Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue No. 20 - Evidence - April 5, 2017
OTTAWA, Wednesday, April 5, 2017
The Standing Senate Committee on Social Affairs, Science and Technology, met this day at 4:16 p.m. to study Bill S-5, An Act to amend the Tobacco Act and the Non-smokers' Health Act and to make consequential amendments to other Acts.
Senator Kelvin Kenneth Ogilvie (Chair) in the chair.
[Translation]
The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
I am Kelvin Ogilvie from Nova Scotia, chair of the committee. I will invite my colleagues to introduce themselves, starting on my left.
Senator Eggleton: Art Eggleton, senator from Toronto and deputy chair of the committee.
Senator Frum: Linda Frum, Ontario.
Senator Hartling: Nancy Hartling, New Brunswick.
[Translation]
Senator Petitclerc: Chantal Petitclerc from Quebec.
[English]
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator Seidman: Judith Seidman from Montreal, Quebec.
The Chair: This is the first of our scheduled meetings with witnesses on Bill S-5, An Act to amend the Tobacco Act and the Non-smokers' Health Act and to make consequential amendments to other Acts. It is also known by its short title, Tobacco and Vaping Products Act.
We have two panels of witnesses today, colleagues. I want to remind us that each panel is one hour long. There will be one question per senator per round. I will ask you to direct your questions, in the first instance, to a specific witness. If the alternate witness group wishes to respond, signal through the chair that you also want to add something to the response.
Witnesses and colleagues, I will ask you to be very focused in your discussions — no long preambles. If the witnesses will focus their answers with a minimum of extraneous background information, that would be appreciated.
We have a great number of documents in our files. You must assume that all senators have read all the documents we have received, so you do not need to repeat long aspects of your other submissions to the committee but get right to the answer.
We have today on our first panel — which will end no later than 5:15 p.m. — from the Non-Smokers' Rights Association, Melodie Tilson, Director of Policy; and Pippa Beck, Senior Policy Analyst. From the Tobacco Harm Reduction Association of Canada, we have Jaye Blancher, Director; and David Jones, Policy Advisor.
I will call the witnesses in the order they are listed on my agenda. Ms. Tilson, I invite you to make your presentation.
Melodie Tilson, Director of Policy, Non-Smokers' Rights Association: Thank you, Mr. Chair. Good afternoon, senators.
Thank you for the opportunity to speak to you today regarding Bill S-5. I am the director of policy with the Non- Smokers' Rights Association, and my colleague is the senior policy analyst. We have both been with NSRA for more than 10 years, and I have personally worked in tobacco control for 27 years.
NSRA is a national non-profit organization that has worked exclusively in tobacco control since the earlier 1970s. Our name reflects the fact that when we began our work, the key issue was protecting non-smokers from second-hand smoke. Since that time, our perspective has evolved, and we now focus much of our work on the root cause of the tobacco epidemic: the tobacco industry and its strategies to promote tobacco use and undermine tobacco control.
NSRA has been at the forefront of many significant tobacco control reforms over the past four decades, including campaigns for the federal Tobacco Act, world precedent-setting graphic package health warnings and for tobacco tax increases, to name a few.
NSRA strongly supports Bill S-5. It provides a long overdue framework to legalize and control the sale of e- cigarettes with nicotine, and it includes important amendments to the Tobacco Act to provide the legislative authority to implement plain and standardized tobacco packaging.
With the chair's permission, we would like to share with the committee a mockup of what we see to be plain and standardized packaging.
The Chair: To be fully certain that we are complying with all the Rules of the Senate, I will ask you to set them aside and I will tell the senators that they can pick them up at the break. We do not normally use props within the issue unless it is illustrative of something that we are researching as a study.
Ms. Tilson: Nonetheless, there are a number of amendments that we believe are critical to strengthen the bill and ensure that it fulfills the government's intent. Committee members should have a copy of our detailed list of amendments. Given time constraints, I will only highlight a few.
I will begin with the provision to establish legislative authority for plain and standardized packaging measures. As drafted, Bill S-5 prohibits a limited number of promotional elements on tobacco packaging: "the use of terms, expressions, logos, symbols and illustrations.''
We want to ensure that the government has the authority to enact all of the prohibitions outlined in the plain and standardized packaging consultation document, so we are seeking an amendment that would explicitly expand the list of prohibited promotional elements.
Tobacco companies have increasingly exploited every possible packaging design element to minimize the impact of the health warnings; to downplay health concerns, and convince smokers that they can choose a less harmful brand or brand variant rather than quitting; and to continue promoting a variety of brand identities to target new smokers.
We believe that in addition to expressions and symbols, it is essential that plain and standardized packaging also prohibit variations in package size, shape and opening style. It is also essential that the government limit brand and brand variant names so that companies cannot use a brand name, for example, to connote positive lifestyle or body image associations.
You will likely hear from staunch opponents to plain and standardized packaging, from tobacco companies and their allies in the Canadian Convenience Stores Associations and the National Coalition Against Contraband Tobacco that plain packaging doesn't work, that it caused contraband to increase in Australia, and that it will fuel the contraband market here at home. In fact, none of these statements is true.
NSRA has prepared a fully-referenced document that debunks all of the myths about plain and standardized packaging that tobacco companies and their front groups are spreading around the world. We have provided an electronic copy and given a hard copy to the clerk today.
The comprehensiveness and thus effectiveness of the plain and standardized packaging regulations that Canada ultimately mandates may depend in part on the extent to which tobacco industry lobbying does not interfere with policy making. To this end, we feel it is very important to amend the Tobacco Act to ensure greater public awareness of tobacco industry activities to undermine public health policy in partial fulfillment of Canada's obligations under the Framework Convention on Tobacco Control. Note that the term "tobacco industry'' is defined broadly in guidelines to the global treaty and includes industry allies in the retail sector and others.
I believe that committee members received last night a copy of an internal Imperial Tobacco presentation — this one here — that proves the extent to which the Canadian Convenience Stores Association and NCACT played key roles in tobacco companies' strategies to prevent tobacco control measures.
Our amendment would require that companies disclose to the health minister information on activities and expenditures related directly or indirectly to influencing health policy and that all such information be available to the public, unless prohibited by the regulations.
I will mention only briefly two other amendments that we believe are essential. We need amendments to ensure that herbal shisha and water pipe use are fully covered by the provisions of the act, and we also believe it is important to prohibit tobacco promotion through the sale of tobacco-branded accessories and non-tobacco products and services.
I will turn now to vaping products.
NSRA supports most of the measures in Bill S-5 to regulate the marketing and sale of vaping products, both with and without nicotine. However, we believe that, despite Health Canada's stated intention to balance risk with access, Bill S-5 focuses disproportionately on the risks of vaping products, without adequate consideration of the potential health and economic benefits of shifting large numbers of Canadians away from smoking.
Health Canada has stated that vaping products are "likely'' less harmful alternatives to tobacco use. This is incorrect. Although the extent to which vaping is less harmful than smoking remains a topic of spirited debate amongst scientists, the evidence to date shows that e-cigarettes are less harmful than cigarettes. Research also indicates that beliefs that vaping is as risky as smoking may impede smokers from trying and regularly using e-cigarettes, choosing to continue smoking instead.
While it is important for people to know that vaping products are not inherently safe to use, it is equally important for smokers to know that less harmful choices exist. Smokers desperately need and have a right to reliable information about vaping products on which to make informed decisions.
As drafted, Bill S-5 provides no assurance that regulations would require the provision of relative risk information, which clearly runs counter to the goal of the Tobacco and Vaping Products Act "to protect the health of Canadians in light of conclusive evidence implicating tobacco use in the incidence of numerous debilitating and fatal diseases.''
To this end, we have proposed a number of amendments that would permit and indeed require both companies and the government to provide accurate relative risk information.
We are also recommending a number of amendments to limit the promotion of vaping products, including a ban on lifestyle advertizing and an essential provision to establish regulatory authority that would permit the government to adjust controls on vaping product advertising and promotion in response to prevalence data and market developments.
I thank you for your time and attention. We look forward to your questions this afternoon.
The Chair: Thank you very much. Now I will ask Mr. Jones, the Policy Advisor to the Tobacco Harm Reduction Association of Canada, to make his presentation.
David Jones, Policy Advisor (Tobacco Harm Reduction Association of Canada): Thank you. The Tobacco Harm Reduction Association of Canada, THRA, would like to thank this committee for having us here and for this invitation to provide evidence to you on behalf of consumers.
THRA is a national and international rights education organization, and we advocate for vapers and smokers to be given the freedom to have access to safe alternatives and combustible tobacco products. THRA has no conflicting interests in the vaping, tobacco or pharmaceutical industries. We are not medical experts or scientists, but we are consumers of this product.
The Chair: Mr. Jones, I will ask you to slightly slow your speech in order for the translators to get it. That does not increase the time you have allotted.
Mr. Jones: Are you sure?
Our views are based on real science as delivered through peer-reviewed studies by world-leading scientists, medical professionals and tobacco control experts and our experiences as ex-smokers and now vapers.
Bill S-5's impact on tobacco and smoking/vaping regulations will impact the health now and in the future of a large proportion of the Canadian population. In order for that impact to be beneficial, Bill S-5 must be based on real science and a tobacco harm reduction strategy without bias or smoking ideology. We owe this to the 37,000 Canadians who die each year from smoking-related diseases. We owe this to their friends, families and the future of our youth.
We have discussed these issues with the vaping community and leading international and Canadian vaping experts. The critical analysis is that Bill S-5 in no way supports harm reduction or the potential of vaping. It conflates vaping with smoking, which will deter a significant portion of current and future smokers from switching to a safer product. The real fight is against smoking, not nicotine or vaping.
Bill S-5 has redefined smoking to include vaping. The act of vaping is not smoking, as there is no combustion or tobacco. Vapor is not second-hand smoke. Nicotine is not tobacco. This definition needs to be clearly separated so as not to encourage confusion, as it implies vaping is the same as smoking.
Bill S-5's emphasis is focused on the harms and safety concerns of vaping without the key issues of relative risks compared to smoking. Consumer e-cigarettes should not be regulated like medicine or tobacco. Instead, an evidence- based, regulatory, stand-alone act specific to e-cigarettes as per HESA recommendation 3 should be created that addresses legitimate safety concerns but maximizes smokers' knowledge of and access to alternative harm-reduction products.
Bill S-5 emphasizes that this act is primarily aimed at stopping youth from vaping and smoking using a gateway theory that youth will start vaping and then graduate to smoking. This has caused an overly cautious approach on a theory that has been debunked by many reputable health organizations such as the University of Victoria, Public Health England and the Royal College of Physicians and Surgeons, to name a few.
Current studies, surveys and reports suggest that youth vaping has increased, but the latest Health Canada, FDA and UK reports all show record-low youth and adult smoking. Is this a factor of experimentation or possible harm- reduction efforts by existing-use smokers or some other factor? More research and monitoring are required on youth and nonsmoker vaping. However, a trite use is frequently misreported with every puff, use and experimentation presented as regular use.
Public Health England states that among youth. e-cigarette use is almost exclusively confined to those who are existing smokers.
A major component of the vaping experience is different flavourings, which helps smokers quit and keeps vapers from relapsing. THRA does not support any ban on flavouring unless there is a legitimate, science-based reason or health concern, and not because youth may like the same flavours that adults like. There should only be common- sense-based restrictions on packaging and advertising that may appeal to youth with input from stakeholders and no prohibition on accurate names of all flavourings. Like any product, consumers need accurate descriptions to make purchases without being confused.
There is no solid guideline for reasonable grounds on what appealing to youth actually means. All the sensory attributes are subjective, depending on who makes the decisions on what is youth-appealing, based on criteria that have so many variables. This would require stakeholder consultation to develop objective criteria for this type of regulation. What one person may think is aimed solely at youth, another may think otherwise. It must be stated that youth under 18 years of age are already restricted from purchasing these products.
As it stands, Bill S-5 prevents smokers from receiving relative risk information, which clearly runs counter to the stated goal of the proposed Tobacco and Vaping Products Act to protect the health of Canadians. Does this mean that a consumer who makes an online review on vaping or battery safety or a testimonial is a criminal? It places every scientist, advocate, vaper and vape shop employee in an ongoing series of choice about giving accurate and personalized information that could save the lives of smokers and risking fines of up to $500,000 and two years in jail. Even Health Canada recognizes that vaping products could bring public health benefits. Does that mean they would also be in contravention? Would they go to jail?
Bill S-5 introduces the same regulations for vaping products that are in place for tobacco products in all federally regulated workplaces. A federal vaping policy that treats e-cigarette users like traditional cigarette smokers may discourage many federal employees from making a complete switch to the less harmful product and away from a tobacco harm reduction strategy. THRA does not support any bans based on possible harms unless the health hazards are evidence-based and scientifically proven.
In summary, stand-alone legislation, including THRA's recommendations and those made by the HESA report 2014, would propel Canada as a world leader in tobacco harm reduction. This supports the goals of public health and tobacco harm reduction for smokers, vapers, their families and all Canadians by helping to reduce smoking and related deaths. It also lessens the burden on public health budgets and is a major win for all Canadians.
Canada deserves a modernized, 21st century approach to tobacco and nicotine regulation that will reduce harm and remain relevant in the face of rapidly changing technology and an ever-increasing spectrum of alternative nicotine products. E-cigarettes and the development and marketing of other reduced risk options for Canadian smokers represent an unprecedented public health opportunity. Do not let this pass us by.
Consumers and industry are major stakeholders in any legislation concerning vaping and need to be directly involved with future hearings and following regulations and consultations — nothing about us, without us. Thank you.
The Chair: Thank you very much. You came in within your time.
I will now open up the floor to questions.
Senator Petitclerc: My question is for you, Mr. Jones. Flavour is one of the big concerns of the bill, so let's get that out of the way at the beginning.
We read a lot from the vaping community — and I have been following it — and many campaigns about how they are taking away flavours. "You are taking away my flavour, and that helped me to stop smoking.'' It is a misconception. As you said yourself, the flavours will not be banned. The name will be changed and the promotion of names targeted to kids is what we are trying to achieve here.
I want to have your opinion and your view on that. My thinking and understanding of it is that probably there will be a transition, because if the name changes, a consumer will need to learn the new name, but that is only temporary. In the end, isn't it more important to protect our youth?
Mr. Jones: Flavours are very important to the experience from smoking to vaping. Every vaper has gone through that transition and has used flavour, be it fruit, dessert or tobacco. It's what stops us from relapsing, going back to smoking.
To get to your point, when you say candy or a dessert name should be changed because youth may like that, youth like many flavours adults like. When I go into my vape shop and I want to get an apple pie flavour or another candy flavour and he says, "I'm sorry, I can't put that name on there because some kid might like it,'' I'm sorry, but I want to know exactly what I'm purchasing. As with any consumer, if you go into a liquor store and look for a drink that has apple pie in it, you don't go into a liquor store and see nothing that says apple pie; it may have some other name that denotes that particular item. It would be very confusing, and I would be upset because it is a real name. Because some youth might like the same thing, well, youth like a lot of things we like, too, especially flavours. That's the thing. For example, ice cream, or anything. When you put a product out that says "ice cream'' or "apple pie,'' that's what it is. You don't change the name because some kid might like it.
That's the position, right, Jaye?
Jaye Blancher, Director, Tobacco Harm Reduction Association of Canada: I agree with you.
Pippa Beck, Senior Policy Analyst, Non-Smokers' Rights Association: I would like to address the senator. It's our understanding that it's not the names that would be changed; it's the inherent flavour. We are not against flavourings for nicotine products. It's just ones that are overtly targeting children, such as candy and dessert, wouldn't be acceptable. There is a whole range of crazily named flavours out there that nobody knows, like "unicorn puke'' and all sorts of crazy things that no adult would be attracted to. It's in that realm where it gets a bit tricky.
Mr. Jones: Can I say something?
The Chair: Mr. Jones, we will not get into a debate among witnesses.
Senator Petitclerc, do you have sufficient answer to your question?
Senator Petitclerc: Yes.
Senator Seidman: I have a question for you, Mr. Jones, as well as you, Ms. Tilson.
The questions are different. Is it possible to state them at the same time?
The Chair: Yes.
Senator Seidman: Thank you.
Mr. Jones, you say in your presentation to us that the act of vaping is not smoking. There is no combustion or tobacco. Of course, that is quite true. So you say nicotine is not tobacco and you use this as some rationale for your argumentation to us. However, what we do know is that nicotine is a highly addictive substance. In fact, it can be toxic — even deadly, depending on the concentration. Bill S-5 doesn't establish standardized levels of nicotine for the liquid used in vaping. Would you recommend safeguards around the liquid ingredients, specific standards for nicotine levels?
Mr. Jones: I certainly agree there should be safety standards set. ECTA, which will be talking tomorrow, is the standards and regulations for e-liquids for that type of requirement. It is safe to say that, yes, nicotine can be addictive, but we found out that nicotine in cigarettes is highly addictive because of the way the cigarette companies have made them, because of added extra chemicals. We have noticed that within the vaping community, most vapers start at a certain level and they decrease their nicotine levels down to zero. In my case, I went from 24 down to zero. If it were as addictive as people say, I would not be able to do that.
The same condition applies for nicotine replacement therapy, like gums and patches that also contain nicotine. They are used to bring people down to a zero and for cessation. So to say that nicotine is highly addictive depends in which cases you mean.
Ms. Beck: I want to point out that nicotine technology is changing rapidly. Although some of the current products on the market might not be able to deliver, we can expect that with third generation and as the technology changes, they will be better able to mimic the nicotine delivery that a cigarette currently delivers.
In one respect, that's really exciting because it's going to make them even more effective for us as a cessation product. However, on the flip side of that we do need to be very careful in terms of them being in the wrong hands.
Senator Eggleton: I think the major issue we're probably going to be dealing with is the vaping concern about youth versus smoking cessation.
I have Mr. Jones' views quite clearly on the matter, but I want to hear a little bit more from the Non-Smokers' Rights Association, because while you support vaping being covered in the legislation, being regulated, you also talked about it in terms of a cessation program, that it has advantages for people to get off of regular tobacco cigarettes.
The concern is in terms of these flavors. I've heard before, and not just from Mr. Jones, that that seems to be a major factor in people deciding to go the route of e-cigarettes or the vaping, and yet there's the concern that it might be attractive to children. But Mr. Jones says there's no evidence that children are smoking any more. There are record low levels of youth and adults smoking, in fact, while the vaping is increasing. That doesn't seem to be increasing. Maybe the evidence doesn't quite back up the fact that maybe children are susceptible to this, I don't know, but I'd like your comment on that. How do we square that? How are we going to be able to provide for legislation that could help people to get off cigarette smoking without it becoming a gateway, as is frequently said, for young people?
Ms. Tilson: There are a number of parts to the answer. Flavouring is definitely one piece of the puzzle. We believe strongly that the legislation needs to balance risks to young people taking up vaping and becoming addicted to the nicotine in vaping, regardless of whether vaping products are a gateway to cigarettes. That's another whole issue. But at the same time, as we said, we want these products available to help smokers get off the most dangerous form of nicotine, which is in cigarettes.
Flavouring is one aspect where these products are appealing to children. There are various studies and surveys that show that it's the flavouring that entices them to try these products.
Has Health Canada arrived at a perfect solution — a perfect compromise? I don't think such a thing exists. We know that fruit flavours are appealing to children, but they're also a very common choice amongst vapers, so we don't support a ban on fruit flavours but we do support what the legislation is proposing, which is a ban on confectionary candy flavours. There's no reason for a vaping product to be in a gummy bear flavour in order for there to be sufficient flavour choices available for adults that want to use these products.
We also have proposed a number of restrictions on promotion. We don't think there should be unfettered promotion of a product that is addictive. Although it is safer than smoking, that doesn't mean there shouldn't be controls; hence our strong recommendation that regulatory authority be added to the bill that would allow the government to adjust permitted forms of promotion down the road, which could mean liberalizing or restricting depending on what happens with youth uptake and with quitting.
There are a lot of unknowns. The data from the U.K. does not necessarily reflect the data here or in the U.S. in terms of youth experimentation with these products. When e-cigarettes with nicotine are legalized, we will have a different situation. Big tobacco that produces some of these products will in all likelihood be entering the market.
Senator Stewart Olsen: I have real concerns over the legislation. I'll be absolutely direct with you. I also would like your comments, from both groups, if you wouldn't mind. This legislation is driving people towards vaping. We don't know that much about vaping. Certainly, with nicotine in the vaping, I'm concerned that it's just changing one addiction for another. People are saying "Well, it's less harmful,'' but we don't know that. People didn't know it was harmful to smoke tobacco for years. I think we have to consider that anything you take into your lungs is a potentially dangerous drug. I'd like your comments on that, please.
Mr. Jones: We have 37,000 people who die each year from smoking. Are we happy with allowing that to happen year over year? We do know that after 10 years of data for vaping, it is certainly a lot less harmful to those people who have switched. With any people who actually quit smoking for vaping, that has to be much better than the status quo of those people dying, as we have now.
So I think that, yes, vaping is not benign; it's not 100 per cent safe. Nothing is. However, it is something that will actually allow people to get their requirements should they use nicotine. And as I said before, a lot of vapers go down from a certain amount of nicotine to zero.
My own son quit smoking and he quit vaping. This is a proven fact. There are probably hundreds of thousands of vapers in Canada and across the world there are millions who have tried this and are doing the same thing, because they don't want to smoke anymore. We are not smokers. I think people have to realize that. We are not smokers and vaping is not smoking. That's a big thing that people have to realize.
Ms. Beck: The evidence is still emerging. We don't have a robust body of evidence like we do for tobacco, but we do have a lot of experience in studying tobacco. So the evidence is quite clear that e-cigarettes are less harmful, but as Melodie has said the spirited debate is around the degree of less harm. Is it really 95 per cent as we often hear?
I was just at a meeting with Health Canada and international experts, and the consensus is more in the 60 per cent to 80 per cent realm, which gives us unparalleled opportunity to really make a difference in this epidemic that we're facing.
Nicotine replacement therapy is effective in certain cases when it's used with counselling, et cetera. There are barriers. But you don't see organizations cheering around nicotine replacement therapy. This is a totally different ball game. I think you're right that we still don't know all of the details around what's in the vape, but I think we've got enough information that we need to move on this. Lives are at stake. As more evidence becomes clear, we can hone our regulations based on what Melodie said. So you're right, but this is an opportunity we can't miss.
Senator Neufeld: I haven't smoked for 33 years, but when I did smoke, I didn't buy a package of cigarette because the package was pretty. I bought them because I wanted cigarettes and wanted to smoke cigarettes.
I think there's a real deterrent to the pictures that they have on cigarette packages now, to be perfectly honest, of what can happen if you smoke. Why would plain packaging help a person not smoke? I don't get the correlation. If you see someone without a throat or their mouth half gone on a package of cigarettes, I think that would deter you more than just a plain package. I don't understand that.
Ms. Tilson: I'm happy to have the opportunity to answer that. Packaging is the last bastion of marketing that's available to tobacco companies in this country and in various other countries such as Australia and the U.K. where plain packaging has already been implemented.
If you haven't smoked in decades, you probably haven't been up close and personal with a cigarette pack. You might be surprised how they've changed.
This is what a cigarette pack looks like nowadays. Those huge graphic warnings that my own organization and many other health groups fought really hard for are now practically illegible and invisible. There is no in your face ugly graphic here. There's a pretty little package, and inside the pretty little package there are more pretty colourings that belie the toxic nature and addictive nature of the product inside.
One of the things that plain and standardized packaging would do is make the warning graphic and visual stand out again. And there are all kinds of studies, dozens and dozens of studies from different countries that show one of the most important aspects of plain and standardized packaging is to make the warning more salient, to make smokers pay more attention to the warning, to make non-smokers who see a package lying around take heed of this warning.
The industry uses all kinds of different design features to downplay the warning. Here is another recent pack. This is called a side push pack. This is stand-alone. It can go in your purse or your pocket just like this. Guess what? There's no warning on this package, which is mandated by law in Canada.
So there are many workarounds to undermine the effectiveness of package warnings.
The other thing tobacco companies have done is use colours to imply that certain brand variants are "lighter.'' We banned the term "lighter,'' but they use more white on the packaging, lighter colours, different brand descriptors, and I could go on and on, to suggest to smokers you don't need to quit. Switch from that robust red coloured package to a lighter coloured package and you will be smoking a lighter cigarette, which means less tar.
Again, there are dozens of studies from all over the world that show that this is what smokers believe when the packages come in different colours. Smokers also believe that little packages like this hold less harmful products than big packages like this. So there are many things that plain and standardized packaging could do.
The last point I'd like to make is it makes no sense on logical or ethical grounds that a product that is highly addictive and kills one out of every two long-term users should be allowed to be sold in attractive branded packages. Governments need to do everything they possibly can to get people not to start and to help them make the decision to quit.
Senator Raine: I'm very curious. First of all, for Mr. Jones, how is your organization organized? Do people who vape buy a membership? How is your organization set up, and how is it funded?
Ms. Blancher: We're all directors. We have public advisers, and then we have a membership of 1,200. We are all 100 per cent volunteers, and we represent the consumers of Canada.
Senator Raine: I'm sure you are volunteers, but there must be some expenses incurred by the organization. For the 1,200 people who join, do they pay a membership fee, an annual fee?
Ms. Blancher: No, they do not. They are members of our Facebook website.
Senator Raine: Where does the revenue come for your organization to exist?
Mr. Jones: It comes out of our own pockets. We pay a lot of our own expenses because we are volunteers. We believe in what we're doing. So we don't charge any money to our members to be with us because we're trying to help everyone to get off smoking. That's what our rationale is.
Senator Raine: The other question I have would be for both groups. Looking down the line, as you know, our government intends to legalize marijuana. What is your concern? Do you have any concern about the marijuana flavour being vaped by children and marijuana itself being vaped as opposed to smoked? I'm concerned about the age that we're embedding in this as being perhaps too young when it comes to marijuana.
The Chair: A very quick answer; this is outside this bill.
Ms. Beck: It is provided in the bill that marijuana flavouring is banned. Once the legislation comes in to effect for marijuana, it in turn would address the issues around e-cigarettes.
Senator Frum: I would like you to amplify on your suggestions for amendments. You went through them pretty quickly. In one of them, you mentioned that there may also be a need to regulate other vaping related products. As a non-vaper, I'm not sure what those are. Can you explain that a little bit?
Ms. Beck: Rothmans, Benson & Hedges just introduced a new product in the last month or so called iQOS, which is a hybrid product between tobacco and vaping. It has tobacco in it, but it also doesn't combust. This is just the beginning of a whole new generation of these hybrid products. I mentioned technology is changing quickly, and it's not just this company. It's all three big tobacco companies. We need to be prepared to make sure that our legislation is going to be able to capture all of these new products. Health Canada has advised that iQOS will be captured as a tobacco product but, as these products become more obscure and so forth, we need to make sure that the legislation doesn't allow for any cracks.
We're recommending that the definition of tobacco be expanded, and we're pleased to see that there's regulatory authority under the definition of a vaping product to include any product as a vaping product.
Senator Hartling: Thank you very much for your presentation. I know we're quite aware that second-hand smoke does affect us. With the vaping products, do you know if there's any research been done on the vaping stuff that comes out to the user or to other people? Is there any research on that? Do either of you know?
Mr. Jones: Actually, there's quite a lot of information that has come out over the last couple of years. Obviously, it's been one of those major concerns in terms of what is coming out.
It's not benign; there are certainly some chemicals that do come out. But the latest research that has come out has shown that the level of exposure to the bystander is at such a low level that it should not harm bystanders. We've actually sent that in as part of our submission as to the latest studies.
Also, the vaper gets what that person needs, which is either a little bit of nicotine, or no nicotine, but it's the habit of using vaping to just enjoy themselves. You have to remember, vaping has two aspects: One is to enjoy themselves. It's the same as smoking but it's not smoking. The other aspect is that you can use it for cessation. As I said, my own son used it for cessation and quit both. There are two aspects to this. It's just like somebody who likes coffee or decaffeinated. It's the same idea.
Senator Hartling: I'm thinking about effects on other people, around children or breastfeeding mothers.
Mr. Jones: There have been some studies on that. We can certainly give you some more information about that. Right now, the levels that they have identified have been at low levels. It all depends on how the actual vaping is used. Some of these studies show high levels, but that's because it's not real world and it's not used by real vapers. They build it up and scare people without using real information.
Ms. Beck: The information is building. It remains inconclusive, but I do agree with David Jones. From what we see so far, the toxins within the vapor are in trace amounts, but the science as it stands is riddled with methodological problems, so we need to be cognizant of that.
Our organization is advocating that smoke-free spaces stay as smoke-free and vape-free, because it's a false comparison to say that vape is less harmful than second-hand smoke. All of our environments are smoke-free right now, so we don't want to see a chemical introduced into the environment until we know more about it.
The other issue is that smokers have been able to abstain in smoke-free environments, so to suddenly be permitted to vape indoors is a step backwards for individual vapers and it's a step backwards for public health as well.
Senator McPhedran: This is a question to Mr. Jones, and certainly your colleague is welcome to answer as well. I was struck by how you answered the question about the funding for your activities. I didn't hear you say that you pay personally for all of your expenses. My question is to understand more clearly the sources of funding for your activities of promoting vaping.
Let me be specific: Do you receive any funding for your organizational efforts from retailers? Do you receive any funding for your organizational efforts, including presentations such as today, from producers of vaping products or anything related to vaping?
Ms. Blancher: Absolutely not. This is purely out-of-pocket expense.
Senator McPhedran: So you pay on an individual basis, as volunteers, for all of your expenses for your organization, anything related to advertising, travel — everything you pay, as volunteers?
Ms. Blancher: That is right. We represent the consumers. For us to accept funds from organizations that may do harm to our membership would be a conflict, I am afraid, that we will not entertain.
Senator McPhedran: Is one of you, or both, a founder of your organization?
Ms. Blancher: No.
Mr. Jones: I was one of the original founders, with a couple of other people. One of our positions is that we are for the consumer. We have no conflicts of interest. As we said originally, we don't have any conflicts of interest with the tobacco, vape or pharmaceutical industries. We have no conflicts there, and we stand by that statement.
Senator McPhedran: Did your organization commission any of the research you have tabled with us, or contribute to the research?
Mr. Jones: We have taken all those studies, et cetera, from experts and international experts in the field, such as the University of Victoria study that is coming out. A couple of other major ones are peer reviewed and out in the World Wide Web. There are a lot of resources that we access to be able to provide those types of studies to this committee. We do not commission anything, but we ask that if they do find something, we would like to know.
Senator Petitclerc: Thank you so much for all your answers. I would like to hear from you with regard to therapeutic claims, especially from the Non-Smokers' Rights Association, but feel free to add anything.
We know that nicotine products have to meet standards for quality, safety and efficiency. It has to go through the Food and Drugs Act in order to make claims, such as that this product will help you quit smoking. I read that you consider that this process is too long, but I think we all agree that the process is necessary. I want to hear a bit more on what you think about the process itself. Is it only the length of the process that you are concerned about? What would be the best scenario in order to address those possible therapeutic claims?
Ms. Beck: Yes, we are concerned about the dual route to market. We are concerned that, because of the cost and the length of time, by the time a therapeutic product was authorized as such, it would be out of date and outmoded because the technology is changing so quickly. However, we do recognize the need for proper claims and we don't want any old product making claims that are false.
This is why we come back to relative risk, because it could be that we have no products on the therapeutic side, so there are no products out there that are giving smokers accurate information about their relative risks.
Ms. Tilson: We realize there is a really fine line that needs to be walked here between consumers having the information they need on which to base a decision to use or not to use vaping products and, on the other hand, allowing companies to make deceptive or misleading claims. So what we are proposing is that companies be allowed to make a relative risk statement that has been approved by Health Canada for products that haven't gone through the therapeutic route.
The challenge is that if you don't allow vaping companies to say anything about the fact that these products are less harmful than smoking or that they may be of some assistance in smoking cessation, then the companies are left with marketing these products as lifestyle accessories. We have seen a lot of that type of marketing in Canada over the last five years or so while vaping products with nicotine were illegal and yet still available. We don't think that serves anyone's interest. We do not want these to become the next sexy accoutrement when you are going out for the evening. That doesn't help smokers, and it certainly doesn't help young people. A limited range of vetted information that these products are safer, that there is no combustion, no smoke, that type of thing, we would think would be beneficial on products and on promotion.
Mr. Jones: I certainly agree with that position as well.
Senator Seidman: I would like to follow up on what you just said, Ms. Tilson. It is the case that some would say that vaping devices should only be used for therapeutic purposes in smoking cessation, and no other use at all. What would you say about that?
Ms. Tilson: In an ideal world, absolutely. We would only want smokers who are trying to quit to use these products. We don't have an ideal world. We have companies out there that are trying to make a profit, and we have a society where people are drawn to products that are addictive. As I mentioned before, I think what this legislation tries to do is balance what the country needs in terms of protecting youth and helping smokers.
We want smokers to stop using a product that is killing half of them. For every smoker, every one of the 37,000 Canadians who die every year because of their tobacco use, there are about 20 more who are suffering from a tobacco- caused disease. That has to end. This is one possible way of reducing the death toll. At the same time, I don't want my children getting addicted to nicotine because vaping products are everywhere and they come in all of these attractive devices with attractive flavours.
One of our strongest recommendations is that the types of promotion that vapers have said they want — where they can try a product and be told how to use it, they can see products displayed, et cetera — only be permitted in specialty vape shops that are off-limits to minors, so e-cigarette sales with nicotine and vaping products with nicotine promoted only in specialty vape shops.
Senator Seidman: I think you have been asked this already — and certainly Mr. Jones has — but I would like to hear from you on the issue of a gateway for youth. You have said that nicotine is addictive and that you don't want your kids getting addicted to nicotine. Some are concerned that this will re-normalize smoking for a whole new generation of kids. What would you say to that?
The Chair: Do you want to direct that to Mr. Jones?
Senator Seidman: No, to Ms. Tilson.
Ms. Tilson: There isn't a lot of evidence to date that the availability of vaping products with nicotine is re- normalizing smoking, but it is an evolving landscape. If we allowed vaping in all the places where we have banned smoking, I think the risk would be higher. If we allowed the sale of vaping products with nicotine everywhere in every unregulated flavour, I think the risks would be higher. It is also important to separate the risk of nicotine addiction among young people from the risk of this being a gateway product to cigarettes.
Senator Eggleton: This time I will ask Mr. Jones a question.
You have given your views with respect to flavours and the importance of vaping in terms of cessation programs, but there is also the question of advertising. Would you support a ban on e-cigarette advertising on television and radio? Would you support a ban on e-cigarette branding of T-shirts, baseball hats and various other products like that? Generally, I'm asking about a ban on lifestyle advertising for e-cigarettes. Would you support those measures?
Mr. Jones: I would suggest advertising on media after a certain hour, just like anything else for adults. Also, to be able to show those types of promotions in adult venues is certainly correct. We are talking about a product that is aimed at adults. Hopefully, the children would not be able to see or go into those particular venues that are adult-only.
As to banning hats and T-shirts, that is a freedom of expression-type thing, I think. I would not like my kids to see that, but that is one of those things that we always see most of the time on T-shirts and advertising. I wouldn't say that we should be saying "buy this'' or "buy that'' on that T-shirt, but having a logo? It depends on what you determine what is okay for youth. I could not say what is our position on youth. As I said before, what is good for one might not be good for another person to determine what is a youth concern.
Ms. Beck: One of our key asks is for regulatory authority to be placed over advertising and promotions so we can fine-tune it and be guided as the evidence emerges. We do not support lifestyle advertising for e-cigarettes at all, just as we don't see it for tobacco. There is no need for that. I think informational and brand preference advertising will be sufficient to be able to convince smokers to try e-cigarettes and hopefully switch. We don't want to see any brand stretching either.
The bill already includes no tobacco brands on vaper products, and we want to make sure we don't see vaper brands on baseball hats, cellphone cases and that kind of thing. There is no need for it. Smokers will be able to get the information they need through the various promotions and advertising without having it out there. We are not looking to expand the market; we want a targeted market, and those are adult smokers.
The Chair: Thank you. The clerk will hand out the packages to senators. Witnesses, if there are conversations and if people come up to you and want to speak with you, please exit the room as quickly as possible, because we will turn over immediately to the next panel. Thank you, witnesses, very much. You have been very good in responding to all of the questions and have kept things very timely.
We now have our second panel. In this round, we have the Canadian Convenience Stores Association and the National Coalition Against Contraband Tobacco. I will start again in the order listed in my agenda, so I will be inviting the Canadian Convenience Stores Association to begin. We have Satinder Chera, President; and Sébastien Tremblay Drolet, Category Manager, Couche-Tard Inc. Mr. Chera, please begin.
Satinder Chera, President, Canadian Convenience Stores Association: Good evening, and thank you for allowing the Canadian Convenience Stores Association the opportunity to provide our perspective on Bill S-5.
I am the President of the CCSA. I am joined today by Sébastien Tremblay Drolet, who is the Category Manager for tobacco products for Couche-Tard Inc., which is also a company that is a member of our national board.
The CCSA has been an active participant in all consultations surrounding tobacco regulations across the country. As the largest retailer of this legal product, we offer a unique view on the policy changes suggested in this legislation. Prior to outlining these concerns, I want to briefly inform this committee about the overall footprint of the convenience store industry across Canada.
Our stores support Canadians by providing over 227,000 employment opportunities from coast to coast. Along with our regional members, we also support communities through a distributor member network by ensuring that essential consumer products are available in urban, remote and rural locations throughout Canada. Our sector is the face of small business, with over 26,000 retail locations across the country serving over 10 million Canadians each and every day.
I am aware that there are several other retail and distributor groups who had requested the opportunity to speak to you today but were declined. I hope this committee will also pay attention to those submissions as they come in so those voices might also be heard on Bill S-5.
With regard to the proposed bill, our members have real and practical concerns around the proposed requirements for plain packaging of tobacco products. At present there are several important tools available to governments to support public health objectives regarding tobacco consumption. I will ask my colleague Sebastien, as the manager of tobacco category for Canada's largest retail chain, to outline these requirements.
Sébastien Tremblay Drolet, Category manager, Couche-Tard Inc., Canadian Convenience Stores Association: As mentioned, there are a variety of tobacco control regulations currently in place in every region across Canada. These include the following: stringent age-testing requirements to ensure youth do not have access to tobacco products, restrictions on any advertising and promotion of tobacco products, tobacco display bans requiring retailers to hide tobacco products behind flaps and graphic warning labels that presently cover 75 per cent of tobacco product packaging.
The results of these regulations on youth tobacco consumption rates have been positive. A recent Health Canada survey found a decline in both the numbers of students who had ever tried smoking and the number of current smokers.
Mr. Chera: I want to be clear with this committee. Our association and its retail and distributor members strongly support the government's efforts to prevent young people from accessing tobacco products. In fact, we take great pride in our longstanding programming called "We Expect ID,'' which is designed to provide important training tools that will help retailers comply with government-mandated, age-testing requirements.
All of that said, we do not think that the proposed plain packaging requirements will have a demonstrable impact on youth consumption rates. In fact, we think it will have a negative impact on efforts to protect the health and safety of our communities, including the ability of our retail members to carry out these proposed requirements.
We have heard directly from Australian retailers, where plain packaging has already been a reality for several years, that they have struggled with inventory control, staff training and customer transactions.
We are concerned that, with the already thriving counterfeit and contraband market, that will worsen under a plain packaging regime, making it difficult to distinguish between legal and illegal products. In Ontario, which is home to the biggest illegal tobacco market in Canada. at nearly 32 per cent, these concerns are very real.
Mr. Tremblay Drolet: From an operational standpoint, there are challenges that plain packaging will present at each retail location. I would like to share with you the results of a national survey completed by retailers representing 2,000 sites across the country and shared with Health Canada.
In this survey, we found that over 88 per cent of staff use brand logos to differentiate between tobacco products. Nearly 90 per cent of retailers say they will need to change the way their staff differentiate between tobacco products. Eighty-five per cent of staff manually count their stock when ordering tobacco products, relying heavily on visual cues. Ninety-seven per cent of retailers believe that they would need to increase staff training to ensure proper inventory control, stock management and customer service if plain packaging is imposed in Canada. Ninety per cent of retailers say that plain packaging restrictions will increase the time it will take them to order, process and correct the placement of their tobacco stock. Finally, more than half of retailers estimate that plain packaging restrictions will cost them an additional two hours of staff time or more per day per store.
Mr. Chera: With regard to e-cigarette vaping, we applaud the government for proposing a regulated market for e- cigarettes, although we are concerned that the legislation does not clarify or correct a two-tier retail system for e- cigarettes that presently exists in Canada.
In accordance with current Health Canada regulations, convenience stores have refrained from selling e-cigarettes that contain nicotine. Actually, in the packages that have been distributed, we put out a bulletin to our retailers three years ago informing them of Health Canada's ban on this particular product.
At the same time, unlicensed vape shops have been retailing these products for years without retribution. Vape shops are not required to treat e-cigarettes like other tobacco products, including display bans, preventing testing of products on site, and checking for ID when selling these products.
In conclusion, we would like to make the following recommendations to the committee for your consideration: on e- cigarettes, through regulation, ensure that e-cigarettes containing nicotine be sold in the same manner at convenience stores as other retail locations across Canada; require that e-cigarettes be regulated consistently across all tobacco products in both retail locations to minimize the risk that they end up in the hands of young people.
We recommend the following on plain packaging: ensure an element of differentiation which would allow retailers to distinguish products from one another; implement a transition period of no less than 12 months after registration of regulations in order to allow for proper retail training and transition to packaging requirements; work with our industry to help train members, particularly newer Canadians, whose language is other than English and French; implement strong measures to address the illegal tobacco market, which we have highlighted through a contraband map in your kits.
With that, senators, we would be happy to take any questions you might have.
The Chair: Thank you. I will turn to the National Coalition Against Contraband Tobacco and Gary Grant, Spokesperson.
Gary Grant, Spokesperson, National Coalition Against Contraband Tobacco: Thank you, Mr. Chair. I am the national spokesperson for the National Coalition Against Contraband Tobacco, or NCACT. I am a retired 39-year veteran of the Toronto Police Service and the founder and current chair of Toronto Crime Stoppers.
The coalition is an organization dedicated to raising awareness in government and in the public about the dangers of contraband tobacco. Our 18 members represent businesses, organizations and individuals concerned about the growing danger of the contraband trade.
There are many reasons to be concerned. The continued high rate of contraband tobacco in Canada funds organized crime and undermines the effectiveness of existing tobacco control measures. We approach Bill S-5 through that lens.
In particular, I want to highlight how, without additional anti-contraband tobacco measures, a booming contraband trade will be made worse with the plain and standardized packaging regulations introduced in this bill. We believe these risks can be mitigated with some straightforward anti-contraband tobacco measures that have broad support.
About one in three cigarettes purchased in Ontario is illegal. In northern Ontario, it's more than two in three. Quebec has identified a contraband incidence of about 15 per cent. In fact, Ontario has the second worst contraband tobacco problem in the Americas, with volumes somewhere similar to El Salvador. Police are seizing more and more illicit tobacco products heading into Atlantic Canada and the Prairies.
Contraband tobacco is a boon for organized crime, with the Royal Canadian Mounted Police identifying about 175 criminal gangs involved in the trade. They use the proceeds to fund their other illegal activities, including guns, drugs and human smuggling.
The area around Cornwall, Ontario, offers a perfect illustration. Just last week, the Cornwall Regional Task force seized about 600 kilograms of loose contraband tobacco, enough to make more than 1 million cigarettes. In the same report, the task force highlighted how they expect many more seizures as the weather improves. Seizures such as this are all too common and represent only a fraction of the total volume.
The RCMP has identified 50 illegal factories operating in Canada. There are more located in the United States across the border. These factories are not small operations. They use industrial cigarette manufacturing equipment that can produce millions of cigarettes annually, as many as 10,000 a minute.
How does plain packaging affect contraband? Barring real changes that address Canada's contraband tobacco market, the addition of plain packaging will increase the availability of the illegal product. Plain packaging will also create a clear opportunity for illegal manufacturers to move into direct counterfeiting.
In jurisdictions that have adopted plain packaging requirements, like Australia, there has been an increase in contraband tobacco availability. Studies from Australia highlight that contraband tobacco increased by 26 per cent following the introduction of plain packaging.
Canada's domestic illegal cigarette production problem is relatively unique in the developed world, so it is reasonable to expect a similar or worse impact on contraband following the introduction of plain packaging.
The 50 illegal factories in Canada are sophisticated. They have industrial capacity production and access to modern industrial printers that can easily produce authentic-looking packaging. Currently, legal tobacco products have complicated packaging to duplicate.
Plain packaging regulations will literally give the blueprint for replicating the packaging of the legal product, including graphic warning labels, colours, fonts and other necessary materials. Even without the details outlined in regulations, the nature of such designs makes them easy to reverse-engineer effectively in a short period of time.
It would be nearly impossible for consumers to distinguish what is legal versus illegal, and only police with the proper investigative tools could do so. If anything, creating counterfeit products will now become viable, allowing organized crime to strong-arm legitimate retailers into selling illegal product. The current complex packaging prevents this.
It is important to remember that additional restrictions on packaging will have no impact on the existing illegal market. Illegal cigarettes already avoid packaging requirements like health warnings. A visit to any one of the more than 300 smoke shacks that operate in Canada will highlight this, with a plethora of brands and options on open display, a far cry from what is expected in the legal market.
Nothing in Bill S-5 will change this. If anything, it will mean illegal product would have even more opportunities to create the attractive packaging that the government is trying to stop.
All this being said, we understand and share the government's tobacco control efforts. No one should smoke.
To address this challenge, before moving forward with plain packaging, we suggest that new anti-contraband tobacco measures should be introduced. While there is no one silver bullet to eliminate contraband tobacco, starving the illegal manufacturing of cigarette materials is a good step. With Bill S-5, we think there is a real opportunity to do so.
We suggest amending the bill to restrict the importation of acetate tow used to make cigarette filters to licensed cigarette manufacturers. Filters are essential to the manufacturing process and not readily replaced. This would include ready-made filters as well as acetate tow. Acetate tow is produced by only a handful of manufacturers globally in contract with actual loose leaf tobacco, which can be sourced from a variety of locations and smuggled into Canada. You or I couldn't buy commercial qualities of raw tobacco easily but could order shipping containers of acetate tow on the Internet without trouble.
There is broad support for increased licensing of acetate tow from virtually all stakeholders connected to tobacco. This includes health groups such as the Non-Smokers' Rights Association, the Canadian Cancer Society, the Ontario Medical Association and the Heart and Stroke Foundation. The Province of Ontario has been investigating such regulations, but the international nature of its manufacture makes this better addressed by the federal government. There would be negligible cost to the government to implement such a system.
Without other action, the introduction of plain packaging for tobacco products will increase the prevalence of contraband tobacco, and adding measures to restrict acetate tow would help reduce this. Such measures are a good idea regardless of what you think the impact of plain packaging would be.
Reducing contraband tobacco increases the effectiveness of all tobacco control regulations, including all those already in place. I see our proposed amendment as a harm reduction strategy. Thank you.
The Chair: I haven't had that quick of a response in a long time.
Mr. Grant: It coincided with my ending.
Senator Petitclerc: Thank you so much for being here and for your presentation. Before we jump into Bill S-5 in detail, I want to ask both of you a question.
In October 2016, there were articles in La Presse and the National Post that named your two organizations as being used for years by Imperial Tobacco to promote its own interests. This came from a leaked PowerPoint presentation from Imperial Tobacco that describes your two groups as being at least partly, if not largely, funded by the tobacco industry. The PowerPoint clearly asked you to promote fear about contraband.
I find those are very serious accusations, and I thought we should start by giving you the opportunity to clarify this information to the members of the committee and all Canadians that are watching us. What is the nature of your relationship with the tobacco industry?
Mr. Chera: Thank you very much, senator, for that question. I appreciate the opportunity to clarify.
What I would start off by saying is that as an association, contraband concerns have been a long-standing issue for us for many years. Yes, there are a number of groups, including the governments across this country, that are worried about contraband. I don't think we're any different in that regard.
As I mentioned, 26,000 locations across Canada, and many neighbourhood community-minded retail locations, these are community leaders. They have every fear, as governments do, about criminal elements getting involved —
The Chair: She asked you a direct question. Perhaps you could get to her question.
Mr. Chera: Our membership is exclusively driven by retailers and distributors. Those are our voting members. We also have non-voting members, of which the tobacco manufacturers are on that list along with beverage companies, confectionary companies and dairy companies that operate in Canada.
Mr. Grant: I cannot speak to internal memos that were in a private company. I can say that we have 18 members in our coalition. The Canadian Tobacco Manufacturers Council is but one of the members. Toronto Crime Stoppers and the Canadian Customs and Immigration Union are members; and the Ottawa area Crime Stoppers is a member, as well as many others.
I don't take direction from one member and don't have particular input from just one member. We speak to the group before making any decisions.
Senator Petitclerc: One question that has been asked many times over the years by La Presse and National Post, but also from members of the Senate, actually, with no answer — I am hoping to be the one to get the answer — is: How much money do you get from the tobacco industry? It's a simple question. It's been asked many times, and there's been no answer.
Mr. Chera: Senator, when I'm asked that question, whether it's the tobacco manufacturers or our other members — retailers, distributors or confectionary companies — that's confidential information that we do not disclose publicly.
Senator Petitclerc: No luck.
Mr. Grant: I'm a spokesman for the organization. I'm not an administrator with the coalition. I don't know the funding formulas. I do know that I come towards this as a retired police officer with an idea of stopping organized crime, stopping young people from being targeted and starting smoking, and reducing smoking while we're at it.
Senator Seidman: Thank you both for your presentations.
Mr. Grant, you made some alarming statements about contraband tobacco in Ontario especially, but certainly across the country. Could you give us an idea about who purchases contraband tobacco products? How do you know they are contraband? Is there a need to improve enforcement of existing laws that prohibit contraband tobacco products?
Mr. Grant: I definitely think there's a need to improve existing laws. The Ontario government has admitted as much, and the RCMP and the OPP have just started a task force to deal with the growing contraband problem. The RCMP continues to work very hard at it.
We do need more enforcement, such as is taken in Quebec, where all police officers are involved in the fight against contraband tobacco, where ACCES Tabac provides a funding model to continue the fight against tobacco. They've reduced their contraband rate by 50 per cent in the last five or six years. They used to be the same as Ontario, about 15 per cent, which is still enough. They are the best practice to look forward to as far as law enforcement is concerned.
To your question as to who buys contraband, whenever I appear on a talk show, I hear from all the contraband smokers who say it's the government's fault because they charge so much for cigarettes. They don't seem to be swayed by my argument that organized crime is involved.
I will give you one example. I teach at Humber College, and I always ask my students if they know what contraband tobacco is. One of my students told me that the year before, in high school, one of his classmates sold contraband tobacco out of his locker at school and that his parents used it to supplement their income. Dad would go to a smoke shack and buy a truckload of contraband tobacco. He'd go to work and sell it. Mom would sell it from the home, much like the old Tupperware parties, but she'd be selling contraband at home. This young man was selling them out of his locker, which starts a whole new generation of smokers, which we don't want, and teaches kids that it's okay to break the law.
That's how I comment on contraband tobacco. We definitely need to do more.
Senator Seidman: Are there contraband vaping products available, that you're aware of?
Mr. Grant: I really don't know much about vaping.
Senator Eggleton: Both your organizations have indicated a concern about the plain packaging measures and how that might lead to more contraband. Please tell me what the difference is between the packaging now and the packaging as it would be.
I understand, for example, on this one that these warnings are there now, and they would be there, presumably, on the new packaging. My only knowledge about what the difference would be is if the brand is done in a plain typeface as opposed to the logo of the brand.
Mr. Drolet: That's correct.
Senator Eggleton: How can that simple change, from a different stylized logo to just the name "Players,'' for example, make all that much difference?
Mr. Drolet: There are studies on both parts. On our side, in terms of operation and of the package look, it's in the execution, and we don't think that it's going to decline the consumption rate or decline the attractiveness to youth. We think, as a retailer and as CCSA, that it will only lengthen the execution in stores and in the operation, while we are already compliant with the law and the regulations that are currently in place. That's pretty much it.
Mr. Chera: Senator, if can I add two points: One is walking into and visiting retailers. One of the things that occurred to me is that a retailer will never have their back to their customer for safety reasons and for purposes of theft. Currently, the way the packages are constructed, there is a significant amount of differentiation between one brand and another. It's fairly easy for them to pick out which brand the customer wishes to take. Under plain packaging, it's going to become a lot more difficult because everything is going to be standardized so they will spend more time trying to figure out which package the customer is looking for, which means that there is a potential safety consideration here.
The other thing I would mention is that, in terms of plain packaging, there's a reason why the Bank of Canada differentiates different denominations by colour. It's to precisely ensure that there's not counterfeit currency in existence.
That's the position from which we come at it. Not only is it going to have an operational impact, particularly for retailers, but certainly it is going to feed an already growing underground economy, if you will, where you are essentially going to make it easier for criminal elements to copy what is now considered standard and plain.
Mr. Grant: I don't know that there is anything that could be put on a cigarette package that would encourage me to smoke or make me want to smoke. However, if there is evidence produced that plain packaging can curtail smoking, I'd certainly say go for the plain packaging. Just remember that for every action, there's an opposite reaction, and it makes it easier for counterfeiters to make it if it's not as sophisticated a package. The last thing we want to do is say that if you bring in plain packaging, that's fine, but take some steps to board contraband too, because the last thing you want to do is increase the black market at the expense of people stopping smoking.
Senator Stewart Olsen: Thank you, gentlemen, for being here.
For the retailers, Mr. Chera, how much of your business is really the sale of tobacco? Just give us a rough estimate or percentage.
Mr. Chera: Quite honestly, senator, it would vary between really small, independent retailers and larger ones, and rural versus urban. I don't really want to hazard a guess, frankly, on that front. I would say that if that's information that's of interest, we can certainly talk to some of our members and get you some information.
Senator Stewart Olsen: If you would do that, please, do so through the clerk.
Mr. Chera: Yes, we will.
[Translation]
Senator Mégie: Mr. Grant, you said earlier that we could have considered other measures before making the packaging more neutral. Has your coalition already considered implementing other measures before coming up with this neutral packaging?
[English]
Mr. Grant: Do you mean measures to curtail contraband?
[Translation]
Senator Mégie: Yes, for contraband.
[English]
Mr. Grant: Increased enforcement is one. Basically it's been seen as an excise law, and only RCMP and provincial revenue officers in Ontario have been allowed to deal with the problem.
Quebec stopped that. Quebec passed a bill that allowed all police officers to conduct full contraband investigations and the proceeds of crime and ACCES Tabac provided funding to further investigations. As I said, they've reduced their contraband rate over 50 per cent over the last few years, and ACCES Tabac yielded $180 million in revenues for Quebec in 2015 and 2016 — money that would be earmarked for criminals, other than that. So it's a gold standard as far as enforcement is concerned.
But regarding the regulation of acetate tow, which I spoke about, even if we're not talking about the plain packaging issue, I'm always talking about regulating acetate tow. If you can deprive the criminals of the manufacturing material that they need to make contraband cigarettes, if you regulate that, you could help put them out of business.
The other thing I think is important is provincial and federal public awareness campaigns. Most people don't smoke. Most people aren't aware that their children can buy cigarettes from criminals. They can get a baggy of 200 cigarettes for about $9 or $10, the cost of a movie ticket. They think the provincial regulations are keeping their kids safe, but they're not, and organized crime sees this. Organized crime is not stupid. They see this as a cash cow, at low risk and high reward, and they use it to fund their other activities, such as guns, drugs and even some human smuggling.
Concerted enforcement, public awareness campaigns and regulation of materials would go a long way to stop contraband tobacco.
[Translation]
Senator Mégie: Is that really the focus?
[English]
Mr. Grant: Enforcement, we think, but I also think this amendment, if Bill S-5 is passed and the amendment on acetate tow is included, it will also help in the overall cessation and the harm reduction in smoking.
Senator Dean: Mr. Chera, it's good to see you again. I'm going to start by recognizing the important work that your members do in providing services to the public and contributing to the economy in all of our jurisdictions.
You've surfaced two important areas of government regulation, and I think it's important and it's obvious, but one perhaps goes to revenues but both of them actually ultimately go to public health and a serious public health threat.
I absolutely agree that better enforcement and more intelligence-driven, upstream intervention of both the criminal elements and the supply chain of the components of contraband products is important. But we're here today talking about some variations in the law because we're concerned about, essentially, a toxic product with known negative health effects, and that is of concern to all of us. I'm with you that far.
It's when we get to the impact of plain packaging crossing over to and enabling more contraband product that I'm having some difficulty. We know the sophistication of the contraband producers. They are highly sophisticated. They are very well funded. They make a lot of money. I would suspect that their ability to reproduce almost any packaging print with any variation of colours, design and style is probably as efficient and effective as legitimate producers. With digital printing, it's actually not a big deal. We've seen some examples at this committee of digitization.
Is there anything else that can you tell us? I say, for my own part, that I'm unconvinced. You've said lots of interesting and, I think, important stuff about contraband, but I'm unconvinced about the connection between plain packaging and an increase in the contraband piece. Certainly I'm not convinced by the ability to print and vary printing packaging.
Mr. Chera: Thank you, Senator Dean. I guess, from our perspective, making it any easier for criminal elements to replicate packages is a step in the wrong direction. We don't disagree with the government's overall objectives with this legislation. Our concern is the extent it is going to have an impact on the ability of our retailers to do their jobs within the law and to be able to differentiate between legal and illegal products.
In talking to law enforcement across the country, we know that contraband is already a problem. We feel it is very difficult to understand how it's not going to make the problem even worse by having a package that now is going to be much more easily replicated by criminal elements. We know, for example, from some of the reports that have come out of Australia, that there is a contraband problem that now exists there. Contraband really never existed prior to plain packaging taking hold in Australia.
I don't disagree with the overall objectives. We're coming at it from the operational impact that it's going to have, so as to ensure that there will be some sort of differentiator between the different packages so that retailers know which product is which when they're selling it to their customers but it also doesn't unduly feed an illegal market that we know is already a problem, and even Health Canada has acknowledged in its most recent consultation reports or documents that it exists.
Mr. Grant: I want to reiterate that we don't disagree with the plain packaging bill, but we do think that there's a possibility that criminals will take advantage of it, that they will be able to manufacture cigarettes. A lot of people speak to me right now that are smoking contraband cigarettes and they swear they are legal. "Look at this. It has a health warning on it.'' If it's easier to trick people, it will lead to confusion in the marketplace and more people may be tending to just go for price range.
I have a concern as well that enterprising criminals will start delivering these counterfeit packages that are easy to replicate to actual convenience stores and convince an owner that, "Why not sell these and we'll split the difference?''
I think there is a concern that it could lead to more contraband problems. If you want to eliminate contraband problems, let's eliminate contraband.
Senator Frum: My question was the same as Senator Dean's. At the risk of boring you all, I will reiterate it.
I'm still not convinced either because I'm still failing to understand what it is that a branded package would have that would make it more foolproof from a law enforcement point of view than a plain package. Is it a hologram? What is this key difference between plain packaging and branded packaging that makes one more foolproof than the other?
Mr. Grant: I think it would be simpler to replicate. Once again, I'm saying there's nothing wrong with plain packaging per se. If plain packaging becomes a law, hopefully it will reduce smoking.
I'm suggesting that while we're looking at reducing the harm of cigarettes, let's take a stab at contraband tobacco as well, so that if there's anyone that does decide to go to contraband because of confusion in the marketplace or a price point or anything else, that we make it more difficult not just to replicate the packages but we make it more difficult to make the cigarettes themselves.
Senator Frum: Part of the contraband tobacco problem would be also exporting from Canada to other jurisdictions. Plain packaging helps guard against that. If you have packaging that's unique to Canada, then exporting contraband becomes difficult because the product won't translate across the border.
Mr. Grant: I haven't seen a huge problem with exporting contraband products. It's pretty much a problem right in our own provinces.
Senator Frum: I noted that you said Ontario produced the largest amount in the Americas.
Mr. Grant: And smokes the largest amount in Canada.
Senator Frum: We consume our own contraband, all of it?
Mr. Grant. We do. One out of every three cigarettes purchased in Ontario is contraband.
Senator Petitclerc: My question is for the Canadian Convenience Stores Association.
Before the question, I do want to point out, Mr. Chera, that in your answer to Senator Dean, when you talked about the Australian contraband challenges that went up with plain packaging, you forgot to mention that when they put in the plain packaging they also increased the tax by over 25 per cent, if I'm right. So that could also be an explanation for contraband and not necessarily plain packaging.
You mentioned your concern for your staff in terms of product handling and transaction time and even security. Again, you did mention Australia. I do have another Australian study, and the study that I had access to — and I was in very close contact with Australia during that bill — did review 1,265 package retrievals before and after plain packaging implementation, and they only found a small and temporary increase in retrieval time. That lasted for not even weeks.
My question is: Are we not as competent or are we not as able to adapt to that kind of a transition? Why would it be different here than it was in Australia?
Mr. Chera: I appreciate the opportunity to respond to that. I guess what I would say, senator, is that we've surveyed our members on what the potential impact could be for them by going to a plain packaging regime. They've provided their feedback.
Our main point here is that if the government is going to proceed in this direction, then there should be a strong differentiator between the different packages based on the feedback that we've received for our members.
Don't forget, these are retailers. They are on the front lines of selling legal tobacco products that are taxed by governments across the country. They have every concern that you would have in terms of ensuring that it not fall into young hands or illegal elements get involved.
What I would suggest is that from our perspective, having talked to our members, having gotten their feedback, and certainly my colleague can speak to the impact it has on his company, this is the feedback that we've received. Right now there is a differentiator that makes it much easier to not turn your back to your customer, to be able to quickly retrieve the product and hand it over. You can certainly imagine, for a very small independent chain or stand-alone, where it's a husband and wife working, that they are going to require time to adjust to a new regime. We do think that should be taken into consideration because I do think that operational impact on retailers continues to be forgotten.
With respect to the studies out of Australia, I probably have another three here that I can raise as well. If it's helpful for the committee, I can certainly share where we have received that information and sourced that information appropriately because it does seem that there are a number of studies out there. We have, in our hands, one from the National Drug Strategy Household Survey in Australia and one from KPMG. So again, if that would be helpful to the committee, we'd be more than happy to furnish it.
The Chair: I'm going to come in on this because you stated flatly, just a few minutes ago, in answer to a question, that prior to plain packaging in Australia, there was no counterfeit tobacco in Australia.
The KPMG report that you have just referred to, in answer to Senator Peticlerc, clearly demonstrated — and it's a report widely cited by the tobacco industry in support of the claim you just made — but in actual fact, KPMG has come out and declared that it is disappointed with the misinterpretations being placed on its report, and that it found that the level of counterfeit cigarettes in Australia in 2015, at 2.4 million kilograms, was the same as in 2010, prior to plain packaging. They go on at length. You can provide us with a lot of reports, and I think we probably have them all, but that's one you specifically referred to. So I think we should clarify the record.
Senator Seidman: Mr. Grant, if I might go back to your recommendation about an amendment to this bill with regard to acetate tow.
You say in your presentation that it has broad-based support from virtually all the stakeholders connected to tobacco, meaning Non-Smokers' Rights Association, Canadian Cancer Society, Ontario Medical Association and the Heart and Stroke Foundation. Could you explain what the point of this kind of an amendment would be and what impact it would have? How would we go about doing it?
Mr. Grant: I see this bill as a harm reduction bill, a bill to encourage a reduction in smoking. What better way to encourage a reduction in smoking than to tackle the huge contraband problem as well? Those cigarettes are just as harmful as other cigarettes we are talking about. If one in three Ontarians are smoking them, that is a lot of problems, especially for young people.
The acetate tow is a material that is not widely available. Only a few companies in the world make it. It is used in the manufacturing of the filters. Right now, as I indicated, I could go online and buy acetate tow because there is no trail to follow it. But, if it were regulated and if our amendment that is in here, "No person shall import acetate tow unless the person is a tobacco licensee or otherwise approved by Governor in Council,'' passed, if there were a trail of the acetate tow and it was not going into places that have absolutely no right to be manufacturing cigarettes and wasn't allowed to go in there and was being seized, it would definitely mitigate the ability of the counterfeiters to make the cigarettes, which, hopefully, would result in some of the goals that this bill is seeking — harm reduction and stopping people from smoking.
Senator Seidman: It is correct, as I believe you said in your presentation, that this amendment has the support of most of the stakeholders?
Mr. Grant: I have information that I read that comments on the Ontario Campaign for Action on Tobacco from the Ontario Standing Committee on Finance and Economic Affairs, January 29, 2015, that there was broad-based support for the possible regulation of acetate tow. The NSRA quoted François Damphousse in the National Post in 2010. The groups that were at these meetings were the Canadian Cancer Society, the Ontario Medical Association and the Heart and Stroke Foundation. I understand that they may be appearing before you at a later time. Hopefully, they would concur with this. Anything that stops people from making cigarettes is a good thing.
Senator Eggleton: Let me ask Mr. Grant. He does have a long, distinguished career with the Toronto Police Service. I have known him for a number of years, particularly with the Crime Stoppers project.
Aside from the plain packaging — I think we have talked that one through; and now you have mentioned acetate tow — what other measures do you think we should be looking at in terms of trying to cut down on contraband?
Mr. Grant: We should be looking at increased enforcement, particularly in Ontario where the provincial government has been making some steps toward interdicting the contraband problem. They are regulating loose-leaf tobacco. They have just introduced a seven-person OPP task force to deal with the contraband issue. It is a start. Seven people in a province like Ontario are not a lot.
As far as the enforcement is concerned, we should look at the Quebec model, Bill 59 that was introduced in Quebec. I think it was in 2010. They used to have the same rate of contraband problems as we do in Ontario. They decided to give the authority to all police officers in the province — municipal, provincial and RCMP, of course — to deal with full contraband investigations instead of leaving it. In Ontario, it's Ontario finance officers because it is seen as a financial crime, a tax crime, and the RCMP. In Ontario, basically, most of the police team is on the bench; they are not dealing with it. If the Quebec-style legislation were introduced, which is an easy thing to do, all police officers would have the right to conduct full contraband investigators, from seizure to preparing the court case to seeing it through court.
The Quebec model also introduced a government agency called ACCES Tabac, which funds continuing contraband investigations at a time of shrinking resources for police, budgetary and human resources. Some of the proceeds of the contraband convictions are also used toward funding further investigations. The proof is in the pudding. They have reduced their contraband rate by 50 per cent. It is still bad enough at 15 per cent, but that is a huge drop from 1 in 3. Last year, ACCES Tabac, the organization that handles the funding, yielded $180 million in revenues in Quebec from, I guess, legitimate cigarette sales as opposed to going to the pockets of criminals. Increased enforcement will make a big dent in contraband.
As to other things, like the legislation I am proposing with the acetate tow that makes it harder to manufacture, if criminals can't get their hands on the material to make the cigarettes — it is easy enough for them to get tobacco. It is free flowing across the border, but the acetate tow is harder to get. If we could reduce the amount of acetate tow that is available and see where it's going, then that would certainly put a wrench in their business.
As I mentioned, I think that a public awareness campaign, at the federal and provincial levels, is very important. Most people do not smoke. I think we're at about 20 per cent smokers in Canada. I might be a few percentage points off. Most parents think that their kids can't get cigarettes. They think that the legislation that makes sure that the convenience people ask for ID and that they don't see the cigarettes and whatnot prevents their children from having cigarettes and buying them. But we know that these criminals will sell cigarettes to kids, a baggy of 200 cigarettes for the cost of a movie ticket, $10 or $12. It starts a new generation of smokers, and it teaches kids that it's okay to break the law. And by the way, would you like a little Ecstasy on the weekend with these cigarettes that you're buying? When organized crime comes into a community, it's bad news.
So I think a public awareness campaign and negotiations between all levels of government. I have noticed, in my five or six years of doing this now, which, I guess, is no surprise to people, that, not only intergovernmentally but interdepartmentally, sometimes the communications aren't as strong as they could be. I think you really need to have a task force, if you will, of federal, provincial and First Nations people getting involved to try to tackle the contraband problem and the problems that it is causing in our communities.
Senator Dean: Just as a quick follow up on this acetate product, can we presume that, given the quantities you are talking about and we know in terms of the volume of contraband manufacture, following the supply of that ingredient would take you to the contraband sites?
Mr. Grant: We know where the sites are. I think what happens is that the product won't get to the sites, so they are starved of their materials for making the cigarettes.
Senator Dean: Okay. I understand the answer.
Senator Petitclerc: A very quick question for you, Mr. Grant: I was interested because you are linking contraband with organized crime. That is exactly what I heard in my office from the RCMP and the different people fighting the fight. One of the questions I had for them is: Can we link plain packaging with a rise in contraband, or what can we link contraband with? They told me — and they were confident in telling me — that the only thing they know for sure is if the price is higher. That is the only historical link they could make for me. I want to know your opinion on that and why you might think differently, because you seem to think that plain packaging could be a factor.
Mr. Grant: On plain packaging, I am not against it. It could be effective, but I think it could also confuse people. I look at it as an opportunity. Instead of just limiting this bill to plain packaging as an attempt to mitigate smoking, let's tackle some of the materials that are producing cigarettes and see if we can mitigate the contraband as well, in case there is a correlation.
Senator Seidman: Mr. Chera, since I haven't asked you a question until now, I didn't hear if you had any suggestions for amendments to this bill. Do you? If so, what would they be?
Mr. Chera: The one area I mentioned at the outset was around e-cigarettes. It was not clear to us that this legislation would remove the two-tier system we have currently where you have these illegal vape shops popping up for years, whereas convenience stores have been abiding by the rules. Post implementation of this legislation, will both be operating under the same rules, or are vape shops now going to get a free pass under this legislation for all the years that they basically ignored Health Canada's warnings on this whereas our convenience retailers have abided by the rules? We were not certain whether or not the legislation was clear on that front. To the extent that there is some clarity on that particular issue, that would be incredibly helpful.
In terms of the differentiator factor — and perhaps this is more for down the road — it's important to make sure there is a strong differentiation between the different products so it is easier for retailers to determine which products consumers are looking for.
The Chair: We certainly have had a full discussion today, Mr. Grant. I have also had the opportunity to hear you on this issue in a previous case, and I found some of the ways in which cigarettes traverse the St. Lawrence River to be fascinating — and some of the suppliers are fascinating as well. I didn't want to get into that today, but I always enjoy your testimony in this area. I want to thank you, Mr. Chera and Mr. Tremblay Drolet, for being here as well today.
I also want to thank my colleagues for the efficiency of your questions and the way you have put them. I hope you will continue that because we will have a fascinating series of meetings on this and I will need to have your help in that regard.
With that, I declare the meeting adjourned.
(The committee adjourned.)