyle has just noted. Also, good programs do not come cheaply.

The U.S. Centers for Disease Control proposes that a jurisdiction the size of Canada should be spending between $9 and $24 per capita on tobacco control. That $360 million translates into only $12 per capita. In fact Senator Kenny may have been too modest in what he is asking for if the amount to be generated is still in the bottom quartile of the CDC recommended range. It might have been wiser to ask for $18 per capita.

The federal government collects $2.1 billion per year from tobacco taxes, including about $80 million in taxes from sales to underage youth. Health Canada's current tobacco control budget, as you have heard, is just under $20 million per year for the leading preventable cause of disease, death and disability. That is about 65 cents per capita, slightly more than the cost of a mere postage stamp.

Here we are wanting $360 million. The important thing to remember about spending large amounts of money on a well-run, sustainable, comprehensive tobacco control program is that -- guess what? -- it works, and ends up saving the government money.

The California program has spent $1 billion over 10 years and has witnessed a 50 per cent decline in consumption from 1989 to 1999. That is phenomenal. Thus, it works. For every $1 spent on tobacco control in California, the state has saved $10 in direct and indirect costs.

Massachusetts spent $15 per capita. Bill S-20 is only asking for $12 per capita for a comprehensive tobacco control program. Massachusetts witnessed a 35 per cent reduction in overall sales between 1993 and 1999. That is in only five years. They witnessed a 30 per cent decline in consumption in middle schools and a 20 per cent decline in high schools. Smoking among pregnant women has gone from 26 per cent to 13 per cent, and prevalence rates have gone from 22 per cent to 18 per cent, with daily rates of 14 per cent. In five years, that state has 200,000 fewer smokers and an estimated 100,000 premature deaths have been avoided.

The federal government collects some $90 million per year from the tobacco manufacturers' surtax. On February 8, 1994, when announcing the tobacco tax rollbacks, the Prime Minister said that revenues from the surtax would fund the largest anti-smoking campaign this country has ever seen. I described earlier what happened to that money.

Bill S-20 could still fulfil that commitment.

Bill S-13, sponsored by Senator Colin Kenny, that modest fellow to whom we were referring earlier, and MP Caroline Bennett, had widespread public and parliamentary support. In October 1998, a national Environics survey found that Canadians overwhelmingly endorsed Bill S-13 by a margin of 76 per cent to 17 per cent. When the bill was invalidated on a point of order on December 6, 1998, the government said that it was still committed to the principles in it. The health community has been waiting since then for the government to put forward a replacement initiative. Two budgets have been passed with no action taken to increase resources for tobacco control.

Mr. Kyle: In conclusion, I would like to talk about accountability. There are a number of provisions for a systemic review of the functioning of the bill: an annual report must be prepared and tabled in Parliament; directors will be appointed by the Minister of Health, who in turn is accountable to Parliament; an advisory panel will advise the minister on who to appoint; a youth advisory committee will advise the board; board meetings will be public; program contracts will be made public; there will be a requirement for an evaluation of funded programs; and once 5 per cent or less of young persons use tobacco, the levy will be reduced.

Ms Fry: In conclusion, I would like to talk a little about the tobacco industry. We have seen recently a new phase in the strategy of some of the tobacco companies in Canada on youth smoking. Their stated position in front of this committee is that they do not want underage youth to smoke, and their public support of Bill S-20 is indeed noteworthy. Forgive us for being skeptical, but this is the same industry that spoke in a previous document, which has since become public, of "making some concessions to lose the battle in order to win the war, or in other words, to throw the government a bone." That was Imperial Tobacco in 1973. We hope that this is a true change of heart and not another "bone."

To show good faith, there are some immediate actions that the tobacco companies could take to combat underage youth smoking: they could suspend their sponsorship advertising, which is clearly brand advertising by a different name; they could promise to donate profits from all sales to minors, and actively warn young people of the dangers of addiction; and they could promise to make a donation each time an underage youth became addicted to cigarettes -- a donation large enough to ensure that they do not make a long-term profit from the new addict. We will be watching the industry closely and with great interest as their new strategy unfolds.

In the meantime, honourable senators, if you vote in the affirmative for Bill S-20, and I am confident you will, your decision will be the first step on the road to a sustainable, innovative, comprehensive tobacco control program that could literally save hundreds of thousands of lives by preventing youth from smoking.

Mr. Kyle: At an earlier session of this committee, the Canadian Cancer Society was asked for comments on the presentation made by the tobacco industry. We would like to circulate a document in response to your request.

Second, we have a document entitled, "Compilation of Selected Evidence Regarding the Need for Comprehensive Tobacco Control Programs." We have one of these for each member of the committee.

The Chairman: Thank you for your presentation. I want to ask you something that I should know, but do not. What is the provinces' share in the tobacco tax? How does that work?

Mr. Kyle: Both the federal government and provincial governments have excise taxes, as well as other taxes, on tobacco. I could get the exact figures and submit them to you, since we have some documentation on that. It is roughly one-half each.

The Chairman: That would be very helpful, because in my mind, whenever the Council of Health Ministers meets, the provinces just want more money. It seems to me quite illogical that they would not look at prevention, and that they would not look at the single biggest drain on the health dollar, which comes from tobacco.

Senator Banks: I cannot help but note, Ms Fry, that when you were talking about the possibility of the failure of the program that might result from the promulgation of this proposed legislation, you said that no politician would be blamed for it. That is not quite right. One politician would be blamed for it and he is sitting right there.

Ms Fry: I was not actually referring to the whole program.

Senator Banks: I was making a joke that fell flat as a pancake.

Senator Kenny: I laughed, weakly.

Senator Banks: My question is in regard to third-party supply. Is there a penalty anywhere for sales of tobacco to minors, for being pushers, in effect? If I buy a pack of cigarettes and give it to a 12-year-old kid, have I broken a law?

Mr. Kyle: It is contrary to federal law. Most of the provinces have laws preventing retailers from selling cigarettes to minors. The sanctions vary, depending on the province.

We would like to see tobacco retailers lose their licences to sell tobacco after being caught three times. If a customer asked for a package of duMaurier, the retailer would then have to direct the customer elsewhere.

Senator Banks: A retailer would not be penalized if he sold me a package of cigarettes. I can pass for 18.

Mr. Kyle: Yes.

Senator Banks: My question is, having legally bought a package of cigarettes, if I go down the street out of sight of the retailer and give that package of cigarettes to a 12-year-old kid, have I broken the law?

Mr. Kyle: There is a provision in the Tobacco Act. Maybe I could get my colleague, Mr. Cunningham, who is a lawyer who knows the exact provision, to explain it.

Mr. Robert Cunningham, Senior Policy Analyst, Canadian Cancer Society: It is an offence under various provincial laws for an individual to supply tobacco products to anybody underage. It is an offence under the federal Tobacco Act to provide tobacco products to someone underage in a public place.

Senator Banks: Thank you.

Senator Christensen: On third-party suppliers, do you have any thoughts or ideas on how that niche can be reached through programs?

Mr. Kyle: Yes. A lot of thought was given to that issue. I do not have the details at my fingertips, and I was not part of it, but there were some federal-provincial meetings to develop informational material not only for retailers, but also for parents, families, kids, and for a whole educational program for the schools and so forth.

In other words, the RYATT program that I mentioned earlier was not just aimed at retailers. It was a comprehensive approach.

I have some friends at Health Canada who asked to be assigned to another division because there was no money to implement the program. They had all kinds of great ideas that could have been tried.

Senator Christensen: Therefore the information is there. It is just a question of funding.

Mr. Kyle: There is no money to put the program in place.

Senator Banks: To anyone's knowledge, has anyone ever been prosecuted as a third-party supplier -- not seller -- of tobacco products to minors?

Mr. Cunningham: That is the case. There has been recent news coverage of that in Ontario, for example. It has happened.

Senator Taylor: One of the questions I wanted to ask was answered in your handout.

You also covered the driver's licence suspension, but you only partly answered that. You said that it would be a provincial issue and the federal government could not make laws in that regard, but you went on to say that there is room to expand this bill to bring in provincial representations. That may be one of the ways of handling the driver's licence, if we get the provinces co-operating.

That leads to another question that intrigues me. The programs in the U.S. are run by the states. Are we pinning the tail on the right donkey here when we go after the federal area?

Ms Fry: Those experts who testified were adamant that the best possible strategy is a national one, well-coordinated and integrated, with grants to the provinces. Some things are more properly positioned in the provincial domain. They know their particular geographical area best. However, the experts are very clear that there must be a national strategy that is integrated and coordinated with the provinces, and with grants to the provinces.

Senator Taylor: The question of tax write-offs has bothered me for a number of years. Here we have an industry that purposefully sets out to subvert our youth, to try to make addicts out of them. It can write off the costs of the advertising that it undertakes to do that. Even the worst mafia drug barons have not been lucky enough to get a write-off on the costs of their activities, yet all parties have supported the idea that all the advertising dollars the tobacco industry spends to convince youth or anyone else to smoke should earn a deduction from its taxable income.

Yet if a farmer decides to spend money opening a dry-cleaning plant in a small town, that will not be allowed as a write-off because it is unfair. However, the tobacco industry is allowed to write off the cost of ads that convince the farmer's children to smoke.

Have you made any presentations on that issue? I know this is a little outside the bill, but it annoys me to see it.

Mr. Cunningham: Legally, you are correct. Tobacco manufacturers are able to deduct their marketing expenses and reduce the amount of taxes payable to government.

A number of bills have been introduced in the U.S. Congress that would eliminate the tax deductibility of tobacco advertising. Those have not been adopted. There is some academic literature on the subject.

Health groups in Canada have been on record in the past as supporting a similar proposal, but one is not yet in place.

Senator Taylor: We can do that next year, after we get this one in place.

We hear much about fetal alcohol syndrome and how it affects a child's development in school. Have your organizations done any research on what might be called "fetal nicotine syndrome"? Is there such a thing?

Mr. Kyle: Yes. We are very concerned about tobacco use by pregnant women. Certainly cigarette use has been implicated in underweight babies, which causes enormous problems during the lives of those individuals. It is a huge risk factor for pregnant women because it really does affect their babies. If you would like some of the studies or some of the research on that, I can send it to you.

Senator Taylor: I would appreciate that. Thank you.

Senator Adams: Mr. Kyle, I appreciate those statistics indicating that the Inuit or aboriginal people smoke twice as much as the rest of Canada. Seventy-two per cent is a very high rate. Several months ago, the Minister of Health was establishing a new warning system that must be printed on cigarette packages. They have been present for the last few years, discussing the effects of lung cancer and other health risks.

Every time we asked the tobacco companies about the connection, they answered that they are not scientists and cannot tell us if tobacco causes cancer. I know many of my friends up north are dying of lung cancer. I have one friend who only has one lung left, and he is still smoking. It is very difficult. We had a witness from the States the other day whose wife is dying of lung cancer. Even though she cannot move any more, she is still smoking.

We will put a better warning on packages. Does the public know about the risks or they do not really care? Does the warning label on a package of cigarettes really do any good at all?

Mr. Kyle: We have conducted some research on that. I will ask our policy analyst to tell you about the research on the effectiveness of the new warning messages.

Mr. Cunningham: In addition to the research conducted by Health Canada, the Canadian Cancer Society focus groups among teens and adults and national qualitative studies clearly demonstrated that pictures are more effective than text alone. It also showed that the larger the warning, the more effective it was. These new labelling provisions have tremendous promise, including for Canadians who speak neither English nor French, because the picture says a thousand words in any language.

Senator Wilson: You mentioned the necessity for evaluation of programs, and also the fact of possible political interference. Who will be the watchdog on this? I know the public at large is and so on, but is there any particular focus group that will keep a watch on whether any of this happens, provided the bill passes?

Ms Fry: Mr. Kyle spoke about the role of the accountability measures. There is a board of directors. There is an annual report.

Senator Wilson: Who monitors that? I have had some experience with the setting-up of foundations. What is the guarantee that that will happen?

Ms Fry: The annual report must be prepared and tabled in Parliament. That is part of the bill.

Senator Wilson: You are saying that parliamentarians are supposed to read it and "watchdog" it?

Ms Fry: The Minister of Health appoints the directors and is accountable to Parliament. An advisory panel advises the minister on who to appoint. Do you mean that if serious problems were to arise, who has the accountability?

Senator Wilson: That is correct, and on the issue of political interference.

Ms Fry: I would say the accountability probably lies with the senators who introduced the bill. The bill was initiated here. I would also say that we are the watchdogs in the national tobacco control community. If we see things going seriously awry, we will act. Hundreds and hundreds of annual reports are prepared and tabled in Parliament. They can go by with a whiff and no one pays any attention.

Senator Wilson: Exactly.

Ms Fry: However, if we felt that things were going awry, we would come back and draw it to the Senate's attention. We would also draw it to the attention of parliamentarians. We would draw their attention to the annual report and ask for a meeting with respect to it.

Senator Wilson: That is fine. That is what I wanted to know. Many annual reports are issued as if that does it, and it does not.

Ms Fry: I would say that if that were to occur, we would be key players in that situation.

Senator Taylor: Are your organizations receiving funds from the bill for monitoring? That would certainly affect your monitoring ability.

Mr. Kyle: Perhaps I could answer that. Traditionally, the Canadian Cancer Society has not received funding from government. Our funding comes from the annual door-to-door campaign, the sale of daffodils, and so forth. From time to time, Health Canada has requested that we evaluate a school program, for example. However, we would definitely follow this.

According to the testimony, the American Cancer Society in California does not receive money. From speaking to some of the witnesses from that state program, it is something that we would need to watch carefully. It would be a concern to me.

We certainly see ourselves as monitoring this. Tobacco control is one of the five national priorities of the Canadian Cancer Society. The national board looks at smoking rates each year and at how we are doing. This is a continuous, focused effort. You raise a good point. It is something we would watch.

Ms Fry: The Non-Smokers' Rights Association does currently receive funding from Health Canada. It certainly has not stopped us from being very clear about what we feel needs to be done in tobacco control. The key is that we receive funding for specific projects that are not part of our advocacy and lobbying campaign on tobacco control.

Our organization does a lot of research. We do many things besides direct lobbying and advocacy and we receive funding from Health Canada for those things. We never charge any of our lobbying and advocacy activities to that grant. I would expect that if our funding were to come from the foundation rather than Health Canada, the same would apply.

Senator Taylor: Thank you. I thought that might be an area for amendment somewhere down the road, but we will cross that bridge when we come to it.

There will be other people willing to blow the whistle on you if you receive funds and are not mean enough in your analyses.

Senator Banks: I guess we are in an endless chain of supplementaries. Another real danger, in addition to the one that Senator Wilson has seen, lies in what you said, Ms Fry. You said that even if in the new regime your funding comes from this levy, you would remain a watchdog. All governments at all levels have a propensity for weaselling out of existing funding if they can find someone else willing to step into the gap.

Senator Taylor: The word is "off-loading."

Senator Banks: Whatever. Do you think that that would happen? Are you concerned that when going door to door or selling daffodils, that people will refuse to contribute or buy because they will think that as you already have this big levy, you do not need any more?

I agree that $360 million, if that is the number, is enough to conduct an efficient national campaign. I am not worried about that, because there are economies of scale from a national campaign.

Senator Spivak: California is as large as we are.

Senator Banks: Yes, they are in terms of numbers, but they do not have the economies of scale in terms of media reach.

I am worried about the slimming of your other sources of revenue in light of this levy, either from government or from folks.

Mr. Kyle: According to the research done by the Canadian Cancer Society, most people buy daffodils and donate at the door to help families touched by cancer. We have an extensive regime of services for patients where we provide free transportation to the lodge for chemotherapy, and that sort of thing. I do not think that money from a foundation going into tobacco control would obviate their concerns about finding a cure and helping families coping with cancer through emotional support services and these sorts of things.

I do not see it impacting our fundraising.

Ms Fry: I would say that this bill and the new foundation would enhance our chances of continued funding. We are grateful currently to Health Canada for funding the three national tobacco control organizations. Last night, I heard exactly where the slightly under $20 million goes and just how desperate the situation is in Health Canada. It is quite a miracle that each year they manage to find the money to fund the three organizations.

Senator Banks: Do you think that they will continue to fund them if this bill is passed and becomes law?

Ms Fry: We have an opportunity to access money from the foundation. When there is a pot of $360 million, as opposed to approximately $19 million, there is a far better chance of continued funding -- as is the case for other worthy health organizations across Canada. There will be a far bigger pot from which to receive funding. A portion of the bill envisages funding organizations across Canada that have the expertise to do the needed work on tobacco control. Our organization has 25 years of experience and knowledge.

Senator Banks: I understand that, but do you think that after this program is in place, everything goes "tickety-boo" and there is $360 million available, Health Canada will continue to fund the three organizations that you are talking about to the extent of about $20 million per year -- over and above the money from general tax revenues? Do you think it will continue to flow to the anti-tobacco efforts of the organizations involved?

Ms Fry: They spend only slightly over $1 million to fund tobacco control organizations. The other $18 million goes to a host of other things -- to the provinces for enforcement; to legal defence of the act; and to a whole host of program activities. I am saying that if in fact the foundation is created and part of its mandate is to accept applications for grants from organizations, it may very well be that Health Canada will cease to fund tobacco control organizations. However, the foundation would then take over that role. If there is a pot of $360 million as opposed to $19-odd million, there is a far better chance of continued funding.

Senator Banks: Do you anticipate the government will weasel out of the $1 million?

Ms Fry: I think that when the foundation is established, there will have to be some coordination of what Health Canada will continue to do and what the foundation will do. Since the foundation will be a funding body, it would make sense for it to fund tobacco control organizations.

Senator Taylor: The legal counsel's answer about tax deductions was very good. Is there any way of finding out what the tobacco industry claims each year in write-offs for advertising?

Mr. Cunningham: Our information is that their marketing expenses in 1997 were about $150 million to $200 million per year.

Senator Taylor: That is $200 million that they take off when calculating the profit.

Mr. Cunningham: That is correct.

Senator Taylor: They pay 50 per cent income tax, so that means the Canadian public not only pays these other costs, but they are giving a $100 million bonus for continued advertising.

Mr. Cunningham: Canadian taxpayers subsidize the marketing of tobacco products.

Senator Taylor: That would be by about $100 million. That information is worth knowing.

The Chairman: Of the models that were presented to us by the people from the United States, the one that struck me most forcibly was the Florida model. It struck me that this kind of model would really capture the imagination of the country in a way that perhaps some other things would not.

What do you think of the idea of having young people direct the activities and using organizations such as yours to carry out these plans?

Ms Fry: I think that each situation is very specific. The Florida programs were positioned in the civil service, but the governor at that time showed phenomenal leadership on tobacco control. The man who spoke to you about the Florida program, Mr. Chuck Wolf, was the governor's chief of staff before he changed positions to run that program.

There was a specific situation in Florida where there was such strong political leadership in support of the program, although I am not familiar with it in detail. I have some initial hesitations about a board of directors. They are far ahead of us in the U.S. in terms of overall recognition of the magnitude and nature of the risk. I would probably be more in favour of starting off with a youth advisory committee, as the bill entertains, with a board of adults and youth. I would not have any problems with two youth representatives rather than one. Then perhaps we could try something more innovative once the foundation was up and running.

That is off the top of my head. What they managed to accomplish in Florida is fabulous, but Florida is not Canada. Canada is behind in terms of general awareness and the Florida program might be more appropriate as a `stage 2', as the foundation continues to evolve.

Mr. Kyle: I agree with Ms Fry. If the foundation is given flexibility and there is no government interference, projects and groups run by youth could be funded and we could see what happens. That is why you need that distance from government. If the youth go off track and do something a little bizarre, you do not want the opposition parties going after the Minister of Health in the House of Commons, for example. I would be in favour of letting youth apply for funding and compete with other groups.

Senator Banks: Further to your question, Madam Chairman, it sounds to me that you have some issue or some worry with the representations of the Florida program that since this is a youth-oriented program, it ought to be under the authority of a group of youths, and that that authority or responsibility ought not to be mitigated or overseen. The reason is that the presentation indicated that, if I recall correctly, unless the foundation actually empowers those people in the program, they will abdicate from it. That was the impression that I got, and it sounds to me as though you are saying, "No, we need to keep this in someone else's hands."

My specific question is, does someone now have in mind what the make-up for the running of the foundation will be? Who would be involved? Do you have specific people in mind, and is it something other than a board, such as the Florida model?

Ms Fry: The way the bill currently stands, there is a youth advisory council to advise the board, with one youth on that board.

I am not opposed to the Florida model at all. I think it is fabulous. Mr. Wolf was very clear that they had expert staff to advise them on any of the projects that they came up with. It is not as if they are operating in a vacuum. They had expert staff to advise and assist them, and so on.

I am simply saying that conditions in the United States are very different from conditions in Canada. There has been a huge amount of litigation and settlements -- the McCain bill, the FDA regulations. Phenomenal things have been happening in the States that have served to change both the climate and the level of awareness of citizens around tobacco and children, not the least of which are the mass media programs. There was the "youth train" and the other things that Chuck Wolf described. They had mass media programs, TV ads, and a whole flight of things that happened even before that. There is a level of awareness among youth and adults on tobacco, the extent and magnitude of the risk, and so on. We are a little behind in Canada. We need to set the stage and have the foundation raise the general level of awareness initially. I do not see any reason why you could not then have much more powerful youth involvement and direction. Does that help?

Senator Taylor: Yes.

Ms Fry: We are different. As we keep saying, we are not them. Usually we like to think we are ahead of them. In this case, however, I do not think we are. We are behind them.

Senator Banks: This is aimed at youth. One thing we all know, if we have my hair colour, that is we do not understand them. They understand themselves better than we do. I am not a "tree hugger" or anything in that respect, but that is true. The Florida model suggests that. Would it not be possible to provide them with all of the support, expertise and guidance, as opposed to paternalistic control, so that they might rise to the occasion?

Ms Fry: That is worth considering. One of the dangers of an advisory council, as we have seen in the past, is that sometime people feel marginalized and that the decisions are being made somewhere else. That may be a better stage 2 than a stage 1.

The Chairman: Thank you for coming this morning and for your testimony. We will now hear Senator Nolin and Senator Colin Kenny give their wrap-up presentation.

This is your round before we leave this study.

[Translation]

Senator Nolin: You have, quite assiduously and courageously, listened to a series of witnesses who demonstrated to you that the curse of tobacco addiction among young people is certainly something that can be combatted.

I hope you have also been convinced that the miraculous solution for achieving this aim is a sizable injection of funds to finance positive programs. I listened earlier to the discussion about the involvement of young people in establishing these different kinds of programs that should be made available through the foundation and I am very pleased with the tenor of this discussion.

We were all agreeably surprised by the position of the three Canadian tobacco companies. We have taken note of their testimony and we will not hesitate to avail ourselves of the services they offered in the continuation of our crusade. I now turn the floor over to Senator Kenny.

[English]

Senator Kenny: Thank you for this opportunity to appear before you. I would like to thank the committee for going forward with such a thorough examination of this bill. I appreciate your time and your involvement a great deal.

Before I get into a review of some highlights, I wish to talk to you briefly about some of the witnesses you have heard and make a point that is worth making, because it came up in the context of the question of accountability. If the bill is successful -- and I believe it will be -- what role will various groups play in monitoring the bill?

You have heard witnesses who have been very critical of what is going on in government and who have also been receiving grants from that government. They have been very courageous. They have been risking their grants, frankly. My experience with the community is that it is full speed ahead. They do not pull their punches. They say what is on their minds and they take their chances.

You have had testimony from people who could well find that a government that wanted to be vengeful could interfere with their funding significantly. That is something about which we should be vigilant. We have had witnesses tell us their candid positions, knowing full well that some bureaucrat or some individual in government could yank the chain on their funding tomorrow. I believe it is our obligation to keep an eye open for that.

As to the question of monitoring performance after the bill is passed, if that happens, that is the role of senators. We have the opportunity to visit and revisit issues. That is the beauty of the Senate. We have seen Senate committees call back witnesses and make changes from time to time when they do not like the way an issue has gone. We have the advantage over the other place of calling witnesses back again and again if something does not go right or if we do not get the appropriate response. I can cite many examples of where we have done that and have been successful in getting changes when people have ignored the initial report. That is an appropriate role in the system for the Senate, and one that we should be prepared to exercise.

As for the bill, I think that senators are generally aware of the highlights and of how it is organized. I do not think that you would benefit from me going through a detailed description.

There is considerable interest in Chuck Wolf's testimony about the youth model and the situation in Florida.

I would add several details there for your consideration. It really was an initiative by Governor Lawton Chiles "Walkin' Lawton" -- who got elected by walking the entire state of Florida and running a very successful populist campaign.

Chuck Wolf was not on the panel by accident. He is a terrific communicator and had a terrific program.

It is worth noting though, that the day that Governor Chiles died, new Governor Jeb Bush ravaged the program. He took it apart and did away with it. That was part of the story that never came out. I would like to point out that two other programs that have had great success, in California and Massachusetts, do not follow that model. That does not mean that I disagree with the Florida model, but we have here a pretty significant step forward. When we are moving from 66 cents per capita to $12 per capita, and when we are moving it from inside a government department to outside, we are asking the system to adapt fairly significantly to something radically different from what it has been used to in the past.

My question to the members of the committee is, do you want to add another layer and do you believe that will make it easier to get it through the system?

I foresee many challenges ahead of us. I point out that there is a requirement for one youth member on the board. There is no problem with all of the members of the board being young people, but there must be at least one. As the bill stands now, it is in the hands of the minister to make the appointments.

It is within the purview of this committee to make a recommendation. It is obviously within the purview of the committee to amend the bill if it so chooses. I ask that you consider Mr. Wolf's comments in context, that he was one of three. You also heard two other presentations of programs that were very successful.

I would like to suggest to the committee, if it should agree, that we not move to clause-by-clause after this session, and that instead, we hold the bill in committee through the summer. There is still some written testimony that we have not yet received. This would also give us an opportunity to call for papers over the summer, which is one of our prerogatives if we are so inclined. It would give us an opportunity to call or to recall certain witnesses over the course of the summer, if we were so inclined.

We agree that there is no likelihood of the bill getting out of the Senate and into the House of Commons, given the workload that is currently facing the institution. Therefore it would be better to leave the bill open until September and wrap it up at that time, rather than close it now and have it sit, without us having an opportunity to address anything that might arise in the next three or four months.

I personally would feel more comfortable if the committee had it in its purview during that time.

I would be happy, together with my colleague, Senator Nolin, to deal with any questions.

The Chairman: Before I call on Senator Sibbeston, perhaps you could clarify one thing. Of course no one who sits on the board of an organization can then receive grants from that organization. Is there something in the bill concerning that, or have you thought about it?

Senator Kenny: We thought about it a great deal, Madam Chairman. I can probably quote you chapter and verse of the provision.

In essence, in the governance rules, no member of the board may participate in any decision that relates to a grant being given. They could not participate in the discussion or in any of the deliberations leading up to that. They would have to absent themselves.

The practice exists today in banks, for example, where people are asked to step out of the room if they have an interest in the matter. We have similar provisions in the Senate.

It says under clause 25:

(1) Every member of the Board shall declare to it, in writing, every interest that could give rise to a conflict of interest with the member's duty to the Foundation.

(2) Every position, office, contract or other interest held, directly or indirectly, by the member, or by a person or persons with whom the member does not deal at arm's length and of which the member has knowledge, must be declared under subsection (1).

(3) A declaration under subsection (1) shall be made at the time that the member joins the Board and whenever after an interest that must be declared either is acquired or comes to the attention of the member.

(4) A member for whom a contract, grant, activity, plan or other matter to be discussed by the Board would give rise to a conflict of interest shall, prior to the discussion, disclose the nature and extent of the personal interest that would be in conflict and follow the directions of the Board given under subsection (5).

(5) The Board shall give direction to a member who has declared a conflict of interest and shall decide whether the member may participate in the consideration of a matter, should refrain from discussion concerning it, should refrain from voting with respect to it or should withdraw from the meeting.

(6) Where the Board determines that a conflict of interest exists between a member's duty to the Foundation and a personal interest of the member, the Board may, in its discretion, put the member to the option of eliminating the conflict of interest or resigning from the Board by a specified time.

(7) The Board may establish conflict of interest guidelines and additional procedures to resolve conflict of interest, including techniques for the identification of potential conflict of interest situations.

In addition to that, board meetings are transparent. They are public. The grants are all transparent and are made public. I believe that we have done our best to address the conflict questions.

Senator Sibbeston: I would like to ask Senator Kenny whether this is for real. I understand you went through the process once before and were thwarted. Do you feel there is still some technicality or other circumstance that may arise to stop you?

I have no doubt that you will have support from the Senate, but do you have the support of government in the other place? Do you think that you will have the support of enough members of the House of Commons to get the bill through? If so, can it succeed?

Senator Kenny: You ask the tough questions, Senator Sibbeston.

I can tell you that I am very, very confident that this bill is procedurally correct, and that the flaws that existed in Bill S-13 from the perspective of the Speaker of the House of Commons have been eliminated. The preamble to the bill and clause 3 cure the procedural problems that were raised when Bill S-13 went to the House of Commons last time.

I do not think that anyone believes Bill S-13 failed for procedural reasons. We all understand that the Minister of Health, or any minister of the Crown, could have cured the problem had they risen the next day and said, "I have a ways and means motion in my pocket, and if our Speaker believes it is a tax, then I will use the motion in my capacity as a minister of the Crown to move the bill forward."

The bill did not go forward last time because of lack of political will. That is my judgment.

I believe that you are seeing something that I referred to earlier. The Senate has the capacity to come back again and again on issues like this. I think that there is a much broader base of public support now. I believe that there is a growing understanding amongst parliamentarians.

Frankly, parliamentarians have the same understanding of the issue of tobacco control as the average person. It is only when senators are exposed to presentations such as we have had from our own health community, and from the U.S. experts, that they understand how big the problem is, how many people are dying, how much it is costing, and that there is a workable solution. It is working not just in one, but in several places in the United States.

There are reasonable people in the other place. If they were exposed to this information, they would think the same way. I have no doubt at all that if members of the Commons had had the opportunity to hear what you have heard over the last two weeks, the bill would move forward. Assuming that this committee favours the bill, and assuming that the Senate supports it, which I certainly hope it does, then there is a three-month period in which to acquaint the members of the other place with it.

I do not think that the problem will be procedural. I think that the issue is whether there is sufficient time to provide the members of the other place with the information that we have received over the past two weeks.

If they understand it the way we have had an opportunity to understand it, I think that the bill will be successful. I believe that with all my heart.

Senator Sibbeston: I have become convinced of the merits of this bill. I have become a supporter of the task of trying to lessen tobacco use in the country.

Does the fact that you have had to take this action personally reflect on the government somewhat? Do you wonder why the government is not doing this when it is so clear that if they did, they would be helping themselves, because every $1 that they put in will have a $10 effect in reducing health problems and so forth?

I am wondering why the government has not done this. Is it a reflection of the thinking or a misunderstanding? Why have you had to take these actions rather than the government? I think that the government is the one that should be doing this. It should be most concerned.

[Translation]

Mr. Nolin: You put us in a rather difficult situation, Senator Sibbeston. It is difficult for us to tell you what the government thinks. You have painted a picture that could lead us to draw the same conclusions as you.

We shall not impute motives to the government. The key to success is information and the quality of the information. You said so yourself: I have come to the conclusion that this bill is valid. Why? Because you were properly informed. The same is true for the government. No government has innate knowledge. The same holds true here.

Obviously there are people in the government who are better informed on this matter. Why have they not acted? Let us be positive and hope that things will work out the next time. As Senator Kenny said: here, we know how to persevere. When we intend to do something, we stick to our guns and we keep coming back to the charge.

[English]

Senator Adams: The House of Commons only has a day and a half left before they break for the summer. We know we do not have time to send the bill to the House of Commons. Sometimes bills die on the Order Paper if an election is called. I do not know if the Prime Minister will change his mind and call an election in the fall. He has not told us yet. We will see what happens. Meanwhile, you are telling Senator Sibbeston that some bills are reintroduced with a different number, and it is not a problem. I would hate to see this bill die on the Order Paper. Sometimes, when we are reviewing government bills regarding health issues, we ask the minister to appear. Do you think that this committee could extend an invitation to the minister sometime between now and the fall?

Senator Kenny: Senator Adams, you are an experienced and wily parliamentarian. You are quite right. We have seen many good bills die on the Order Paper. I will deal with your question in two parts.

I believe that the first part of the question was whether I am concerned that this bill will die on the Order Paper. I am. However, I believe that an election in the spring is more likely than the fall. If there is a fall election, I believe that these committee hearings have put tobacco on the national agenda. I believe that candidates in every riding will be asked their position on tobacco control. If there is a fall election, the reporters covering debates will be asking party leaders for their position on tobacco control. Members of this committee have put this issue forward, so that it cannot be avoided in a debate in the next election. There are people in the community who will keep a public scorecard of which candidates are in favour of a comprehensive tobacco control program, and which are not. Candidates will go out of their way to make that position known.

As to inviting the minister, the steering committee did put the minister's name on the list and the clerk did invite the minister to appear before us. However, it is not the practice of ministers to appear in the Senate on private members' bills. If Mr. Rock is still the minister at the end of the summer -- sometimes there are Cabinet shuffles, as we know -- it may be that he will wish to reconsider, but it is not the normal practice.

I should note that ministers were also invited to appear on Bill S-13, but did not. In my time in the Senate, which is not as long as yours, I have never seen a member of the government appear as a witness on a private member's bill. They wait until it gets to the other place.

Senator Adams: This is a good bill. Perhaps we could find a way to change this from a Senate bill to a Commons bill. The Senate has heard many witnesses and holds much useful information.

Is there some way that the Senate can make this into a government bill so that it will not be killed in the House of Commons?

Senator Kenny: The Senate bill to which you are referring was a government bill. Many Senate bills are government bills. If a minister appeared, it was because the bill was a government bill.

The custom to which I am referring is for a private member's bill, which can be either a Senate bill or a Commons bill. The custom is for ministers not to appear on it.

Having said that, nothing would please me more than if our clerk got a phone call from the minister's office saying that he would like to come and talk to us about the bill. I am sure that the Chair and the steering committee would encourage you to come back and have a special meeting to hear what the minister had to say. I know I would be happy to hear what he had to say, but I was not surprised when he said no, because it is not the custom.

Senator Adams: You mentioned the possibility of an election. As you see it right now, will some of the politicians use this issue in their campaigning? Is it good for them to be seen as supporting Bill S-20?

Senator Nolin: It is good for everyone.

Senator Kenny: We heard from Mr. Kyle, who covered a fairly long list of people who seem to like this bill. I think he is right. There is a growing sense of support.

My understanding is that the Canadian Cancer Society will be doing some public examination, some surveys, to see how strong that support is. Perhaps we could ask Mr. Kyle to share those results with the committee as they become available over the summer. The question left hanging after hearing Mr. Kyle is, who is against the bill?

Senator Adams: You have introduced this as a private bill in the Senate. Will you be writing to the candidates in the House of Commons and asking them to support your bill?

Senator Kenny: I have not yet written to anyone in the other place to ask them to support the bill. I felt it was premature until this committee passed judgment on it, but I keep hearing rumours that members are getting letters. I look at that as a sign of public support. People do not take the time and trouble to write to a parliamentarian unless they are very concerned about an issue.

Senator Adams: Madam Chairman. We have a couple of private bills that are still holding in the Senate. If some of the MPs are running again, will you approach them and offer to support their bill if they support your bill? Will you be doing that?

Senator Kenny: I would have to look at each bill individually before I would buy into that.

Senator Nolin: Hopefully, the Senate is not a stock market.

The Chairman: Thank you, senators. Concerning future business, Senator Adams wrote to the committee asking it to look at the Peigan Nation wind turbine project and their inability to complete that work because of a technical glitch concerning tax credits. I will not go into details, but if no one has any objections, I suggest that we write to the relevant departments telling them that the project is a very good one, and ask them to come up with a solution.

Senator Taylor: To clarify, it is the Peigan Nation project, but it will be located on the Peigan Indian Reserve.

The committee adjourned.