Proceedings of the Standing Senate Committee on
Social Affairs, 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 health sense.

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.

Yes, sir?

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 does neither.

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 by smoking.

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 cigarettes.

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 available nicotine.

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 tars"...

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 tobacco smoke?

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 advantage.

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 clearer.

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 find out.

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 than inaccurate.

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 your point.

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 two.

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 Canada?

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 tobacco smoke.

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 cigarette?

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 measuring colour.

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 is going?

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 the year.

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 research.

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 tobacco.

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 professor emeritus.

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 with.

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 company.

Senator Bosa: Do you do all sorts of research, or are you confined to research in tobacco?

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 cigarettes.

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 information.

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 the cigarette.

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 that process.

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 fail.

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 few.

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 introduced.

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 questions.

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 you, senator.

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 mentioned, senator.

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 contraband tobacco.

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 them.

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 downward.

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 500.

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 industry.

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 children.

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 technology now.

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 collapsed?

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 contraband.

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 Friday.

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 European.

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 it.

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 competitively sensitive.

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 it.

"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 with them.

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 Haidasz requested.

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 than that.

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 America?

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 street.

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 carton.

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 have done.

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 difficult.

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 reasonable price?"

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 the border.

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 fast.

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 copy?

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 them.

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 conclusion?

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.