Proceedings of the Standing Senate Committee on
Science and Technology
Issue 11 - Evidence
OTTAWA, Tuesday, October 1, 1996
The Standing Senate Committee on Social Affairs, Science and Technology, to
which was referred Bill S-5, to restrict the manufacture, sale, importation and
labelling of tobacco products, met this day at 10: 00 a.m. to give
consideration to the bill.
Senator Mabel M. DeWare (Chair) in the Chair.
The Chair: I wish to welcome you all here this morning as we start our
deliberations on Bill S-5.
On a matter of information, you did not receive a summary from the library for
this particular bill for one reason: When the summary came out in June, Senator
Haidasz indicated to the steering committee that he was a little concerned
about the library summary and asked that we not refer it to the committee until
he had discussed it with the people who had written the summary. We thought
that during the summer he would get around to that, but because of business,
holidays and other things on the agenda that did not happen. At this point, he
is still deliberating with them, but if this morning, any of you would like to
see it there is no reason why you cannot.
The first witness thismorning is Dr. Rickert, President of Labstat Incorporated.
I will now turn the floor over to you, sir, and welcome.
Dr. Bill Rickert, President, Labstat Inc.: I wish to express my appreciation to
the committee for inviting me to appear and to comment on Bill S-5.
A few weeks ago I was in Central America. I had occasion to pick up a package of
cigarettes, and this particular package of cigarettes is obviously designed for
children. It has a picture of a clown on it. The cigarettes inside the package
contain papers which are flavoured. I wanted to show you them to illustrate
what happens in an environment in which there is absolutely no regulation.
I certainly agree with the purposes of the bill, which I understand to be to
protect the health of Canadian smokers, to decrease the number of new smokers
by reducing the nicotine content of tobacco smoke, and to enhance the public
awareness of the hazards of tobacco usage by ensuring effective communication
of pertinent information. However, in my opinion, Bill S-5 as written will not
accomplish these goals and may in fact contribute to the public health problem
that the author was trying to address.
It is clear that reductions of tar, which occurred when cigarette filters were
introduced, had a beneficial effect with respect to the risk of lung cancer.
This benefit has been estimated to be 25 per cent, for a 15 milligram decrease
in tar. Thus a policy of encouraging further reductions or placing limits on
tar would seem to make good public health sense. However, the tar content of
cigarette smoke is related to the nicotine content, so that a policy of tar
reduction is also one of nicotine reduction, which may not make good public
Nicotine is the primary reinforcer of the smoking habit. A typical nicotine
dependent smoker requires about 20 milligrams of nicotine a day from around 20
cigarettes. This means that one cigarette must easily provide the user with
from 0.7 to 1.4 milligrams of nicotine, which may be one reason why the
nicotine delivery of one of Canada's most popular brands of cigarettes has not
declined below this level.
In 1968, when we began testing cigarettes, nicotine delivery of Player's Regular
Size Filter was approximately 1.9 milligrams. This declined to about 1.4
milligrams in the mid-1980s and has remained stuck at that level ever since.
There has been very little change with respect to the nicotine delivery or the
tar delivery of cigarettes for the last ten years.
When the tar and nicotine levels are reduced below the acceptable limit, smokers
tend to compensate by smoking their cigarettes more intensively in order to
increase the amount of available nicotine. This is because nicotine is the
habituating factor in cigarettes, and a smoker will obtain whatever amount of
nicotine they feel is necessary for them, regardless of what the number happens
to say on the package. Maximum over-smoking or compensation appears to occur
when the machine-measured levels of nicotine are about 0.3 milligrams, which
coincidentally is the maximum proposed under Bill S-5. This is the reason why
Player's Regular Size Filter delivers about 1.4 milligrams. There is no
over-smoking, it is acceptable as far as cigarette smokers are concerned.
When you smoke cigarettes more intensively, it means that the relationships
which are valid when the machine tests cigarettes no longer apply. One of the
most important of these is the tar/nicotine ratio, which can be regarded as the
ratio between the compounds related to disease, that is compounds found in tar,
and the drug, which is related to satisfaction. In a harm reduction strategy it
would be important to have the situation in which the drug is delivered with the
minimum amount of harm. Changing the tar/nicotine ratio to increase the amount
of tar, in effect, increases the amount of harm while reducing the amount of
available drug. The current bill, which specifies a tar content of 0.1
milligram and a nicotine content of 0.3 would give you a ratio of about 3 to 1,
which in theory looks desirable. You will notice from this curve that the ratio
from 3 to 1 never occurs under normal conditions. Under standard smoking
machine conditions the ratio is something like ten.
Senator Bosa: Can you point out on the screen that 3 to 1 ratio?
Mr. Rickert: This is the ratio here, 1, 2, 3, 4, 5. Here, this is 3. This
corresponds to approximately 200 millilitres of smoke from a cigarette. When
cigarettes are tested under standard conditions, 350 millilitres is the minimum
that is ever taken from a cigarette. There would have to be major changes in
design of cigarettes in order to obtain the ratio proposed under the bill. It
may not be technologically feasible, I do not know.
In a world where people continue to smoke, it would be desirable to have this
ratio as low as possible. However, as I have said, under intensive smoking
conditions that ratio increases from that determined under standard smoking
machine conditions. The result is a higher exposure of the peripheral lung to
carcinogens and may explain the greater increase of adenocarcinoma over
squamous cell carcinoma in the bronchi. When lung cancer among smokers was
firstlooked at many years ago, it was observed that squamous cell carcinoma, a
carcinoma which affects mainly the large bronchi, predominated over
adenocarcinoma at a ratio of about 16 to 1. Presently that ratio is approaching
1 to 1.
Adenocarcinoma occurs in the periphery of the lung, and it indicates that
tobacco smoke is being inhaled more deeply into the lung. This has been used as
an example of what happens when you encourage the development of low nicotine
cigarettes. What you encourage is the deeper inhalation of the cigarette smoke
into the lungs with a proportionate increase in adenocarcinoma in contrast to
squamous cell carcinoma. It may also provide an explanation for the recent
finding from the American Health Foundation ,that there is no longer a
difference in lung cancer risk among smokers of filter cigarettes and smokers
of non-filter cigarettes. This means that initially when we said there was a 25
per cent decrease in risk for a 15 milligram decrease in tar, this is no longer
valid. When you look at current lung cancer among smokers of current filter
cigarettes, the risk is increasing, and the possible explanation for that is
the promotion of the low tar, low nicotine cigarette. That is one of the
reasons for my statement that setting a limit of 0.1 milligram for tar and 0.3
milligrams for nicotine when measured in accordance with the standard testing
methods could do more harm than good.
Another reason has to do with the standard test method itself. If the amount of
toxic chemicals to which smokers are or might be exposed is the issue then
setting a limit for the amount to which machines are exposed does not make too
much sense, unless people smoke like machines. Clearly, this is not the case.
People do not smoke like machines and the amount of tobacco smoke inhaled by
individual smokers is highly variable.
The conditions to be used for cigarette testing according to Bill S-5 are ISO.
These conditions are illustrated in the blue section on the far left. The
conditions as specified in the bill are, not laid out, but when it says "ISO"
it means the puff volume is 35 millilitres, that the interval between puffs is
60 seconds and that the vents -- and I will deal with the issue of vents
separately because I think it is important -- are left open. This means that
the volume of smoke which the machine inhales is 350 millilitres. Based on 41
studies of human smoking behaviour and the report of the U.S. Surgeon General,
reasonable estimates for human smoking behaviour would be an average puff volume
of 44 millilitres, not 35, an interval of 26 seconds, not 60, which would
result in a total volume taken from the cigarette of 880 millilitres, or about
two times what the machine takes.
If we move to more intensive conditions, human smoking behaviour approaching the
upper limits would be 55 millilitres every 26 seconds, which means that the
smoker would obtain 1200 millilitres from a cigarette. The smoking machine only
obtains 350 millilitres. The smoking machine estimate, as it is proposed under
Bill S-5, provides the minimum estimate for exposure. More realistic estimates
would be average or maximum. That translates into differences between what would
be on the package and what the smoker would get. For example, in yellow there
are three cigarettes which would be classified 1.0 milligram, the 1.0 milligram
cigarette which is proposed under the bill. Under moderate conditions some of
these cigarettes would become 2.0 milligrams. Under more intensive conditions
some of these cigarettes could become five milligrams of tar.
As a matter of fact, in the research which we have done, it is possible for a
1.0 milligram cigarette in the hands of a smoker to become a 28 milligram
cigarette. Once again, the numbers that are proposed, or the method of testing
proposed under the bill, would provide a minimum in terms of what smokers might
get from the cigarette.
From a health protection standpoint, it would seem more logical to determine and
publish values based on either the average or, preferably, the maximum which
has been observed in studies of human smoking behaviour. As I said, Bill S-5
Changing the test system is of particular importance given that many Canadian
smokers believe the numbers are absolute. In a 1988 study the attitudes of
smokers in Canadawere investigated using Kitchener-Waterloo as the sample area.
One of the questions that they were asked is as follows: "Is it possible
to inhale more than 10 milligrams from each cigarette or does this represent the
most that you can inhale with this brand?"As shown in this table, about 50
per cent of those surveyed believed that the published number for tar
represented the maximum that they could inhale from a cigarette. I have just
shown you that in actual fact the number represents the minimum.
In order to reduce deliveries, many cigarettes have a series of air dilution
vents around the filter as close as 9.0 millimetres from the end. In extreme
cases there may be 10 to 12 of these. Studies have suggested that as many as 50
per cent of smokers either purposely or unintentionally block some or all of
these vents during smoking, resulting in dramatic increases in tar yields.
This is the cigarette represented there. There are 12 rows of vents around this
cigarette. If I put this cigarette in my hand like this, I cannot avoid
covering those holes; it is absolutely impossible. The rule for machines is
that you put the cigarette in the holder so as to not block the holes. The
machine number will be 1.0 milligram, for example. When I as a smoker smoke
this cigarette, it is not likely thatI will get 1.0 milligram. My dose from
this cigarette will be anywhere between 1.0 and 28 milligrams. By continuing to
use the current standard method of testing we reinforce this fallacy, and I
believe it is a mistake.
The bill also deals with the issue of additives. A number of additives have been
proposed as potential tobacco substitutes, diluting the original material to
produce a cigarette which is less toxic. Cytrel is one example which reduced
tar deliveries. Cytrel produces tar. Cytrel also produces carbon monoxide. The
bill, as written, would prohibit the addition of anything which on combustion
would produce substances which are detrimental to health. Carbon monoxide is
detrimental to health. However, with a traditional tobacco cigarette, 100 per
cent, mixed with Cytrel, the net result is a cigarette with reduced tar and
carbon monoxide yields. The bill would prohibit the use of such materials.
For the past ten years or more the RJ Reynolds Company has been developing
cigarettes which primarily heat rather than burn tobacco. This change from
burning to heating results in a smoke which is chemically and biologically less
toxic. The latest example of this type of cigarette is Eclipse. This cigarette
is virtually 100 per cent reconstituted tobacco. This cigarette would be
prohibited under Bill S-5. The cigarette would be banned. It contains
approximately 700 milligrams of this type of tobacco. When the cigarette is
lit, the lighting process burns a bit of tobacco. The heated aerosol passes
over the tobacco delivering basically nicotine and glycerol to the smoker.
This cigarette delivers almost no hydrogen cyanide, benzopyrene, almost none of
those chemicals which are toxic and are associated with disease processes. Bill
S-5 would ban this cigarette in Canada. Given that this product has the
potential to reduce significantly the risk of cancer in smokers, it would be
rather premature in my opinion to ban its import or sale in Canada.
It should also be recognized that the presence of heavy reconstituted tobacco in
Canadian cigarettes is not necessarily something to be discouraged. There are a
number of techniques for the production of reconstituted tobacco, some of which
result in a product with reduced biological activity. Consequently, under
certain conditions, the use of significant amounts of reconstituted tobacco may
be desirable and should not in my opinion be limited to two per cent of the
weight of the cigarette.
In summary, I feel that Bill S-5 as written will not help to protect the health
of Canadian smokers for the following reasons: Current smoking machine
standards do not take into account the adjustments which many smokers make when
forced to smoke low nicotine cigarettes. Consequently, in the hands of smokers,
the tar dose delivered from the proposedtar 0.3 milligrams nicotine cigarette
may equal or exceed that of brands currently on the market. Two, the volume of
smoke collected for analysis under the conditions proposed in Bill S-5 is less
than the average inhaled by smokers and considerably less than the maximum.
From a health protection standpoint the use of the maximum rather than the
minimum would make more sense when setting standards. This would involve
restating smoking machine parameters to include such things as potential hole
blocking. Third, under certain conditions the use of reconstituted tobacco may
result in a cigarette with reduced chemical and biological activity. To limit
its usage may delay or prevent significant advances in reducing the harm caused
It has been suggested that if nicotine is addictive let us remove it. By
removing nicotine of course you are left with all of the other products of
combustion -- hydrocyanide, acolyn, phenol, formaldehyde, and the list goes on.
Such a cigarette was tried in the United States; the "Next" cigarette.
Phillip Morris removed the nicotine from the tobacco, and the cigarette was
found to be acceptable from a taste standpoint for many smokers, but "Next"
was a $350 million market failure. It was a market failure because it had no
nicotine, and people do smoke for nicotine. How much nicotine to the smoker
would be permissible? It has been suggested that .15 milligrams of nicotine
delivery per cigarette would be permissible.
It is important to understand the meaning of that .15 milligrams. The value of
.15 milligrams proposed by Benowitz and Henningfield is a maximum which takes
into account two things; the amount of nicotine in the tobacco and how the
cigarette might be used, which is entirely different than the proposed maximum
in this bill. The proposed maximum in this bill of 0.3 milligrams says nothing
about the amount of nicotine which is in the reservoir. The reservoir is the
tobacco. If nicotine is still left in the tobacco, it is still available for
the smoker, regardless of what the smoking machine says.
The reservoir in Canadian cigarette tobacco is considerable and that reservoir
has been increasing. In 1979, on the average, 18 per cent of the nicotine went
from the tobacco into the tobacco smoke under standard conditions. Today that
average is 13 per cent. The reservoir is getting larger, which means that it is
possible and easier to obtain the larger dose of nicotine from current
In summary, I feel that the aspect of Bill S-5 which deals with initiation
should be re-evaluated for the following reasons: The proposed limit of 0.3
milligrams of nicotine in tobacco smoke, as determined by standard ISO
methodology -- and that is where I think the problem lies -- will not prevent
novice smokers from receiving a habituating dose of nicotine.
It has been reported that maximum over-smoking occurs when smokers are forced to
smoke cigarettes where the machine determined nicotine is 0.3 milligrams. Over
smoking cigarettes negates any potential benefit of reduced yields and may
increase risk beyond those associated with typical cigarettes. If the amount of
nicotine is to be regulated, then it would make good sense to set levels based
on what is in cigarette tobacco as well as how the cigarette might be smoked.
This avoids the reservoir effect and places a true limit on the amount of
As I said at the beginning, the bill basically has three aspects: protect,
decrease the number of new smokers and enhance public awareness. I would like
to spend the last few minutes dealing with the issue of public awareness. It is
extremely important to realize the significance of the numbers. People pay
attention to numbers. For example, in Japan, the first 0.1 milligram cigarette
was introduced in 1988, and tar and nicotine deliveries were required on
packages in 1990. This resulted because as a result of promotion by tobacco
companies, the marketing arm of tobacco companies, tar awareness increased
among Japanese smokers. Sales of cigarettes with one to 6.0 milligrams of tar
now account for 36 to 37 per cent of the market share, so it is clear that the
numbers are used to market cigarettes. What is not clear to most smokers is the
meaning of those numbers, and, in my opinion, perpetuating the existing system
would not solve the problem.
Fundamentally, smokers inhale variable amounts of smoke from their cigarettes,
which the current method now ignores, as I have mentioned many times. A simple
solution to the problem was proposed in 1986 when we recommended that values be
based on per litre of smoke, because cigarettes do not contain tar. Yet in
clause 5(b) of the bill, the clause dealing with labelling, it says:
(b) the content, by weight in milligrams per gram of the tobacco product
excluding paper or filter material, ofcancer-causing tars expressed as "cancer-causing
The bill actually says that cigarettes contain tar. Cigarettes do not contain
tar; tobacco smoke contains tar. Although that seems obvious to all of us, that
distinction is extremely important.
Senator Bosa: This is highly technical language that you are using and some of
us need a little bit of clarification. You said just now that cigarettes do not
contain tar but smoke does. What is the difference between a cigarette and
Mr. Rickert: The only thing contained in the cigarette is the cigarette tobacco.
In order to get tar you have to burn tobacco. If you do not burn the tobacco
there is no tar, so by definition cigarettes do not contain tar.
As I pointed out earlier, 50 per cent of people believe that cigarettes contain
tar, and that is a gross misconception which must be changed. One of my major
concerns about this bill is that it fosters the misconception. It carries this
misconception forward. I have been saying for many years that this bothers me
greatly, and I have been trying to think of other ways of dealing with the
problem. One way to deal with it is to talk in terms of litres of smoke,
because what you consume as a consumer is smoke. You do not consume the
cigarette. You do not chew the tobacco. You consume the smoke. So it would seem
logical to me that if you must talk about numbers you should talk about the
smoke, not the cigarette. What you should be doing or thinking about doing is
expressing the numbers based on per litre of smoke, because, as it turns out,
the average smoker takes in up to one litre. When talking about litres you are
talking about what many smokers get from their cigarettes, and that has another
Does that help?
Senator Bosa: Yes, it is clearer now.
Mr. Rickert: Please stop me because, as you pointed out, some audiences are more
technical than other audiences. I want to make sure that what I am saying is
clear because I think it is important.
Senator Bosa: Maybe it is clear to the other members of the committee.
Senator Lavoie-Roux: No, it is not.
Mr. Rickert: Let me go to the next point, which I think will make things
We talked about tar. These pads have tar. What happens is that the cigarette is
smoked, the smoke comes through the filter and the tar is collected on pads.
This is a pad with no tar. This is a pad upon which 19 milligrams of tar have
been deposited. The difference in weight between this pad and this pad
represents the amount of tar. That is as simple a measurement as you can get.
Everyone knows, and I hope that this part is reasonably clear, what tobacco
looks like. Everyone is familiar with the stain, the colour. I want to use this
as a scale of measurement for tar. Let us forget about the numbers. Let us just
look at the colour.
What I am about to say will be a little technical, but I will move right on into
the nontechnical area. This slide shows that you can take colour and break it
down into three bits; one of which is the lightness and darkness, how intense
it is. One way of getting around the current difficulty is to put on packages
of cigarettes little colour spots which correspond to a certain amount of tar.
This colour is 4.0 milligrams, this colour is 1.0 milligrams. Smokers who wish
to know whether their cigarettes are 1.0 milligram cigarettes or 28 milligram
cigarettes, will simply have to move a cigarette filter along the scale and
One of the big problems with trying to cut down on smoking is that there is no
scale. Imagine a situation where you are trying to reduce your weight and you
have no way of measuring it. This is a way of measuring it, and I think this
sort of system gets around the difficulty of reliance on numbers. If you want
to know, you look at the end of the filter and measure it against the scale.
Is that one reasonably clear?
Senator Bonnell: It is not very scientific though.
Mr. Rickert: It is very scientific. I have skipped the science part of it. I
have been working on this for eight years. This is not a new idea.
Senator Bonnell: You had better go back and work at it some more,because you do
not have it right yet.
Senator Forest: Supposing that system were adopted, you would still have to
depend on the cigarette companies to the numbers on the package correctly.
Mr. Rickert: Yes, but we depend on the cigarette companies to do that now.
Senator Forest: I understand that. I am just pointing that out.
Senator Bonnell: Did you not tell us earlier that if you smoke shallow you get
adenocarcinoma of the big bronchus, and if you smoke deeper, you get
adenocarcinoma of the small bronchus because the tar gets down deeper?Did you
tell us that?
Mr. Rickert: Yes, I did, and I said that the reason for that is because the
nicotine level was so low that this encouraged deeper inhalation. It is not a
product of the tar itself, it is because of the nicotine.
Senator Bonnell: Did you not also tell us that this tar gets down into the
bronchus and causes the irritation which causes adenocarcinoma, that if you
inhaled that smoke and blew it out through your handkerchief you would see a
brown stain on the handkerchief and that, while some of the tar would be left
on your handkerchief when you blew the smoke through it, some of it would stay
down in the bronchus, or down in the deep bronchus?If so, then the measurement
you have there is very inaccurate.
Mr. Rickert: The current system of measuring or of expressing numbers is worse
Senator Bonnell: They are both inaccurate.
Mr. Rickert: This system purports to do one thing, and one thing only, to
express mouth level exposure. That is all, how much goes into your mouth. The
system does not do any of the things that you are talking about. I do not know
a system of measurement that could be given to the public that would do what
you are talking about.
Senator Bonnell: In the next two years you will come to that answer.
The Chair: Doctor, this is a mouth level of exposure?
Mr. Rickert: Mouth level of exposure, that is correct.
The Chair: The scale would be the same on every package, and it would be up to
the person who is smoking to detect for himself what level he is at, right?
Mr. Rickert: Yes.
The Chair: That is your point?
Mr. Rickert: That is my point. The thing is that if the cigarette says 1.0
milligram and they bought it because it is 1.0 milligram, it would be nice to
know if it really is at that level in terms of mouth level exposure. I take
Senator Forest: If it were a 1.0 milligram exposure and they smoked three times
as many cigarettes, it would be the same as smoking one cigarette at the higher
level; is that correct?
Mr. Rickert: The compensation which takes place, the over-smoking, which we have
talked about, takes two forms: one is smoking more intensely and the other is
smoking more cigarettes. In all of the studies I know about, the
smoking-more-cigarettes form of compensation tends to be not more than about 15
per cent. It occurs but it does not go to the sorts of numbers which you are
talking about. In other words, a one-pack-a-day smoker does not suddenly smoke
Senator Bonnell: No, but he does it over a period of time. He starts out smoking
one or two cigarettes a day and before too long he is at seven a day. The next
thing you know is that he is at a pack a day, and then two packs a day, trying
to get that satisfaction from the nicotine.
Mr. Rickert: It is very surprising how constant the dosage is regardless of the
number. We have looked at many ourselves. We have conducted brand switching
studies in which we have taken people from one brand to another brand.
Surprisingly the amount of nicotine-related substances in the blood stays
fairly constant. What you are talking about in actual fact does not happen.
Under the scenario you have described, we would expect to see someone at, let
us say, 50 nanograms per "mill" of nicotine go to 350 or 400. That
does not happen. That is not supported by experimental studies. Although what
you are saying could happen, the science does not support it.
I made three points about the communication of information. One point was let us
try dealing with smoke in yields per litre. The second point was let us try
some graphical representation. I should point out that that particular aspect,
the graphical representation, was recommended by the President's ad hoc panel
to the Federal Trade Commission. I was a member of that panel and that was one
of the recommendations. I am not the only one making this suggestion. In the
United States this approach is thought to have some merit.
Senator Haidasz: Has it been implemented yet?
Mr. Rickert: No, not yet.
Senator Haidasz: Why not?
Mr. Rickert: I cannot answer that. I am not privy to the policy-making process
in the United States, but it is something which has a great deal of support.
At any rate, the third point that I wanted to make concerns nicotine. The bill
would say nicotine 0.3 milligrams. My suggestion is an index for nicotine
rather than a nicotine number, and this index would take into account the
nicotine in the tobacco, as well as the nicotine in the smoke. You want to make
sure that if you limit the amount of nicotine, you truly limit it, that you do
not allow the reservoir to be used. What this does is illustrates the fact that
the very low machine number for nicotine, or for tar, really represents a large
reservoir. For example, numbers like 600 and 400 would mean that there is a
large reservoir there which could be tapped. The low number means that there is
far less of a reservoir. So what I am suggesting is that the reporting should
take into account two things, not only what is in the smoke but what is in the
tobacco itself. Effective communication, is, in summary, what I wanted to say
about the communication aspect.
Bill S-5 would retain the current method for communicating information about
cigarette toxicity. This is confusing to most Canadians, and we have seen that
around the table here in our discussions. It is not understood what the numbers
mean. Better methods of communication have been suggested but have not been
considered in the present version of Bill S-5.
Also we must bear in mind, or I like to bear in mind anyway, the blueprint which
says it would be unrealistic to ban a product which is part of the daily lives
of millions of Canadians. In other words, with respect to the millions of
Canadians that continue to smoke, the goal should be harm reduction, because,
as the blueprint says, it is unrealistic to ban the product.
Also, we must always bear in mind that cigarettes are used by smokers. According
to the blueprint, product modification may have some public health potential.
Any modification would have to achieve health goals while at the same time
avoiding pressures to use contraband or personally imported cigarettes. If
smokers would not buy these products product modification initiatives would
fail. It is no use designing the perfect cigarette if nobody uses it.
I wish to thank the committee for inviting me, and I hope my comments have been
useful and constructive. Unfortunately they were a little technical but perhaps
I can respond to that if there are any questions.
Senator Bonnell: Can you advise about the non-smoker, for example, the children
who live with parents who are smokers? Why are they getting cancer from the
second-hand smoke, which is supposed to be worse than the primary smoke?
Mr. Rickert: That is a question which is impossible to answer in the short time
that is available to me.
Senator Bonnell: Do you know the answer?
Mr. Rickert: I do not think anyone knows the answer.
Senator Bonnell: Just tell us you do not know. That is easy.
Mr. Rickert: There are certain people who feel they do know the answer.
Senator Bonnell: A lot of people think they know about everything.
Mr. Rickert: I am not one of them.
Senator Haidasz: Dr. Rickert, are there any Eclipse cigarettes on the market in
Mr. Rickert: Not in Canada, no.
Senator Haidasz: Are there any in the U.S.?
Mr. Rickert: Yes.
Senator Haidasz: What companies?
Mr. Rickert: They are being test marketed in Chattanooga, Tennessee. They are
also being test marketed in Germany and Sweden.
Senator Haidasz: Those that are marketed in the U.S., what percentage of the
tobacco sales are Eclipse cigarettes?
Mr. Rickert: The product was introduced in June.
Senator Haidasz: By what company?
Mr. Rickert: RJ Reynolds Company. This has been under development for ten years.
Senator Haidasz: How many do they sell of these things?
Mr. Rickert: I have no idea. That information is available only to the RJR
Company. It is only in the test market stage, so it has not been released
throughout the country as yet.
Senator Haidasz: Do you know the results of the tests?
Mr. Rickert: I have been told that in Germany the product is reasonably
successful. I do not know what it is like in the U.S.
Senator Haidasz: What do you mean by reasonably successful?
Mr. Rickert: Meaning that smokers are not rejecting it like they rejected "Next."
Senator Haidasz: You do not have the results from the U.S.A.?
Mr. Rickert: No, I do not know that.
Senator Haidasz: RJ Reynolds, I guess, has all the information. Are they doing
the study or is it being done by someone else?
Mr. Rickert: No, it is their product. They have released it in test markets so
they could learn about sales. I have no idea what those sales would be.
You see, that is where cigarette development is going today. That particular
product has the potential for greatly reducing cancer. The smoke from that
product has maybe 90 to 95 per cent fewer carcinogens than are found in regular
Senator Haidasz: What brand does Reynolds sell in Canada?
Mr. Rickert: RJR McDonald sells the Export brands.
I think that the tobacco companies should be encouraged to make all their
cigarettes like Eclipse. That should be the standard, and they should be
encouraged to follow it.
Senator Haidasz: What levels of nicotine and tar come out of an Eclipse
Mr. Rickert: We are talking about machines again. As far as the machine is
concerned the level of nicotine delivered from an Eclipse cigarette is
approximately 1.7 milligrams. The tar is approximately 0.3 milligrams.
There are two aspects of tar; one is how much is there and the other is what is
it made of, and the tar from an Eclipse cigarette consists mainly of glycerol.
It is about 80 per cent glycerol and water.
Senator Haidasz: As far as you know, Germany is the only country where the
companies are finding acceptance of the Eclipse cigarette?
Mr. Rickert: That is hearsay, I have no concrete information. That is something
which I gleaned by talking to people.
Senator Haidasz: Where did you read that, what article?
Mr. Rickert: I did not read it, I picked it up in conversation.
Senator Haidasz: Well, it would be difficult to find out what company is
producing this cigarette.
Mr. Rickert: No, it is not, it is the RJ Reynolds Company.
Senator Haidasz: In Germany?
Mr. Rickert: No, they are releasing it world wide. It is the same company. The
RJ Reynolds Company is releasing that product in conjunction with the Svenska
Tobacco company in Sweden.
Senator Haidasz: You say Japan uses the Muncel System?
Mr. Rickert: No, the Muncel System that I was describing was just a way of
Senator Haidasz: There is no company that uses that system?
Mr. Rickert: It is not used in the cigarette industry, but it is used in the
paint industry for measuring colour. I have suggested that it could be applied
to tar or colour.
Senator Haidasz: Do you think smokers would test their own tar intake?
Mr. Rickert: No, I do not. However, it would increase the awareness on the basis
of what you get depends upon how you use it. That is very important.
Senator Haidasz: Yes, of course. Have you read of anything similar to the Muncel
System that would give you the same information without going to the trouble of
testing the shade of the tar?
Mr. Rickert: I do not know of anything like that.
The Chair: What is reconstituted tobacco?
Mr. Rickert: It was thought, a long time ago, that one of the ways of changing
the properties of tobacco would be to extract it with water, make it into a
sheet like paper and then chop it up. In other words, take the product and
doing things to it and then add back certain things.
The Chair: What would be the reason for changing the tobacco?
Mr. Rickert: In the case of the Eclipse cigarette, one of the reasons for using
reconstituted tobacco is to have a significant amount of glycerol present in
the tobacco. Glycerol is not normally present in tobacco. When glycerolpasses
through the tobacco, it extracts the flavour and the nicotine. Therefore, you
have to remake the tobacco in order to get glycerol into it.
The Chair: Then the glycerol reduces the danger of the tar content?
Mr. Rickert: You are not burning tobacco. When you burn organic material,
whether it is strawberry leaves or tobacco leaves or whatever, it produces a
lot of toxic compounds. If you can get a product that just heats tobacco, then
you get rid of the burning and all of those toxic compounds.
Senator Forest: You were saying that the Eclipse product was involved in test
sales in June. How long would it normally take to do the research to see how it
Mr. Rickert: This is not the first time that this sort of product has been
introduced. "Premier" was the precursor of this product. It was
introduced in 1988. I believe it was taken off the market a year later. I think
the RJR Reynolds Company will probably have the answer to the question within
Senator Forest: Madam Chair, I would like to hear more about Dr. Rickert's
background. I understand from what was said that he has been doing a lot of
Mr. Rickert: I can do two things: I would be pleased to leave a CV with the
committee. Secondly, I can give a brief synopsis. I began with the Tobacco
Characterization Program at the University of Waterloo in 1970. At that time, I
was a professor in the Department of Statistics at the university. I have
taught statistics at the University of Waterloo for 25 years. I am now an
adjunct professor at the University of Waterloo. I have a PhD. in chemistry. I
am also a tobacco chemist. I have approximately 76 publications in the area of
Over the last five years my work has been supported by Health Canada to the
extent of about $5 million in research moneys. Over the last 20 years we have
functioned as the analytical arm of the Bureau of Tobacco Control. We have done
all of the analytical work in support of government policy.
Senator Forest: I gather, in spite of all your background, you had no input in
developing Bill S-5?
Mr. Rickert: I received one or two phone calls which asked me some specific
technical details but beyond that I have had no input.
Senator Bonnell: Have you got tenure?
Mr. Rickert: I had tenure, yes. I still have. I have the august status of being
Senator Cohen: Doctor, if you were setting the standards for measuring the
volume of smoke and for smoking machines, what would you consider to be the
three major areas that we should review?
Mr. Rickert: What is important is the total amount of smoke that comes out of a
cigarette. By the "total amount" I mean that which goes to the
environment and that which goes to the smoker. Often there is a chimney effect.
That is, in order to decrease what is going to the smoker you put it out in the
environment. One way of dealing with that issue is to look at total smoke
emissions into both the environment and the smoker, and focus on significantly
reducing those emissions.
In my opinion, Eclipse has demonstrated that the technology exists to have
radically reduced emissions in total, both side stream and to the smoker. I
think, if one were to look at what is coming from an Eclipse type cigarette in
total, one could work progressively towards that end. Tobacco burning
cigarettes are very limited in terms of what you can accomplish in harm
reduction. What is needed is a radical new approach to the whole issue.
Senator Forest: Would your proposal of identification on the package with the
colour charts not give you that?
Mr. Rickert: In my opinion, what is really needed today is to deal with the
current misconceptions among smokers about the meaning of the numbers.
Cigarettes are advertised based on those numbers. People accept the numbers as
absolute. If a bottle of beer says five per cent alcohol, it is five per cent
alcohol. If the cigarette says 1.0 milligram people think it is 1.0 milligram.
Well, it is not true. They really believe in the issue of "light" and
"mild" and "ultra-light." That has to be effectively dealt
Senator Bosa: Dr. Rickert, I see you are the president of Labstat Inc. You are
also a professor who teaches at a university?
Mr. Rickert: I am now an adjunct professor, I still have an appointment there
but in June of this year they made a lot of us an offer that we could not
refuse. They had to cut the budget so some of us left.
Senator Bosa: Is Labstat Inc. a private enterprise company?
Mr. Rickert: It is a private organization, totally owned by its employees. I am
the major shareholder. There are four shareholders, and they all work for the
Senator Bosa: Do you do all sorts of research, or are you confined to research
Mr. Rickert: We have two sections. One does food characterization, the other
does tobacco characterization. In food characterization we produce the
labelling requirements for food. Under tobacco characterization, we do work for
the legal profession, the tobacco industry and the federal government. I like
to view the laboratory as a source of credible information, and that is what I
do. I am in the business of analyzing things. Tobacco happens to be one of them
and to be my major interest.
Senator Bosa: I can see that considerable effort and finances have gone into
looking into the effects or ill - effects of smoking. Are you aware if there
are equal efforts made in the area of psychological pursuits as to why people
continue to smoke?
Mr. Rickert: Definitely.
Senator Bosa: With all the evidence that has been coming forward that smoking is
so bad, so deleterious to people's health, people still smoke.
Mr. Rickert: The easiest answer of course is not the best answer because it is
overly simplistic: People smoke for nicotine. That is simplistic but that is
the first thing that comes to mind. Nicotine is a very powerful reinforcer, and
that is fundamentally why people smoke. Of course there are all the other
things -- taste, flavour, ritual, lighting up, doing this, doing that <#0107>
that are part of it, but fundamentally it is nicotine.
Senator Bosa: I used to smoke two packs a day, and on January 3, 1969, at 5: 15
in the afternoon I gave it up.
Mr. Rickert: Most people can remember that. That is amazing.
Senator Bosa: The reason I gave it up was not because of the things that you
have outlined, the ill-effects that Senator Haidasz has been espousing, but
because I was running out of cigarettes all the time. I refused to get up and
get dressed and go out and look for a restaurant that was open at midnight. So
it was a question of deciding that I did not need it.
Mr. Rickert: There are many reasons for smoking. There is the question: Is their
alevel of nicotine at which you do not become habituated? It is interesting
what came from looking at a group of individuals called "chippers. "These
people smoke on occasion. They may smoke a maximum of five cigarettes a day and
can take it or leave it. It is not a driving force in their lives.
Senator Bosa: Let me say quickly something about the reasons why my generation
started smoking. I started very young. I was maybe 10 or 11 years old when I
started to take my first few puffs. We would go to movies, and the most
beautiful women would be smoking with cigarette holders. They looked so
elegant. In war movies, whenever pilots had a crash, they would light a
cigarette. You wanted to be a hero too, so you started smoking. Today you do
not have that situation; I mean, the advertising is entirely different.
Mr. Rickert: It is still life style advertising though, regardless.
Senator Keon: Dr. Rickert, I congratulate you on your science, but I have a
philosophical and perceptual problem with the dissemination of your
information. The tobacco companies are absolute experts at distorting
information and producing misperception. They are holding out the carrot that
the safe cigarette is coming down the road, and this sort of thing, when in fact
there is no safe cigarette. This is a terrible health problem in Canada, and
the proposed signage for cartons and so forth is simply not adequate. It does
not express the risk that people are subjecting themselves to when they smoke
My major problem is that the tobacco companies take scientific information and
distort it. They distort it very badly, and I think that, until there is some
good science that suggests cigarettes can be smoked with some degree of safety
to the smoker and the people in the immediate environment, the statements on
the package should simply say. "This product will ultimately kill you if
you continue to smoke."
Mr. Rickert: I have not suggested that we take the warning off. Please, that is
a misconception, I have not suggested that. I have suggested that the numbers
on packages for tar and nicotine are meaningless. That is all I am saying.
Senator Keon: I agree with you there, but your suggestion of your little colour
slide rule is equally misleading. I think your science is very good and I
commend you for that, and the research has to be done and I commend you for
that, but the application of scientific knowledge onto a package of cigarettes
that suggests it might be safe to smoke one is a gross distortion of
Mr. Rickert: I will always start by saying that the only safe cigarette is an
unlit cigarette. I think one always starts from that particular premise. Then
the risk factor goes up, depending upon what you take from that cigarette. All
I am suggesting is that here is a way of telling you how much is coming from
Senator Keon: Tobacco companies love that.
The Chair: I thank you, doctor, for your presentation. I appreciate your taking
the time to come this morning.
At the meeting next Tuesday at 10: 00 a.m., we will be hearing representatives
from the Canadian Medical Association.
The committee adjourned.
OTTAWA, Wednesday, October 23, 1996
The Standing Senate Committee on Social Affairs, Science and Technology, to
which was referred Bill S-5, to restrict the manufacture, sale, importation and
labelling of tobacco products, met this day at 5:00 p.m. to give consideration
to the bill.
Senator Mabel M. DeWare (Chair) in the Chair.
The Chair: Honourable senators, we have before us today Bill S-5, an Act to
restrict the manufacture, sale, importation and labelling of tobacco products.
With us this afternoon, we have from the Canadian Tobacco Manufacturers'
Council, Mr. Robert Parker, who is President, and Ms Marie-Josée
Lapointe, who is Communications Director.
Mr. Robert R. Parker, President, Canadian Tobacco Manufacturers' Council: Madam
Chair, we are pleased to be here on behalf of the Canadian Tobacco
Manufacturers' Council, which is the industry association for the three tobacco
manufacturers in Canada. Some days ago, we provided members of the committee
with copies of our detailed brief on Bill S-5. In these remarks, I will simply
highlight our principal concerns with the proposed bill.
Before doing so, I want to indicate the ongoing commitment by the industry to
product modification and to emphasize that any criticisms we express of this
bill in particular are in no sense a reluctance by the industry or its member
companies to pursue the process of changing the product to provide lower
average deliveries of tar and nicotine. That has happened in the past. In fact,
it has been under discussion in recent months in a project started by Health
Canada and led by Dr. Rickert, who appeared before this committee not long ago.
Industry representatives from both Canada and the United States participated in
The key and unavoidable element in product modification, however, is consumer
acceptance. That is the view not only of Health Canada and the industry, but of
all the independent scientists and researchers engaged in the exercise. The
reason is that product modification without consumer acceptance will invariably
As to Bill S-5, our concerns include matters of both process and substance. Some
are technical. Overall, it is our view that the bill would fail to achieve its
intended purpose, which is a significant reduction in the levels of tar and
nicotine consumed by smokers, but would at the same time lead to other,
unintended ill effects.
As explained in the brief, Bill S-5 would have the effect of banning every
tobacco product currently available on the Canadian market -- every cigarette,
every cigar, all brands of fine-cut or roll-your-own tobacco, all types of pipe
tobacco and all types of smokeless tobacco. That prohibition would come into
effect 90 days after Royal Assent, and that period of time is vastly
insufficient to design, research and produce the products that the bill would
allow, even if there were a current market for them, which there is not.
It would also make illegal very large, existing inventories of the banned
products, whether those were in the hands of manufacturers, wholesalers or
retailers. Such inventories typically take between six and twelve months to
move from the manufacturer to final sale. The retail value involved at any
point in time is several billion dollars.
We believe the direct and immediate result of this would be a massive
re-ignition of the contraband tobacco problem, with all its attendant issues --
lost jobs, lost government revenues, disrespect and disobedience of the law by
millions of otherwise law-abiding citizens, and very large illegal and untaxed
revenues flowing into the hands of criminal organizations, to mention only a
For those reasons, although I am sure it was not intended, Bill S-5 has
significant parallels with a great many other anti-tobacco initiatives. There
are health risks associated with the consumption of tobacco. Smoking must
therefore be an adult decision. Children should not smoke. We support programs
designed to deny access to tobacco by under-age youth. We do not question the
right of governments and others to pursue strategies to prevent smoking uptake,
promote cessation and reduce consumption.
The members of the committee should be aware that for 10 years virtually all
such strategies have been an abject and collective failure. Statistics Canada
numbers are unequivocal and irrefutable -- with respect to the smoking rate in
Canada today, the percentage of Canadians 15 years of age and older who smoke
is essentially what it was in 1986. The only change of significance during that
period was a decline and then an increase back to previous levels in the smoking
rate of young women and then young men, beginning in the mid-to-late 1980s and
levelling off by 1984. This was a decline and then an increase, it should be
noted, that occurred while advertising was banned, while taxes were still high
and rising, and just as even more prominent warning messages were being
I repeat that the industry's opposition is not to tobacco control measures per
se; it is to measures that not only fail to produce the intended effect, but
also have harmful other consequences, intended or not. Our conclusion is that
Bill S-5, unfortunately, belongs in that category.
That concludes my opening remarks, Madam Chair. I look forward to your
Senator Haidasz: Mr. Parker, you mentioned that there is no Canadian cigarette
manufactured that is even close to the levels of nicotine and tar as set out in
the standards found in Bill S-5.
Mr. Parker: There are two which meet the tar and nicotine standard in Canada.
They have been on the market in Canada for about 10 years. In that period of
time, they have managed to garner 0.2 per cent of the market, about 1-500ths of
the total market.
Senator Cohen: Is that Eclipse?
Mr. Parker: No, Eclipse is not on the market in Canada. It is a new cigarette
being test marketed in the United States, but not here.
Those two brands do meet the contents standards mentioned in the bill. However,
the bill would also ban reconstituted tobacco or ban anything over 2 per cent.
Those cigarettes have larger quantities of reconstituted tobacco and therefore
would also be illegal.
Senator Haidasz: What are those brands?
Mr. Parker: One of them is Medallion, and I am not sure of the other. One is
made by Imperial Tobacco and the other one by Rothmans. I will confirm that for
Senator Haidasz: What did you say their market share was?
Mr. Parker: It is 2-10ths of 1 per cent.
Senator Haidasz: I am sure you are aware of statements by medical clinicians
about the harmful side effects of smoking tobacco.
There have been 20 so-called clinical entities that they call tobacco-related
diseases. The amount of not only those chronic diseases but also the deaths
attributed to tobacco smoking directly and indirectly cost about $17 billion
per year to the Canadian economy. Do you have any comments on those figures?
Mr. Parker: That is the highest figure of the associated costs I have ever heard
Senator Haidasz: I said directly and indirectly.
Mr. Parker: It is still the highest I have ever seen.
The industry is aware that there are health risks associated with smoking. That
is why we believe children should not smoke, among other things. The problem
with this particular bill is how do you persuade people to reduce their
consumption? The proposition you have proposed, if I am not putting words in
your mouth, is that making the only cigarettes available of much lower tar and
nicotine levels would, in principle, force smokers to buy them. The difficulty
we have is that our experience in the tobacco market -- and it stretches over a
century for each of the three companies which are part of the industry -- is
that that is not in fact what smokers would do. They have had a choice in the
marketplace of very low tar and nicotine brands for 10 years, and very few of
them have opted to buy those brands; some have.
It is also true that over the 20 years prior to that, from the mid-1970s to the
early 1980s, the industry, working with government, went through an arduous and
continuous process of reducing sales-weighted average deliveries of tar and
nicotine. The numbers and the way they declined over that period as a result of
changing public tastes are outlined in our brief. However, if public taste does
not change, consumers will not buy the product. That is why we are worried about
Senator Haidasz: In view of the health costs to the patient and to the country,
why are you advertising those products?
Mr. Parker: The companies advertise on a competitive basis to attract the
business of people who have already decided to smoke, senator. They do not
agree -- although the accusation has been made -- that advertising promotes or
causes the decision to smoke. I know of no reliable research indicating that
advertising or promotion of any kind is a factor. Other things are known to be
factors. Teenage rebelliousness is one of the leading factors. As well, there
is peer example, parental example and peer behaviour. They are also important.
There are other factors as well, but I do not believe advertising is one of
We have what amounts to a laboratory test of the proposition. Advertising has
consistently been present in the United States as long as the product has been
sold, as far as I know, and it has not ceased. It is still in place. It
disappeared for seven years in Canada during the Tobacco Products Control Act.
During that same period, while there was product advertising in the United
States but none here, there was a larger decline and change in the rates of
smoking prevalence in the U.S. than in Canada. It sounds counter-intuitive and
I know many people believe, without examining the proposition, that advertising
causes people to make the decision to smoke. All I can tell you is that, to the
best of my knowledge and that of the member companies, it does not.
Senator Haidasz: Have any of the Canadian or even the American tobacco companies
made progress or any great effort to improve the taste of those cigarettes that
have a low content of nicotine and tars?
Mr. Parker: Yes, they have, senator. With respect to conventional cigarettes,
the approach of American companies has been to use "flavourings" or "casings"
and additives to the tobacco to provide the flavour that disappears when tar
levels decline dramatically. Casings are not widely used in Canada and are not
part of the market here. In fact, the only additive that ever appears in
Canadian tobacco is menthol for menthol-flavoured cigarettes. There are between
500 and 600. They are not all used, obviously, but there are different recipes
for different cigarettes that might use five or 10 different "flavourants"
in small quantities for cigarettes made in the United States.
The other thing they have done in two or three instances is tried to produce a
different kind of cigarette, one that uses a different technology. The current
example is something called "Eclipse". Dr. Rickert discussed it with
the committee when he was here 10 days ago. That is a cigarette that does not
burn the tobacco but rather heats it.
This product is still in market tests. Obviously there is not a lot of
available, detailed information about it, even from the subsidiary of the
company that operates in Canada. There are no sales figures, for example, and I
do not know any details of the way the constituents vary. However, there is
significantly less tar, I have been told, and it remains to be seen whether the
market will accept it.
There have been previous product examples. "Next" was one of them, and
another one was called "Premier". They failed at a cost of hundreds
of millions of dollars, but the companies continue to try. Obviously if one
does come up with a cigarette that is attractive to adult smokers and is
consumed in significant quantities, one can safely assume there will be a
competitive frenzy to come up with matching products.
Senator Haidasz: Do you have any figures to tell us about the sales of the
menthol-treated cigarettes in Canada?
Mr. Parker: Again, I could get accurate figures for you, but I believe it is in
the 5 to 8 per cent range. It is not a huge proportion of the market.
Senator Haidasz: Could you give us figures of the sales of different cigarettes
with the varying amounts of nicotine and tobacco? In other words, with respect
to the strongest cigarette you have as far as nicotine and tar are concerned,
do they have the biggest share of the market in Canada?
Mr. Parker: No, not at all. Those are sales-weighted figures. All senators
should have copies of these charts.
Those bars show the percentage of sales in that nicotine category and on the
other one in that tar category. You will see in the nicotine area that the
highest sales tend towards the top but certainly not at the top. At 1.4
milligrams of nicotine, sales decline dramatically. It goes down dramatically at
0.6 and 0.5. Then for some reason, which is not explicable other than by
varying consumer tastes, it goes up at 0.4 milligrams of nicotine.
The tar numbers show a slightly different path. You can see that 13, 14, 15 and
16 are quite different. Again, these are averages, not by brand.
The volume of cigarettes on average would have 13 milligrams of tar per
cigarette. The largest selling would be 1.2.
These are categories. If you add up the lower ones, you have more than those for
1.2. What has happened over a period of time is that those bars have moved
Senator Haidasz: You mentioned in your remarks this afternoon that you have been
working with the Department of Health Canada --
Mr. Parker: Industry representatives have, yes.
Senator Haidasz: -- to produce a safer cigarette.
Mr. Parker: The proposal from Health Canada was a research project to be led by
Dr. Rickert. That would involve tobacco scientists from the manufacturers in
Canada and the United States, as well as independent people, many of them harsh
and long-standing critics of the tobacco industry, investigating the question
of whether it was possible to produce cigarettes with lower levels of tar and
nicotine. The first phase of that project was funded, and I think the report
from Dr. Rickert is due at Health Canada about now. I have not seen it but I
know they had lengthy discussions and meetings on that topic.
The difficulties they face are not only the technical difficulties of producing
low-tar and low-nicotine cigarettes which still have taste and, therefore, some
consumer attractiveness, but also the amount of research required to do it.
You can make filters that are so tight or so highly ventilated that the
deliveries fall off dramatically. That does not necessarily mean that the
consumer will use them in such a way as to deliver that result. Our indications
are that some people fool themselves. They buy a low-tar, low-nicotine cigarette
and they cover up the little air vents in the filter with their fingers or with
scotch tape in order to persuade themselves that they are smoking a low-tar
cigarette. However, they are actually ingesting more tar and nicotine than what
is stated on the package. That is similar to someone who has chips and gravy
for lunch and orders a diet coke with it because they are trying to lose weight.
That behaviour occurs with all products, but it is not common. Most people who
buy low-tar or low-nicotine products do so because they like it. They smoke
them in the normal fashion, and they get low tar and nicotine from them. In
terms of your bill, the problem is that they are rare birds -- one smoker in
Senator Haidasz: Do you know of any Canadian tobacco companies spending
substantial amounts of money on research to make a safer cigarette?
Mr. Parker: Safer in what sense, senator?
Senator Haidasz: Less nicotine and less tar.
Mr. Parker: They spent significant amounts of money during the 1970s and 1980s
not only to produce but to promote lower-tar and lower-nicotine cigarettes.
Both the percentage of people who smoked during that period and the kinds of
cigarettes they smoked changed significantly. There was a decline in smokers to
about 30 per cent by the mid-1980s, then it stuck there, and the taste of
smokers stuck there. That was the time when you saw the ultra low-tar and
nicotine -- the brands I mentioned -- being introduced, and smokers did not
continue to shift their behaviour.
Over the last 10 years tastes have not changed. Therefore, to make such a
cigarette is an economically losing proposition. There was a period of seven
years during which, even if we had developed a cigarette with those
characteristics and potentially more appeal, there was no way the companies
could have told the public about it because advertising was banned.
The Chair: Just for the record, I believe those two cigarettes brands were
Medallion by Imperial Tobacco and Viscount by Rothmans; is that correct?
Mr. Parker: Yes, I believe it is.
Senator Cohen: Mr. Parker, I am encouraged to hear that the tobacco industry
recognizes that smoking is a deterrent to health and that children should not
smoke. That was refreshing to hear.
Second, it was upsetting to learn that there has been no change in cigarette
smoking among children since 1986.
Mr. Parker: There was a change for young smokers, but it is back to where it
was, senator. That has happened every now and then over the past 30 years. On
the graphs of prevalence rates, there are inexplicable dips and then the rate
comes back. No one seems to know why it happens. It happened in Canada for
young women first and then for young men.
Senator Cohen: When Dr. Rickert appeared before us, he explained that another
deterrent of low-tar, low-nicotine was the concept of over-smoking. When you
over-smoke, the smoke gets down deeper in your lungs.
He made a suggestion which I found intriguing. I do not know how effective it
would be and I would like to ask you about it. He talked about colour coding.
Maybe that would appeal to younger people. Do you think that would be a help?
Would your members cooperate in reproduction of this colour scale? Do you think
they would be receptive to the idea?
Mr. Parker: I was not here for Dr. Rickert's testimony, but I read it with great
interest. As a result of that, I spoke to technical experts within the
With regard to whether the industry is interested in cooperating or working on
better ways of accurately informing consumers about tar and nicotine levels in
their cigarettes, the answer is absolutely yes.
As to this particular suggestion, Dr. Rickert is obviously very strongly in
favour of it, but many other scientists who have nothing to do with the tobacco
industry do not agree with him. In other words, there is no consensus on this
issue. The most recent paper on the subject is from the CORESTA Conference, an
international tobacco scientists' gathering. The last one was held in Vienna
last November. The proceedings were published within the last 10 days. I do not
even have a copy of them yet. They are in German, which will make it difficult
for me to read them when they arrive.
If all filters were the same and all smoking behaviour were the same, then the
colour of the filter after the cigarette was smoked would be a somewhat
reliable guide as to the amount of tar that had passed through the filter. The
problem is that none of those conditions are true. You can turn that filter a
darker colour very quickly by taking one intensive puff, I am told, with the
rest of the puffs being normal, as opposed to smoking the cigarette in whatever
the normal fashion is. You can get two different colours from exactly the same
cigarette and the same filter. Filters are also made of different materials and
in different constructions and will change colour in different ways depending on
the material passed through them.
Methods of measuring nicotine and tar and comparing cigarettes one to another
are relatively accurate. In other words, if one cigarette contains 12
milligrams of tar and another contains 6 milligrams of tar, you can assume that
when burned with a given filter the first will produce twice as much tar as the
second. You cannot, however, necessarily assume that that is what the smoker
will get, because smokes behave differently, just as you cannot design a
machine to test cigarettes which will duplicate the behaviour of all smokers.
It is average behaviour.
Canada now uses, as a matter of law, the ISO standards for measuring smoke
constituents. There were Canadian standards before that. One of the standards
is how far down the cigarette is smoked or how long the butt is when the
machine has finished with the cigarette. The Canadian standard was 30
millimetres. The actual standard in the marketplace, the average length of butt
that people leave -- believe it or not there are researchers in the industry
who measure this kind of thing -- is 33 millimetres. The ISO standard is 25 --
which was adopted by the government -- so it actually relates to smoking more
of the cigarette than smokers do.
The difficulty is that every method has some deficiencies. The answer to your
question as to whether we are interested in working with government and others
to develop better and clearer information for smokers is absolutely yes.
Senator Cohen: If we know how detrimental smoking is to our health, perhaps it
is time we put a skull and crossbones on the back of packages.
Mr. Parker: This shows one of the ironies about all tobacco issues these days.
In fact, a cigarette company located in the Netherlands has done exactly that.
They call their cigarettes Death Brand. The package is black with a white skull
and crossbones. They also produce Death Lights. It has a white package with a
black skull and crossbones. It is a very big seller and it is attractive to
Senator Bosa: Mr. Parker, in what way do products such as nicotine gum and
nicotine patches compete with cigarettes?
Mr. Parker: I do not believe that they do compete. Cigarettes are for people who
are smokers, and the patches and the gum are for people who wish to quit
smoking. I guess there is some cross-substitution from people who have
difficulty quitting. However, if they are competitive in a marketed sense, I am
not aware of it.
Senator Bosa: Is it not true that when tobacco taxes went down, sales of
nicotine patches were lowered considerably?
Mr. Parker: I cannot answer your question because our companies do not sell
either the patches or the gum. They are produced by pharmaceutical companies.
They could tell you about that.
As far as we know, and as far as Statistics Canada knows, the dramatic reduction
in taxes in the early part of 1994 did not result in any increase in smoking
among any age group -- neither youth, for whom money would be much more
important, nor older people either. What did happen is that smokers returned to
the legal market. We had a situation where 40 per cent of the tobacco sold in
Canada was contraband, untaxed, coming across the border from the U.S.
There is a general theory of the inverse relation of price to consumption. We
accept that for any commodity. As the price gets higher, the consumption will
tend to decline. If Canada was an economy that had walls around it and was
closed completely to the outside, that theory would work better. However, in
Canada, with its open borders and cigarette smuggling available to practically
anyone who cared to indulge in it, the effect of high taxes was to turn people
to illegal markets and the smoking rate did not decline. That is what I told
you earlier when I said it was a straight line from 1986.
Senator Bosa: In 1989, Canada's four tobacco companies made a joint submission
to the Standing Committee on Health, Welfare and Social Affairs in the House of
Commons. They said that nicotine was beneficial because it could be either
relaxing or stimulative, depending on the amount consumed, and could assist in
weight control. Do you agree with this viewpoint today? If not, when did the
industry change its mind?
Mr. Parker: That was a long time before I was retained by this industry, which
was four years ago. However, I would be happy to examine it and ask the
companies if that represents their view today.
One of the reasons people smoke is that they enjoy the effects of nicotine. I
would not believe that 7 million people would continue to consume the product
if they thought anything else. Some researchers have stated that nicotine has a
possible role in the treatment of Alzheimer's disease, for example, and some
other things. Whether it is a stimulant, a relaxant, or a depressant, I would
leave that for the doctors on the committee to comment upon. They are more able
to do so than I am.
Senator Bosa: In a previous answer to Senator Cohen, you stated that it depends
how a cigarette is smoked -- that is, with what rapidity and with what suction
the smoker uses. That can have an effect on the amount of nicotine that can be
inhaled. The filter can change between one brand and another. You intimated
that there is no standard way of measuring the exact amount of nicotine and tar
because of the difference in smoking behaviour.
Mr. Parker: I want to be precise about this. There are a number of standard ways
of doing it. The only point I am trying to make is that they all have some
deficiencies. By using the ISO standards -- and we do that now -- we can tell
smokers about what are the tar and nicotine standards of cigarettes on the
Canadian market. It is not a bad system, but it is not a perfect system. It
might well be improved.
Dr. Rickert pointed out some of the ways in which he believed the system might
be improved. We are happy to talk to the government or Dr. Rickert or anyone
else about them. I was trying to say that it is not an easy question.
Senator Bosa: You recited a number of companies that have experimented in
tobacco alternatives, and you mentioned specifically a cigarette "Next".
Mr. Parker: Yes, I think so.
Senator Bosa: That was produced by Philip Morris, was it not?
Mr. Parker: I am not an historian of the U.S. tobacco market. I think "Next"
was a product of Philip Morris, and I think "Premier" was a Nabisco
product like "Eclipse", which is the next generation of that
Senator Bosa: You said they lost millions of dollars. How long was it on the
market? How did they promote it? Did it collapse when the economic feasibility
Mr. Parker: No. I believe that "Next" was forced from the market by
the Food and Drug Administration.
There is a gigantic argument among anti-tobacco groups, as Senator Haidasz is
aware, concerning whether there is any such thing as a safe cigarette and
whether it is possible to make a cigarette that has no risks associated with
it. However, if you can make a cigarette that has demonstrably lower risks
associated with it, is it correct for government to promote one or allow one to
be promoted in conflict with another?I simply cannot answer that question. I am
told that "Next" was withdrawn in part due to pressure by that kind
of debate by the FDA.
The major complaint about "Premier" -- and there was a movie made
about it -- was that it tasted terrible. Consumers did not like it. Immense
amounts of money went into its marketing and distribution. It simply could not
be sold, so it was withdrawn. The company took a write-off of $350 million.
Senator Bosa: It was not good for the government to promote one cigarette versus
another, but it would be good for the tobacco companies if they promoted a
cigarette that did not contain the two substances that have been proven by
several entities to be harmful to human beings.
Mr. Parker: The problem is not that companies would compete with their own
versions if such a cigarette existed. The question is whether the governments,
because of health concerns about cigarettes, should say to people that you
should smoke this cigarette other than that one. Others say that the government
should not say any such a thing, that they should only be saying, "Do not
smoke anything. That is it, period." They have been doing that for 10
years with significantly little impact.
Senator Bosa: I am not satisfied with that answer, but I promised the chairman
that I would pass to someone else.
Mr. Parker: I will endeavour to satisfy you on your next round.
Senator Losier-Cool: Returning to what you said to Senator Cohen and partly to
Senator Bosa about the health of smokers, you are interested in making a
cigarette that is less harmful to smokers -- that is, admitting that there will
be smokers. What do we get when we buy light cigarettes? We know that Player's
Light has a cigarette with 13 milligrams of tar. Can that amount of tar be
considered a light cigarette?
Mr. Parker: "Light" and "ultra light" are relative terms.
They are used by the companies within brand families to distinguish a Player's
Light from a Player's, or from a Player's Ultra Light. Some companies have up
to four or five distinctions. They are describing a combination of the average
quantity of nicotine in the tobacco and the amount which is adjustable in the
blending process. If you have a number on the package, you have to ensure that
all the tobacco used to make those cigarettes meets those standards. You blend
different grades of tobacco and different grades have different quantities of
nicotine. It will also tell you what quantity of tar will be produced by that
cigarette when smoked by a machine. Again, it is a relative number.
The difference between the cigarettes, besides the amount of nicotine in the
blended tobacco used, is the filter and paper design. That is a very complex
topic. Is 13 milligrams of tar light? Well, it is lighter than one that has 16
milligrams of tar. However, it is heavier than one that has 9.
Senator Losier-Cool: Do you consider that fair or honest advertising? When
people smoke a light cigarette, they feel they are having less nicotine or less
tar. It is just like menthol cigarettes are known to cause lung cancer. Yet,
you said a while ago that menthol cigarettes have only 5 per cent of the
market. Maybe we could ban that product.
Mr. Parker: Let me try and answer your questions in order, senator.
As to whether there should be a standard established for what a light or medium
or ultra-light cigarette is, as far as I know, the government has not suggested
that to the industry. I would be happy to ask them and let you know if that has
happened and what their response was.
I do not know whether the industry would have objections to it, but I would only
be guessing. These are highly competitive enterprises. They each market their
own brands and they market them very aggressively against each other.
What the companies are doing when they describe a particular package or member
of a brand family as "light" is telling the smokers of that cigarette
how it compares to existing cigarettes in the family. Players was the first one
established. Players Light clearly indicates to smokers of that brand and
others that this cigarette has less nicotine and produces lower tar.
Is it misleading? They do not seem to believe so and neither do their customers.
Would it be helpful to establish standards so that we could only call a
cigarette light if it had a certain amount of nicotine? That would require
significant research on what the consumer's view is and what we would do to the
existing marketing of products.
Much has been invested in the various cigarette brands out there. They vary and
they are not all the same. There is no question about that. They are similar
only in that they are lighter than other members of the same brand family.
I am surprised by your second question about menthol cigarettes. I never heard
any particular accusation levelled at menthol cigarettes.
Senator Losier-Cool: It is because people inhale more. This is what I read. It
refers to lung cancer.
Mr. Parker: Does this apply to menthol cigarettes?
Senator Losier-Cool: Yes.
Mr. Parker: I cannot confirm the information because I have never heard it.
As to whether banning it would work, we are back to the problem that is central
to this bill -- if you ban a product that people want to consume, you will get
Senator Losier-Cool: That could be a start because it is a small market.
Mr. Parker: Yes, it is a small market, and it would be more difficult for
criminals to set up distribution systems for something that is only 5 per cent
of the market as compared to 95 per cent.
My concern would be the effectiveness of prohibition. It did not work with
alcohol, and I do not believe it would work with cigarettes.
Senator Bonnell: My first question is more of a statement than a question. I
started to smoke cigarettes at the age of nine, not because I was addicted to
nicotine, but I started to smoke cigarettes by rolling up maple leaves in the
fall of the year just to be one of the boys. Later it became a habit.
Sometime in the last couple of weeks, I saw where some doctors from British
Columbia stated that they now have the proof that cigarettes do cause cancer.
They can prove it now. Does the tobacco industry accept that proof?
Mr. Parker: Senator, we have not even received the paper yet to read it. It was
published last week, seven or eight days ago. One or two of the U.S. tobacco
companies have issued preliminary statements indicating they would be very
interested in seeing it.
Obviously, if anyone identifies a specific link with a particular constituent of
tobacco that is responsible for the risk of certain kinds of diseases, that is
useful information because it allows you to work on removing that ingredient.
It is also the case that one of the most vigorous anti-tobacco campaigners in
the United States, a Dr. Stanton Glantz from California, has said that it is a
nice piece of research, but he does not believe it will have any public health,
legal or political impact.
Senator Bonnell: You really have not done your research on that question yet.
Mr. Parker: We have not seen it yet. It was literally just published Thursday or
Friday last week. I returned from a business trip and saw it in the papers on
We asked for the papers. Canadian industry scientists will have to look at it.
Senator Bonnell: I am a medical doctor, and I am a little sceptical about that
proof. All my life, through medical school and for many years after that, I
have been told the cause of cancer is still unknown.
Senator Cohen: I want to talk about the Eclipse cigarette because you mentioned
that the tobacco was heated in the process rather than burning it. This is
supposed to reduce the substance that abuses the air and abuses our lungs. Has
that been tested? Do you know anything about the test results? You said it was
Mr. Parker: The cigarette was designed and is manufactured by RJR Nabisco, the
holding company of RJR Tobacco, which is a U.S. company headquartered in
Winston-Salem, North Carolina. It is being test-marketed in Chattanooga,
Tennessee, on the west coast of the United States, a city in Oregon, as well as
in two locations in Europe, one in Sweden and one in Germany, maybe.
A test market is a process of making a product available in stores and using
local advertising to tell people about it. You do that for a period of time to
determine what kind of market share or what percentage of smokers will switch
to the new brand. Then you can have focus groups and find out what they think
of it, why they liked it or why they tried it and did not continue to buy it.
Then you decide whether you go national or international in terms of producing
Those results are not in. All that RJR has said publicly about it -- because
their competitors are watching it very closely, as you can imagine -- is that
the results are not in.
Senator Cohen: What puzzles me is how do they determine that heating the tobacco
causes less damage?
Mr. Parker: Using smoking machines, I assume, they measure what is produced by
this cigarette as opposed to another one. I am just repeating what I have read
in the newspapers. A U.S. company would never tell me anything that was
It produces almost no tar. Glycerol and water, I think, are the two things it
produces -- along with nicotine. Nicotine is why smokers smoke. That is what
they want from the product. Obviously they enjoy the process or they would not
do it, but nicotine is the reinforcing substance, as some people have described
"Tar" is a word for the products of combustion. There are many
compounds that make it up, some of which have high potential risks associated
Senator Bosa: Just a question: Do you smoke?
Mr. Parker: Yes, sir, at the moment I do. I have quit for long periods at
various times in my career, as many smokers do.
Senator Bosa: I just want to make one observation. In wars, even though there
are two opposing sides fighting one another, that does not prevent one side
from sometimes praising some general on the other side for being dynamic or
being very good. Having said that, I have to congratulate your industry because
in the face of the mounting evidence of the ill effects of smoking, which became
public in 1964 when the Surgeon General of the United States released this
information, you are still there, selling and producing and thriving as you
were 30 years ago.
Mr. Parker: Senator, I am not sure whether there is a compliment buried in
there. If there is, I accept it and I thank you. The industry knows, as
everyone knows, about the ill effects on one's health associated with
cigarettes. If knowledge of the health ill effects was sufficient to cause
people to stop smoking, it would have done so many, many years ago. People do a
great many things, including smoking, where they know risks are involved. As I
said in my opening statement, maybe that is a good place to come back to. We
know the reason for -- and we do not criticize -- the government's pursuit of
strategies to reduce tobacco consumption. The problem we have as an industry is
not with strategies that reduce consumption. If someone found the magic bullet
that caused people to stop smoking and which had no other effect, what on earth
could the industry say about it? It is going to cost us jobs. I do not think
anyone is going to put jobs up against that kind of an outcome for a proposed
public policy. The problem is that the strategies do not have that effect. They
have other effects, competitive ill effects that prevent our members from
competing with each other, that cause lost jobs or smuggling or a run up costs,
and so on. I think those are very much worth criticizing.
These companies will be out of business the day Canadians stop smoking. As long
as there are adult Canadians who choose to smoke, the companies want to compete
to sell them a product they prefer.
Thank you for listening to me, senators.
Senator Haidasz: I do not know whether you have read in the Canadian press about
the recent article in the science journals.
Mr. Parker: The study that was just released, yes.
Senator Haidasz: Presumably your company, or the companies that you represent,
are going to study this article. If they cannot refute the evidence in that
article by these four researchers, do you not think that tobacco companies have
a responsibility to lower the content of tar and nicotine to the lowest
possible levels because of the harmful effects to health, to the life of the
smokers, and the great cost to the economy -- about $17 billion? Does that not
worry you? Does that not shock you?
Mr. Parker: Does what not shock me, senator?
Senator Haidasz: Those statistics about the number of deaths, the illnesses, and
the economic costs of cigarette smoking.
Mr. Parker: Senator, I have in my office at least 45 different cost estimates,
and they are all different. I find many of those estimates methodologically
suspect and coming from biased sources. The industry I represent has worked for
a long time to reduce tar and nicotine levels consistent with consumer
acceptance. It cannot be done if there is no consumer acceptance. We reduced the
levels sharply, beginning in the seventies, in an effort that reached a plateau
some years ago. We are willing to discuss that subject again. After your bill
was introduced, we met with Dr. Rickert and others this summer at the direction
of Health Canada. However, Health Canada, in its blueprint document last
November, made exactly the same point I am making: If you cannot gain consumer
acceptance for a lower-tar or a lower-nicotine product, it is bound to fail or
lead to a contraband market, and that is our concern.
Senator Haidasz: In other words, you put consumer acceptance and profit above
the welfare of the smoker who eventually will end up with some tobacco-related
disease or who eventually will end up dying, as well as costing our Canadian
economy a great deal in health costs to treat these inveterate smokers. Do you
not feel that the companies you represent should try to achieve the lowest
possible levels of nicotine and tar and any other harmful additives?
Mr. Parker: Senator, I can only repeat what I have already said: They have done
that; they have tried that. However, they are commercial organizations in
business to sell products to adult smokers, and if they get ahead of consumer
tastes, they will be out of business. Is it helpful to have a company produce a
product that does not sell? It is certainly not helpful to the shareholders of
that company, and I cannot see how it could be argued that it would be helpful
to smokers if nobody buys it. That is the problem.
Senator Haidasz: Are the companies that you work for not ashamed when
anti-tobacco groups call them merchants of death? Does that not put to shame
the companies you represent?
Mr. Parker: No, sir, it does not, nor does it make me ashamed. I am proud to
work for these companies. They are excellent companies, run by ethical and fine
people, and I am proud to be associated with them. The problem with the
anti-tobacco groups as a whole, however sincere their overall goal is, is that
their method has largely been to attack tobacco companies, not to attack the
tobacco decision. There is something they ought to realize: No one in the world
ever started smoking because they liked a tobacco company. No one in the world
quit because they disliked tobacco companies. It is very easy for the people
who promote these policies -- whether it is high taxes or ad bans or whatever
-- when they do not work to say that they did not work because of some nefarious
undermining of them by the wicked tobacco companies and their hopelessly
seductive advertising. However, it is equally possible that the ideas failed
because they were lousy ideas. If this were any other issue, most of the people
working in the anti-tobacco groups would be the subject of criticism by you, as
someone who wants to reduce smoking, because they have not succeeded. They have
failed abjectly for ten years, and I do not understand why people who are
interested in reducing smoking do not criticize that failure.
The Chair: I thank you very much, Mr. Parker. We certainly appreciate your
testimony today, and I know it will be beneficial to the committee.
Mr. Parker: Thank you. I will provide the specific information that Senator
The Chair: Our next witness is the National Association of Tobacco and
Confectionery Distributors. We welcome Luc Dumulong.
Mr. Luc Dumulong, Executive Vice-President, National Association of Tobacco and
Confectionery Distributors: We thank the committee for giving us an opportunity
to present our views here on the proposed Bill S-5. I hope everyone has a
chance to read the brief.
We represent independent wholesale distributors across Canada. Most of our
members are family-owned operations, some of which are 100 years old. We sold
collectively last year over $14 billion worth of products. This is not only
tobacco or confectionery products, but also groceries, food services, and so
on. We have thousands of jobs, depending on the operations of our members. We
are an integral part of the tobacco distribution network, and I stressthat we
are "legal". We help government collect hundreds of millions of
dollars in taxes every year for this tobacco product. We were founded
approximately 41 years ago.
Honourable senators, we are here because of, in our view, the high potential of
the re-emergence of contraband that we experienced prior to the necessary tax
rollback of 1994. Our members endured extensive losses of all sorts -- from
theft, job loss and even bankruptcy -- because of the contraband network that
was allowed to flourish during the late 1980s or early 1990s.
Bill S-5 would eliminate the supply of tobacco products in the market today.
Eliminating the supply would not eliminate demand. The demand would still be
there and have to be filled somehow. We know around this table that the
parallel market established during the 1980s of the tobacco contraband days is
still operating. It is like a pipeline; you can fill it with anything. The
pipeline is set up and now operating in firearms, stolen goods, jewellery, so
on and so forth. They are sitting on their hands waiting for the government to
open up another highly lucrative market. The demand will still be there, and
the void will be filled by the organized-crime-led parallel channel.
Of course, there are also ill effects in terms of tax losses. I think the
federal government last year collected $1.9 billion in taxes. That is a lot of
tax, and it does a lot of good. I am not disputing the effect on the social
cost. However, the fact remains that there is a product out there and there is a
demand out there. If the demand is not met by Canadian producers and
distributed in the Canadian organization, it will be done by someone else. You
can be sure that those organizations will not be paying taxes.
At the end of last year, we commissioned a study by the former RCMP Commissioner
Norman Inkster who works for KPMG now in Toronto. Some of his arguments
presented in this report on the ill effects of a plain packaging scheme or
regime here in Canada would also apply to the S-5 regime if S-5 becomes law.
I would be pleased to answer any questions you might have.
The Chair: Before we start, could you explain to us just how serious that
contraband was? Have you any figures on that?
Mr. Mark Tobenstein, President, National Association of Tobacco and
Confectionery Distributors: Madam Chair, I am a distributor in Montreal. I have
been in business for over 27 years. During the time of the contraband, 70 per
cent of the cigarettes sold in Quebec were sold on the black market. The legal
distributors were only selling 30 per cent of the merchandise. It was very
tough. Many distributors went out of business.
When I started in business 27 years ago and came into our family business, which
has been in existence for over 70 years, there were over 40 independent
wholesalers in the Montreal area. Today, there are only four independent
wholesalers left. The way things are going, perhaps soon there will be less
There were other effects as a result of the contraband, such as high taxation,
but that has nothing to do with this. It was a very tough situation. I do not
want to see those things happen again.
With regard to the distribution network, there is a distribution network set up
right now. The Indians have set up a distribution network. In many parts of
Canada they are selling cigarettes today. In many places they are selling legal
cigarettes which they are buying and distributing. They do not have to pay the
GST or the PST. There is a big problem out there right now. The Indians are just
waiting for plain packaging to happen. They would just love that. The network
is all set up.
The Chair: Do the counterfeit cigarettes come mostly from the United States of
Mr. Tobenstein: They come from Canada. The reserves are all set up. They have
their own machines for packing. They have sleeve-wrap machines. Out of the
country, they can buy the cigarettes for $1 to $2 per carton. They bring it in
and put a new cover on it. They have machines to do that right now.
Mr. Dumulong: You can buy a carton of cigarettes on the international market at
$1 per carton. We are not talking about U.S. types, but certain Canadian types
of cigarettes produced in South America. When you consider repacking,
transportation and so on, you can sell this product at $12 per carton on the
In the low-tax jurisdictions of Quebec and Ontario, the average retail cost of a
carton of cigarettes is between $24 and $26 per carton. If you go to B.C., we
are talking $40 to $50. If you go to Newfoundland, they sell for $60 per
It is very easy for any type of operation to buy Canadian-type tobacco and
produce everything. Manufacturers can commission from outside the country
Virginia flue-cured tobacco which is grown all over the world, from Zimbabwe to
South America. They can do it very cost effectively. It is easy to find
commodity tobacco and it is simple to produce. There is a demand.
As was stated earlier, consumer acceptance is key. If you put your car on the
lot for sale and no one wants it, then you will go belly up. If there is a real
demand, then you will sell these things.
We are just distributing the products. We are just filling the legal pipeline,
so to speak. If we do not have products on the shelves that answer consumer
needs and demands, then we will not be selling that. Someone else will, though.
Senator Cohen: I do not question the contraband issue. I can understand the
problems you have.
I read in the introduction that you recognize it is a legal product and that it
should be used by adults only. You favour education aimed at minors and you are
part of a coalition fighting tobacco sales to minors. That is how we have to
reduce the demand, but you say the demand is there. I want to know what you
Mr. Dumulong: The coalition of which we are a part has launched a Canada-wide
program called "Operation ID". It is a program aimed at retailers. We
want to ensure that retailers sell to those who are of legal age to buy
tobacco, perhaps 18 or 19.
Thus far, we have ordered 30,000 kits in which are found posters and little
booklets setting out how to train employees and how to set up a retailer's
practice or policy for their employees. The kits set out how to deal with
situations which are sometimes not always easy to deal with, especially when you
have 17-year olds who are six feet tall who come into a shop and ask to buy
cigarettes from a clerk who is 16-years old. If a policy is established at the
outset, then everything is clear.
Mr. Tobenstein: My personal view is that the biggest problem is enforcement at
the retail level.
Senator Cohen: That was my next question.
Mr. Tobenstein: We are trying to do our part to educate retailers. However, that
will not be the whole answer. I have always felt that the laws have to be
enforced. Fines should be enforced by the government, which will ensure that
retailers are not selling to minors. This is the whole crux of the matter.
Much of the feedback we have had is that advertising is directed toward minors.
It is easy to get the merchandise; they can go and buy it. If they are not
allowed to buy the merchandise, if retailers will not sell to them, then this
would cover the whole problem. After that, we would see what would happen.
We are trying to do our part to educate the retailers. Unless there is some
enforcement, it will not go all the way.
Mr. Dumulong: Fines of up to $50,000 can be levied against a retailer when he
sells to minors. In most instances, this is a call for bankruptcy for a small
corner store retailer.
Senator Cohen: He also knows that the enforcement is very weak.
Mr. Tobenstein: If there is enforcement, the whole picture changes.
Senator Bosa: I agree that increasing prices will encourage smuggling and the
product will be on the market at a reduced price. Did I understand you to say
that a carton of cigarettes can be bought for $1?
Mr. Dumulong: Yes. In South America, you can buy a carton of cigarettes for $1.
Senator Bosa: They then have to be smuggled into the country.
Mr. Dumulong: Yes. As you know, it is the longest unguarded border in the world.
Senator Bosa: That is the border between Canada and the United States. If the
product is coming from South America, they have to go either through the United
States or the Pacific Ocean or the Atlantic Ocean.
Mr. Dumulong: That is very easy. We all know that our borders can be penetrated.
As much as we want to make them as safe and as tight as possible, it is very
Mr. Tobenstein: I see your point. You have a good point there. However, I know
at the time of the contraband that other brands were being produced. I think
they were maybe being produced by the Indians. One was Putters and there was
another brand as well.
Mr. Dumulong: DKs.
Mr. Tobenstein: They were not just plain packaging. They were a knock-off. They
were selling much cheaper, and people were lining up to buy them.
When the price is outrageous and people have to pay $45 or $50 to buy a carton
of cigarettes and someone comes to sell them a carton for $25, even though they
know it is illegal, they feel justified because they think they are being
ripped off. It is okay to do it. When the prices are brought down to $20, if
they can buy the cigarettes for $16, they say, "Well, I might as well stay
with the legal stuff. Why go and buy this stuff if I can get the stuff at a
In the western part of Canada where the prices are much higher than the eastern
part, there is a lot of cross-border smuggling. There is a mail system in
Newfoundland and British Columbia. Cigarettes are being put through the mail
five cartons at a time at $25 or $30 a carton. They are Ontario and Quebec
products because they are much cheaper. There is a big interprovincial problem
from Ontario to Manitoba. There is a tremendous amount of stock going across
Senator Bosa: You said before that tobacco is available on the market if someone
wanted to buy it. Is there any evidence that there is any illegal manufacturing
in Canada and then they are sold through the black market?
Mr. Dumulong: I am aware of a production facility on the Six Nations reserve.
They are producing and they are making money. How much of a dent is being put
in the market? It is not very much. It is highly profitable for them, but no
one is going on the reserve. The army is not even going on the reserve.
Senator Bosa: Are you ever consulted by the tobacco manufacturing companies on
the kind of products people favour? If so, have you ever pointed out that this
is contradictory to what they say and what they put on the shelves? They say
they discourage minors from smoking, but then they put those little packages of
10 cigarettes on the market. They are very attractive for young people and
teenagers to buy.
Mr. Tobenstein: There was a 15-pack, I believe. There was some company making a
5-pack as well.
Senator Bosa: Teenagers buy them, do they?
Mr. Tobenstein: The reason they came out with these formats was because of the
price. It was so expensive that they were trying to come in with a better
price. A pack of cigarettes was selling in Quebec for over $7 during the time
of the contraband. When they came out with that, it brought down the price to
maybe $4.50 where it was easier to sell to people. They could buy a smaller pack
because they did not have to put out so much money. I do not know if they had
any other reason for it. I do not know think it was aimed at minors, but I
think it was because of that reason.
Mr. Dumulong: The point you raise comes back to the issue of compliance at
retail. If retailers do not sell to people 18 years and younger -- or 19 years
and younger, depending on the jurisdiction -- the problem is not there any
more. At 19, if a person decides to smoke, it may be because they are
considered old enough to buy firearms, drive a car or even vote for a prime
minister. It comes down to a matter of compliance at the retail level. We are
working diligently now at making sure that everyone includes in their policy at
retail the idea that as soon as there are doubts, there should be proof of
valid ID. We show them how to recognize fake IDs and how to deal with this
situation. We say, "This is our policy; I am sorry, we cannot sell you
cigarettes!"We de-personalize the transaction. It has been proven time and
time again that as soon as ID is required, sales to minors drop like that. The
word goes around very quickly among the 14- and 16-year-olds. "Don't go
there; you are going to be carded; you are going to be IDed. "Word travels
Mr. Tobenstein: We are trying to do our part the best we can. I think there has
been some enforcement out there. I have heard of some stores receiving fines.
It is of great concern out there especially to banner stores, which are chain
stores. Health Canada is going after the head office and saying, "Your
stores are selling to minors." They are quite concerned. We have had some
calls at the office about that.
The Chair: I asked you the question about counterfeit cigarettes. In your
explanation, you said that cigarettes were available. You could buy them and
then someone would package them and they were sold. However, you did not tell
me from whom you buy. I think you said you could get them in Canada. From whom
do you get those cigarettes in Canada?
Mr. Dumulong: There are different sources. According to Mr. Inkster from KPMG --
he researched this with us -- he found that there were several sources of
supply. You can purchase from local sources. There are local sources such as
some non-law-abiding tobacco growers. They could grow a surplus amount of
tobacco and sell it under the table. That would be a source. Another source
would be from a foreign source. The tobacco I was referring to earlier is grown
in many countries. It can be bought on the international market very easily.
The Chair: But not from any of the tobacco companies.
Mr. Dumulong: No. The tobacco companies, because they are under such great
scrutiny all the time, must do things by the book. I doubt very much that they
would grow that way.
Senator Bonnell: My question is very simple. You say that you have been doing a
lot with the retailers. You were going to dig there for a while and tell us
what you were doing. Can you dig a little deeper and send us a copy of what you
are sending to the retailers so the clerk and the committee members can have a
Mr. Dumulong: It will be my pleasure to send you a whole package.
Senator Bonnell: Send us a whole package so each member of the committee can
have a copy.
Mr. Dumulong: It is highly visible. The program is called Operation ID. There
are stickers and danglers hanging in stores. If you were born after 1978 or
1979, you cannot buy tobacco products.
Senator Bonnell: Send us the danglers, posters and everything. Your talk is one
thing and your actions are another.
Mr. Dumulong: It would be a pleasure.
Mr. Tobenstein: We have not received them yet, but distributors like myself will
be giving them to our customers.
Senator Bonnell: You do not have them yet.
Mr. Dumulong: We just launched the program on Monday.
Senator Bonnell: Well, this is Wednesday. What happened in the last two days?
Mr. Dumulong: I was preparing my submission.
Mr. Tobenstein: I ordered these pamphlets months ago, so I am just waiting for
Senator Bonnell: Well, we are ordering them today.
Mr. Dumulong: Tomorrow you will have them. You will have them before the end of
the week. That is a promise.
We are promoting that package. We are promoting law obedience, actually. It is
like mom and apple pie. Who could be against that?
Senator Haidasz: You stated that if you did not have tobacco products to sell in
your stores, your stores would go bankrupt.
Mr. Tobenstein: Not our stores; our distributors. Eighty per cent of my business
in dollars terms is tobacco products. The more I try to get away from that and
diversify, the more tobacco I seem to sell. It is very strange.
Mr. Dumulong: Some retailers do 40 to 50 per cent of their total annual business
in sales of tobacco. If you cut 40 per cent off your total business, the boat
does not float any more.
Senator Haidasz: I am sure you are aware that many people are against the
selling of tobacco to children and young teenagers. Do you not feel guilty that
you are selling a product that will eventually kill people or cause them to
suffer from a chronic tobacco-related disease, which will cost Canada $17
billion a year?
Mr. Tobenstein: I have spent over 27 years in this business. I have worked
honestly and hard to get where I am today. I am disgusted that it is now almost
a crime to do what I am doing. I do not do anything wrong. I am selling a legal
product and I am selling it honestly. I do not smoke myself. None of my
children smoke, nor does my wife. I do not think it is something that people
should do, but I believe that people should be able to decide for themselves.
As long as it is a legal product, someone has to sell it.
Senator Haidasz: I notice in your recommendations that you say Bill S-5 should
be dropped because of lack of evidence as to its effectiveness. Yet, you
present no evidence to support that in your brief. How did you come to that
Mr. Dumulong: We think that the impact of such a law would be detrimental to the
Canadian economy. We are not aware of any study substantiating the assertion
that you will eliminate demand by putting a product on the market which is not
in line with consumer expectations.
Mr. Tobenstein: We saw what happened before. Establishing the levels of tar and
nicotine that you are suggesting would eliminate all tobacco products except
two brands of cigarettes which are a very small part of the market. I think
that people would look for other products, and the distribution network in
place could handle that. It would mean that our members would have a pretty
tough time staying in business. That void would be filled very easily.
Senator Haidasz: My only criticism of your brief is that you state there is no
evidence as to the effectiveness of Bill S-5 in protecting the health of
Canadians, yet you produce no evidence.
The Chair: Gentlemen, thank you very much for attending here tonight. We do
appreciate it. We are pleased to hear the other side of this debate.
The committee adjourned.