Proceedings of the Standing Senate Committee on
Legal and
Constitutional Affairs
Issue 52 - Evidence
OTTAWA, Tuesday, April 1, 1997
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-71, to regulate the manufacture, sale, labelling and promotion of tobacco products, to make consequential amendments to another Act and to repeal certain Acts, met this day at 1:00 p.m. to give consideration to the bill.
Senator Sharon Carstairs (Chair) in the Chair.
[English]
The Chair: Good afternoon, senators. Professor MacKay, who was to be with us this afternoon, has been caught in a snowstorm in Halifax. However, we have with us, to our great pleasure, Professor William Schabas from the Universite du Québec à Montreal.
Our second group of witnesses this afternoon are representatives of the Canadian Tobacco Manufacturers' Council.
Senator Jessiman: Have you read this document, Madam Chair?
The Chair: Yes, I have.
Senator Jessiman: Will we consider it at all?
The Chair: It has not been our practice to subpoena witnesses. There has not been a great deal of disagreement among the senators on both sides of the committee as to the dangers of smoking. I cannot think of anything else we could ask those witnesses. They may deny there are dangers, but I think we all accept there are dangers. I do not see any particular advantage in subpoenaing witnesses at this point.
Senator Jessiman: Not only will the tobacco council be here, but counsel for the various companies will be here as well. We can ask them.
The Chair: Exactly.
Professor Schabas, please proceed.
Professor William Schabas, Université du Québec à Montreal: Before beginning, I should say that I received the transcripts of the previous hearings over the last few weeks. They were kindly sent to me by the staff of the committee. I will try not to repeat what other professors have said. I will try to address some of the points that did not come out of their testimony.
People question what is proposed in this legislation. I can see this very clearly as well from your comments. The legislation leaves an enormous amount to the regulations. On several of the points that were knocked down by the Supreme Court in the RJR decision, the route taken by the drafters of this new bill is to leave those issues to the preparation of regulations rather than have them addressed in the legislation itself. I am aware that this has been criticized before this committee. It strikes me that there is considerable interest in doing that because it gives the kind of flexibility that may be necessary to get around some of the constitutional issues dealt with in the decision of the Supreme Court. It will perhaps enable quick fixes to be made, if provisions are challenged, by fine-tuning the legislation. We are in a situation where the legislation must be fine-tuned so that it does not violate the charter.
In reading the RJR-Macdonald case and the transcripts of the testimony before your committee, some of the fine points raised by lawyers were skipped over a bit quickly. The first thing to keep in mind is that that decision was made by five judges to four. That is a pretty close majority. It really means that you have to convince only one judge to lean the other way and your legislation will pass scrutiny by the Supreme Court of Canada.
Furthermore, you must keep in mind that of the five judges in the majority, there were two different judgments. One of them was considerably more sympathetic to the legislation and may be more of a swing vote if the matter comes up before the Supreme Court again.
It is clear that Justice McLachlin was quite severe with regard to the legislation, as she has been generally with freedom-of-expression matters where she has sometimes been for the majority and sometimes for the minority. Her view has been very protective of freedom of expression. It is close to the view of the United States Supreme Court, which is one of absolute freedom of expression.
However, her reasons are formally endorsed by only one of the other justices of the court, Justice Sopinka. The other reasons for the majority are those drafted by Justice Iacobucci. In the past, he has not only been considerably more tolerant of limitations on freedom of expression than Justice McLachlin, but he also gives, not a blueprint exactly, but several guidelines on how the legislation can be readjusted so that it will pass the scrutiny of the Supreme Court. His reasons are supported by the Chief Justice.
If the legislation goes back to court, the justice you must convince is Justice Iacobucci. Four justices are obviously already sold on the legislation. They were happy with the absolute prohibition that we find in the previous legislation which was struck down. Of the five in the majority, then, there are two separate sets of reasons. You also have Justice Major. He is in dissent on the issue of the criminal law power.
I think the situation is not as absolute or as grim as has been portrayed. In his decision, Justice Iacobucci says you need a bit of tailoring to get the legislation past the court, but only just a bit. That should be kept in mind in assessing this legislation vis-à-vis the legislation that was struck down. It seems to be a matter of slight adjustment to make it acceptable to the court. In a general sense, I think that what is being done in this legislation meets that condition.
You heard in previous testimony about the famous Oakes test analysis of section 1 and the various steps or stages in that analysis, of which the two most important involve the questions of rational connection and minimal impairment. When the court does its analysis of legislation under section 1 of the Charter, it first looks at the issue of rational connection. If it passes that test, the court goes on to consider minimal impairment.
My reading of the judgment of the Supreme Court in RJR-Macdonald is that Justice Iacobucci agreed that the legislation met the rational connection test. In some of your deliberations, there has been some concern about whether the previous legislation met the rational connection test. You have a majority. Six judges of the Supreme Court in the RJR-Macdonald decision felt that there was no problem with the rational connection test. Where Justice Iacobucci finds a problem in the legislation is on the minimal impairment issue.
On the minimal impairment issue, a great deal of the difficulty in the Supreme Court of Canada dealt with the issue of proof and evidence. There are two or three comments to be made here.
On the question of evidence, it can always be a little different the next time in court because a lot of it was put before the trial judge. It was not evidence submitted to the Supreme Court, so it was not tested before the Supreme Court. It went before a trial judge in Montreal. If the case comes up again, the evidence could be a little different.
The other issue relates to something found in both sets of reasons of the judges of the majority on the court. The judges were clearly irritated with the fact that the federal government had not presented its own report on the question of how to respond to problems the legislation was attempting to address. It was clear that such a report had been prepared. That report contained analyses of other strategies on how to deal with the problem and strategies that fell short of a ban on publicity. What bothered the justices of the court was that this might have helped their assessment and their appreciation of how to deal with the test of minimal impairment. Clearly, if the government has documents indicating that you may do just as well with something that impairs freedom of expression less severely, less strictly or less absolutely, that would help the court come to the conclusion that perhaps this is the way to go.
When I was considering this issue for my testimony before your committee, my thought was that maybe that kind of material ought to come out at this stage and not even be left to get to court. In other words, this might be the appropriate forum, during examination of the legislation by Parliament, to say to the government, "Listen, put the studies before us so we can examine them and assess whether we are really addressing the minimal impairment test."
It is very clear from the reasons of both Justice McLachlin and Justice Iacobucci that they were disturbed by that fact. Justice Iacobucci says at one point that when the government has to defend legislation before the Supreme Court of Canada, it must be absolutely transparent. All the information and all the relevant materials that it has that can help the court to come to an assessment of the minimal impairment test should be presented by the government, and it should not withhold material. Perhaps that can be addressed even at this stage in the proceedings.
I realize that you do not like to subpoena things, and I am not sure whether it is appropriate, but it certainly might be nice when the minister returns here to ask him to present that material to you.
When I was first asked to testify, it was mainly on the issue of freedom of expression, but three of the points that have come up before the committee raise constitutional issues. The first is the question of vagueness. A lot of the comments that were made before you dealt with the problem of vagueness in the legislation. My own opinion is that the vagueness issue is considerably overblown in Charter litigation. It is argued regularly before the courts and almost never succeeds. It succeeded really only once, and that was in a very Draconian provision of the Criminal Code dealing with provisional release of people who had been detained awaiting trial. While it is frequently argued by lawyers, the courts generally knock down those arguments and say, "Legislation is sometimes vague. That is what judges are for: to interpret it." There is something inherently vague about legislation that you just have to leave to the courts to interpret. This argument arises almost every time new legislation is proposed, but certainly from a Charter standpoint it should not be a serious concern. From the standpoint of legislative policy, I can appreciate that perhaps Parliament may feel that it is in its interest and is part of its role to see that legislation is as clear and coherent as possible.
The second point that came up in the testimony over the last few weeks dealt with the so-called reverse onus provision, namely, clause 53 of the draft legislation. In effect, paragraph 2 of clause 53 eliminates the notion of reasonable doubt in prosecutions under this bill. That means that in submitting defences at any point in these cases, an accused will not have to raise a reasonable doubt but will have to prove innocence. That is a far-reaching provision. I am not aware of many provisions that strong in our criminal law. To get such a provision past the Supreme Court, you would have to demonstrate that the prosecution absolutely needs it in order to obtain convictions and that it cannot enforce the legislation without it. What the courts have done -- and the Supreme Court did this in a recent case -- is read down this kind of provision by saying that maybe it was all right to impose a burden on an accused to raise a reasonable doubt but it was going too far to impose a burden on an accused to prove innocence. The distinction is an important one. The Supreme Court said that if all you are doing is allowing someone to raise a reasonable doubt, you are not violating the notion of proof of innocence beyond a reasonable doubt, and therefore, you are in accordance with the law. The Charter provisions that are raised by this are sections 11(d) and 7.
Finally, in your discussions, there were references on several occasions to the International Covenant on Civil and Political Rights and the notion of derogation and that this legislation was in some sense a derogation. With respect, I think that is not quite the term that you want to be using in referring to the legislation. We are talking here about limitation of legislation, not derogation. We do have derogation in the Canadian Charter. That is found in section 33, the notwithstanding clause. That allows the suspension of legislation under terms with which you are all familiar. That would be one way Parliament could get around the Supreme Court on this legislation, although I do not think it is anything that anyone suggests very seriously. If Parliament were to do it, Parliament would probably find its legislation challenged, not before the Supreme Court because that would be impossible, but before the human rights committee which has been set up under the international covenant. That is what happened with the changes to Bill 101 that the Quebec government introduced following the court decision, and that could happen here. That is not really a serious suggestion.
The other issue -- and what you are really talking about -- is limitation of rights. There are corresponding provisions in the International Covenant on Civil and Political Rights, but they are not the ones you were referring to in the discussions over the past few weeks. In the international covenant, when they talk about freedom of expression, rather than have a general limitations clause as we have in section 1 of the Canadian Charter, they have a very specific provision in Article 19 of the covenant that deals with permissible limitations on freedom of expression. It is quite a large clause that recognizes that freedom of expression can be limited in a number of circumstances, including good public order, health, reputation of others and hate propaganda. These were the provisions that were cited as a defence before the Supreme Court and adopted by the majority when the hate propaganda legislation was challenged.
I would be delighted to answer any questions that you might have.
The Chair: Thank you very much. We have a number of senators who have already indicated they wish to ask questions.
Senator Beaudoin: I agree with you that it is a question of onus of evidence. Obviously, freedom of expression has been interpreted in a broad way by the Supreme Court of Canada. Certain provisions of this bill restrict the freedom of expression, but the debate does not end there. The test is: Are those restrictions acceptable or reasonable in a free and democratic society? The whole debate is there, as far as the Canadian Charter of Rights and Freedoms is concerned. I will leave out the presumption of innocence for the moment, although I may come back to it later.
As the basic problem, are those restrictions on the freedom of expression reasonable and acceptable in a free and democratic society? It is true that two judges, Madam Justice McLachlin and Mr. Justice Iacobucci, were not satisfied with the evidence that was produced. If ever this bill is challenged in court, the court may have the same problem.
The objectives of the statute are certainly quite acceptable. You put your finger on the minimal impairment test. It may be that everything is proper as far as the Charter is concerned. There is no doubt that it is on the shoulders of the government to prove that it is reasonable in a free and democratic society. We agree with the mechanism. We agree with the Oakes case. We all support freedom of expression. As an expert, where do you stand on the question of whether we have a minimal impairment test in this case?
Mr. Schabas: If I understand your question properly, you are asking me to pronounce myself on the issue of the minimal impairment.
Senator Beaudoin: Yes, but not personally. You are here as an expert.
Mr. Schabas: My view is that there is no serious problem. I think the bill meets the test. There is an issue of proof involved, and that is a bit speculative at this point because we cannot take for granted that the same type of proof that was made in the previous case will be made the next time.
However, let us assume that the federal government has kept all the cases of documents that were filed the last time and that it will bring them all back. Judging from what I read in the decisions, it would appear that that issue will not be a problem. I say that subject to the caveat of the concerns of the two justices who complained that the federal government was not entirely forthcoming with the reports it had.
If the federal government does have and does present such reports, argues that the approach taken by the legislation is legitimate and attempts to find an approach that solves the problem while at the same time taking the issue of impairment into account in a reasonable way -- and the courts have been increasingly liberal on this in recent years -- I do not think there will be a problem.
Senator Beaudoin: This is not the first time that we have seen a reversal of the presumption of innocence. In accordance with your principle, is it reasonable and acceptable? If I understood you correctly, you conclude that the reversal of the presumption of innocence, compared with other cases before the Supreme Court and compared with other statutes, is acceptable.
Mr. Schabas: Senator Beaudoin, I am troubled by that reverse onus provision in the legislation. My concern is that it must be demonstrated that that form of reverse onus provision is necessary in order to enable prosecutions under the act. I do not believe that I have the information to be able to judge that sort of thing.
On the other issues raised by the legislation we have the benefit of all the decisions in the RJR-Macdonald case. We can look at them and assess whether the evidence is sufficient on minimal impairment.
When I first read clause 53(2), I was struck by how far-reaching it is in terms of a reverse onus provision. The famous Oakes case, from which the test comes, is a reverse onus case. There have been a long series of reverse onus cases.
There are two kinds of reverse onuses. There are those that require the accused to prove innocence or to prove some factual element. Here it is very broad. There are, as well, reverse onuses where the accused need only raise a doubt.
If this is ever challenged before the Supreme Court, the court may well not knock down the legislation but trim it down and turn that reverse onus, which imposes a burden to prove innocence, into a burden only to raise a reasonable doubt. Certainly in the absence of a demonstration that clause 53(2) is necessary for prosecutions to succeed, I would be concerned about it.
Senator Beaudoin: But again, if I follow your reasoning, it is up to the government to bring evidence that it is necessary. That is the test.
Mr. Schabas: Yes.
Senator Beaudoin: We will have the occasion this afternoon and tomorrow to talk a little more about it, but it is a question of necessity.
Mr. Schabas: Absolutely. Those kinds of provisions can survive Charter scrutiny.
Senator Beaudoin: Oh, yes. They did in some other statutes. There is no doubt about that. However, again, it is up to the government to establish that it is necessary.
Mr. Schabas: Yes.
[Translation]
Senator Nolin: I assume that since you are a professor at the Université du Québec à Montreal, you speak French. I have three points that I would like to discuss with you. I admit that I am not one for details. Clause 3 of the Bill stipulates that this Act is binding on Her Majesty in Right of Canada or a province.
Senator Beaudoin: Or provinces.
Senator Nolin: I would assume that this means all provinces. What is the reason for including this provision? I looked through the Criminal Code to see if there was a similar provision and I found none. Why is it included here?
Mr. Schabas: You have me there. As a rule, provisions like this are included to make it easier to institute legal proceedings against the Crown.
Senator Nolin: That is why I looked for a similar provision in the Criminal Code.
Mr. Schabas: I do not believe you will find one.
Senator Nolin: You can correct me if I am wrong, Senator Beaudoin. Since we all agree that the federal Crown has resorted to the criminal law power, there is no need to restate in the Act that this power will apply to a province.
Senator Beaudoin: There are some precedents.
Senator Nolin: It was a relatively minor point. I would like to come back to the notion of "minimum impairment". What is the French equivalent?
Mr. Schabas: "Atteinte minimale".
Senator Nolin: You state that with Bill C-71, the federal government appears to have understood the Supreme Court's ruling in RJR-Macdonald and modified the intent of the legislation so that in other words, the minimal impairment test has now been met.
You say that there is a question of proof tied to all of this. I think, and you can correct me if I am wrong, that it is not simply enough for the Crown to table stacks of documents showing that it has considered less harmful alternatives. The Crown must also prove that these alternatives are not as effective as the course of action chosen.
Is this not tied also to the minimal impairment test?
Mr. Schabas: You are quite right. Minimal impairment must be proven. Evidence must be adduced and the court is increasingly intolerant of constitutional challenges submitted when evidence is lacking. We learned early on in the process that when making a charter challenge, it is necessary to present evidence.
When the case was debated before a trial judge in Montreal, he was presented with stacks of documents. This evidence is absolutely critical. I assume that the federal government had an enormous amount of evidence on this matter. It chose, however, not to table a report on the various choices or alternatives to the option retained in the legislation challenged in RJR-Macdonald.
This matter prompted comments from two of the judges in the majority. Hypothetically, if the new legislation is challenged, the problem may arise again. Justice Iacobucci stated that court demands transparency from the federal government when it comes to legislation. The report assessed the different options.
Here again, I assume that this legislation is the end result of studies and results. I think the court will want to evaluate them if ever the matter is challenged before the Supreme Court after a new law is passed.
Senator Nolin: That is not the only thing that is required. The analysis is such as important. It is not enough to say that yes, I have weighed all of the alternatives and I find that the fundamental rights of certain companies must be affected.
Mr. Schabas: The report must show that this is a reasonable option. The point I wanted to stress in answering Senator Beaudoin's question is that the court no longer requires that this be the only or best choice or the optimal hypothesis. The court requires that this be a reasonable option and an appropriate one under the circumstances. The government can table a report stating that there are a certain number of options that satisfy the legislation's objective. To use a popular expression, the government can say it opted for plan B rather than for plan A.
Senator Nolin: The minister stated during the course of his testimony that he had instructed the drafters to come up with a bill which would not be struck down in its entirety should the courts deliver a negative ruling. Could you explain further to me how a law can be drafted to withstand a court challenge?
Mr. Schabas: When the previous law was debated before the Supreme Court, the justices did not seem particularly bothered by some of the provisions which ultimately were declared unconstitutional. I am referring here to the two majority rulings by the Supreme Court, in particular regarding section 6 pertaining to sponsorship activities and the like. The court held that the provisions which were unacceptable were too closely linked to those which were somewhat less offensive. It decided to quash a series of provisions, namely sections 4 to 9. Section 9 concerning cigarette package labelling was debated at considerable length by the court. So too was the issue of advertising. Sponsorship promotion did not pose a problem as the court ruled that this issue was part of a whole and could not be dealt with separately. In my opinion, the court's thinking was rather superficial on this point. It did not give many explanations for its interpretation. It seemed to feel that it was a matter of common sense and that it was abundantly clear that we were dealing with a whole bill designed to address certain problems and that certain provisions could not be taken out.
When we look at the bill, we see that some of its provisions are drafted in a rather curious fashion. I assume that the purpose here is to address the concern for severability.
Senator Nolin: Could you give us some examples?
Mr. Schabas: Consider clause 24(1).
Senator Nolin: According to clause 24(1), sponsorship promotion is permitted. Is that right?
Mr. Schabas: Yes. It is rather odd. When I first read the bill, I looked for the provision which said that no promotion targeting young persons was permitted and here, we see the opposite stated. I think that we can do away with clause 24(1) and subclauses 2 and 3 remain...
Senator Nolin: They continue to prohibit sponsorship promotion.
Mr. Schabas: Yes. Even if clause 24 is inadmissible, subclauses 2 and 3 may survive and vice versa as well. This is one example in the law of a rather complex piece of drafting. I am left to wonder about the ordinary citizen who tries to understand something by reading clause 24. I believe consideration was given to the possible scenario of the severability of certain provisions.
Senator Nolin: In light of what you have just told us about the drafting of clause 24, and about this theory whereby a vague law is questionable, you who are the expert have some difficulty finding a common element in the drafting. You also indicated that an ordinary citizen could have some problems finding his way through the act. Referring to the theory advanced in Hogg, and all authors have dealt with it, would you not say that the vagueness theory might apply in this case?
Mr. Schabas: Just because a law is complex does not necessarily mean that it is vague. Taxation legislation is extremely complex and technical, even incomprehensible. Clause 24 cannot hold a candle to some of the provisions in the taxation legislation which despite their vagueness, are not unconstitutional. We must remember that in a regulatory context, there is always a certain amount of contradiction that arises with respect to freedom of expression. This is not true of all regulated industries, but up to a point, it is impossible not to adopt an approach focussing on details, technicalities and regulations, as was done with this bill. In my view, vagueness is not the issue. This is a complex piece of legislation which will be interpreted by tobacco company lawyers. The act is not expected to be challenged by ordinary citizens, as very few of them will read it and work with it. This legislation targets an industry which is already regulated and which has the resources to implement and comply with the various provisions of the legislation.
[English]
Senator Lewis: Professor, what you had to say about the RJR-Macdonald case was interesting. I take it you will agree that as far as the final judgment is concerned, much will depend on the actual issue put before the court and, of course, the evidence which is adduced. Bearing that in mind, would you agree that, at this stage, it is very difficult for anyone to try to second-guess a court without knowing the actual issue that will be put before the court and the evidence that will be adduced? Do you feel at this stage that is a very difficult proposition?
Mr. Schabas: The RJR case was an application for a declaratory judgment by the two tobacco company petitioners. While they may attempt to address the question the same way with new legislation, it does not seem obvious that they would go that route, partly because many of the questions as to the application of the law will not be found in the law itself but in the regulations. I suppose that approach cannot be excluded as a possibility.
However, when you go for a declaratory judgment you are asking very general questions of the court. In a sense, you are asking for an analysis of a number of provisions, in the absence of prosecutions and in the absence of the kinds of precise facts that normally make for a debate in court. It is certainly a recognized, legitimate approach to ask for declaratory judgments on legislation.
I think what you are referring to, Senator Lewis, is the possibility that this may arise in another context, that is, with prosecutions. Clearly, if a prosecution takes place because one of the tobacco companies has not respected one of the provisions, then the challenge will not be to the legislation as a whole, but just to the precise provision involved.
I do not know if that answers your question exactly. Certainly, that is how the facts would arise, depending on the form the challenge to the litigation takes. If, for example, there is a challenge to clause 53(2), the reverse onus clause, it will be by some shopkeeper who has been charged. He may have some powerful lawyers behind him that he cannot really afford but who will be paid by someone else. Nevertheless, that will arise from a prosecution of an individual shopkeeper.
Senator Lewis: I am thinking more from our point of view in looking at this and making up our own minds.
Mr. Schabas: I am not sure what you are looking for.
Senator Lewis: Will this committee make a report on the bill along the lines of whether it is unconstitutional in general?
Mr. Schabas: In a sense, you are in the same kind of position as the Supreme Court. There is a useful analogy. You must look at this legislation to assess whether it does respect the Charter, and you must go on evidence that is presented to you or justification given to you by the minister or the government. To that extent, yes.
The fact that you yourselves are satisfied that this does meet the minimal impairment test, that other options have been considered, and that that has been done in an appropriate manner will be important in terms of surviving scrutiny before the court, as I said earlier.
Senator Lewis: I take it the question of burden of proof was not dealt with in this particular judgment?
Mr. Schabas: No, not at all. It did not arise. I cannot off the top of my head tell you whether there were provisions in the former legislation similar to what is in clause 53.
Senator Lewis: My understanding is that there was a similar provision in the Tobacco Products Control Act. The court ruled on certain sections, but apparently it did not rule on the reverse onus.
Mr. Schabas: That is correct.
Senator Lewis: It is interesting to note that there is a similar provision in the Criminal Code, section 794, so apparently that is acceptable.
Mr. Schabas: The fact it is in the Criminal Code does not necessarily mean it is acceptable.
Senator Lewis: It is there, though, and it was in the Tobacco Products Control Act, which is the act upon which the court was giving the declaratory judgment. Apparently, there is a similar provision in the Food and Drugs Act and in some provincial statutes. It does not appear at this moment that there is any particular objection to that particular type of clause.
Senator Jessiman: He said that the onus is on the government to prove that it is necessary.
Senator Lewis: You could say that about any provision in a bill.
Mr. Schabas: The reverse onus provisions, since the Charter came into force in 1982, have been attacked rather systematically. Many of them sit in statutes for many years as a time bomb waiting to go off, and they can sit there for 10 or 15 or more years before facts arise where you have an accused who decides to raise a question and come before the court. That is speculation. That type of clause survives sometimes but gets knocked out or knocked down on other occasions. The fact that you can find models for it in existing legislation does not mean that the Supreme Court or a lower court will not find the legislation to be suspect and contrary to the Charter.
If it is challenged under the Charter, under the same type of reasoning as you have heard on the question of freedom of expression, because this is clearly a violation of the presumption of innocence, you go immediately to section 1 and go through the same analysis. Ultimately, you end up asking the same questions of rational connection and minimal impairment.
Senator Lewis: At the moment, there is no ruling on that.
Mr. Schabas: That is right.
Senator Lewis: We have been told that the present bill has been drafted paying particular attention to the rulings and observations made by the Supreme Court. Do you have any views on the result? Have you looked at the present bill to determine if it does comply with the matters mentioned in the court's rulings?
Mr. Schabas: Yes, I have, and I believe that it does. I could refer you particularly to Justice Iacobucci in paragraph 72 of the judgment. He indicates it is a rather exceptional measure, but he clearly recognizes the importance of the legislation and the need for having it. He says, "Here are some of the things you could have done, and it would probably have been acceptable." It is a clear signal.
Justice Iacobucci was even in favour of suspending the effect of the finding of unconstitutionality to permit the government to tailor the legislation more finely and to permit Parliament to come up with something that was a little less intrusive on Charter rights. He gives examples such as health warnings on packages and says they should be attributed to their author, in all likelihood Health and Welfare Canada. It is not spelled out as clearly as that in the draft legislation, but it seems to me that is how the problem will be resolved. He talks as well about advertising and says that perhaps the advertising should be regulated in the way alcohol advertising is regulated. It is clear that to me that that has been taken into account. The Supreme Court sent these very helpful signals to parliament, and I think that the legislation answers and addresses them.
Senator Jessiman: You said that the burden was on the government to prove that they needed the reverse onus provision. Do you feel the same about clause 35(1) which allows entry without warrant into other than a residence under very general conditions, and clause 39(1) which allows seizure of tobacco products without warrant? Would the government be required to satisfy the court that under certain circumstances this was justified, or do you think it is justified?
Mr. Schabas: As you are well aware, those are provisions that could be challenged, likely under section 8 of the Charter.
Senator Jessiman: What is your view?
Mr. Schabas: They do not shock me. They seem comparable to provisions we find in this type of legislation and that have generally been allowed to survive. We allow electricity and water meter readers to come into our houses as well to check for things. That type of provision is allowed, particularly because it is not, as they point out, involved in prosecution in a direct sense.
Senator Jessiman: Therefore, even though it can be challenged, it is your view that this would probably stand?
Mr. Schabas: My opinion is that you do not have a serious problem with those provisions.
Senator Doyle: I have been taking the odd note of your comments about the nature of the beast. Some of your remarks lead me to accept what you said -- at least what I believe you said. You seemed to say if the law seems deliberately vague, that is because that is what was intended. Is that an exaggeration of what you proffered?
Mr. Schabas: I do not know if this will be transcribed, so perhaps I will say the opposite of what I said the first time.
Many pieces of legislation are inherently vague. When we read legislation and have trouble understanding what it means, we say it is vague. That is why courts exist: to explain and to clarify it to some extent. Again, the problem with this legislation is not vagueness. As I said in answer to Senator Nolin's question, it is much more a question of technically complex legislation than vague legislation. You can look through practically any piece of legislation and find provisions that are somewhat vague. Those types of provisions have not, by and large, had any problem with the courts, from the point of view of the Charter, although the legislature adopting it may be uncomfortable with the idea that vague legislation is being adopted. Adoption is a political decision. However, you do not really have a serious problem from a Charter standpoint.
Senator Doyle: Yet you say that there are parts of the legislation that may stand for 15 years without being challenged, probably because the person who might be inclined to challenge it cannot afford to challenge it. You do not do that with nickles and dimes. However, at the end of 15 patient years, someone does prove that, yes, that particular clause was vulnerable. What about all the people who had missed whatever their rights may have been in that interval simply because it sat there?
Mr. Schabas: Times also change and evolve, and legislation that is not shocking when it is adopted may, 20 or 25 years down the line, be more debatable before the courts just as a result of evolving attitudes.
There are many provisions in the Criminal Code that have, over the years, come under much closer scrutiny because our attitudes towards things have changed. We now have effects from the Constitution and in particular the Charter. That is not only natural but desirable.
Senator Doyle: That is what we call progress, and I have no problem with progress. However, you were talking about the law that sat there and you did not suggest the circumstances had changed; you simply suggested that because no one went after it, it sat there. That was what worried me.
One of the purposes of the changes in the law, as I understand it, is to enhance a program of education to convince young people in particular, with a number of instruments, that they would be better off not to take up tobacco.
It is difficult to educate some people with something that is so vague the answers about it would be confusing. Enforcement would be made very difficult if it was not clear what we were setting out to do.
When we talked about vagueness the other day, it was clearness of purpose that we were talking about. What is the legislation trying to do and how is the court going about it? I would have been more comfortable if Judge Iacobucci had taken more time to go at the various vague and confusing aspects of the legislation before the court undertook to recommend changes; would you agree with that?
Mr. Schabas: I agree that it would have been helpful if Judge Iacobucci had left an absolute blueprint for legislation, but he apparently felt he did not have the report of the federal government that would have enabled him to determine the options.
The courts have done this in the past when provisions of the Criminal Code dealing with the rape shield legislation were struck down. One of the justices set out what the new rules should be and they were essentially adopted by Parliament subsequent to that. It is not unheard of that a clear blueprint is given, but Justice Iacobucci's answer to you would be, "I do not have the material because they did not put it before me." If they had, I could have told you what you should and should not do.
Senator Milne: Professor Schabas, I am not a lawyer. Therefore, I found your presentation just a little confusing. It seemed to me you were dancing around the point quite a bit. Fortunately, in your answers to some of the questions, you have been more direct.
What I want to know, with no caveats, because I am not a lawyer, is, in spite of this odd -- as Senator Nolin referred to it -- or complicated drafting, do you feel this bill meets the two criteria that you stated, of rational connection and minimal impairment?
Mr. Schabas: Yes.
Senator Milne: Does it respect the Charter?
Mr. Schabas: Yes.
Senator Milne: Is it constitutional?
Mr. Schabas: Yes.
Senator Milne: Thank you.
Senator Kinsella: I should like to turn our attention to the exact wording of clause 19. In clause 19, the plain wording is:
No person shall promote a tobacco product or a tobacco product-related brand element except as authorized by this Act or the regulations.
The issue that comes to my mind when I read something like this is here is a blanket denial of the common law right of promoting whatever you wish to promote excepting that which the authority of the state has taken away. That is an old classical principle.
When you look at that kind of universal denial of the right of free expression as opposed to the specific limitations, point by point, which, in the past was the way in which things were done, how common has the blanket denial of fundamental freedoms as opposed to specific and detailed limitation become in Canadian law-making and Canadian jurisprudence?
Mr. Schabas: In my answer to the questions of Senator Nolin, I said that we are dealing with legislation here that is essentially regulatory, and inherent in regulatory legislation is some notion of blanket prohibition except what is authorized by legislation. Off the top of my head, I am not sure I can give you many examples, but a great deal of regulatory legislation says you can do things but inherently there is a prohibition.
I shall cite the example of driving. Everyone is prohibited from driving a car, except to the extent they get a driver's licence, pass the test, respect the rules of the road, ensure that their car is in good condition and all of that.
I am not shocked or upset by the way the legislation is drafted.
Senator Kinsella: Would you agree that that is the magnitude of the bill, that the principle or model behind clause 19 is one whereby it is no longer the case that we have a general freedom to promote whatever we wish to promote and that it will be limited by a regulatory regime? Here, you may only promote in these very specific and detailed ways. That is exactly what we are dealing with; is that correct?
Mr. Schabas: Yes, I see it that way. I think it is really just a choice. I do not see it as a problem from a philosophical standpoint. It is merely a matter of choosing which way you will tackle the problem. It may be motivated by a concern that if you leave loopholes in the legislation, one of the tobacco companies will figure out a way to get around them. A lot of energy will be put to finding loopholes. It may be safer to make a blanket prohibition and then say, "You can do promotion and publicity when we tell you how you can do it." That would be the extent of it rather than the other way around. You can certainly do it the other way around without changing the net result in any way. It might be more complicated, and it may be that some astute promoters of tobacco products would find useful loopholes. This makes it harder, of course, to find a loophole in the law.
As I say, I do not have a philosophical problem with the way it has been done. I think we have one of two choices as to how to go about addressing the problem.
Senator Pearson: I would like to pick up on Senator Kinsella's point. Like my colleague Senator Milne, I am not an expert in legal and constitutional affairs, but I like to learn.
I should like to ask a more general question related to freedom of expression. I am sure this issue will arise often in the future in this committee because in our society there are times when the government has to limit it.
You discussed the two criteria by which freedom of expression can be limited: rational connection and minimal impairment. I am just taking an example that has nothing to do with the tobacco issue. Let us consider the situation surrounding Bre-X gold shares and the question about whether the circulated information was accurate or not. Is there a freedom-of-expression defence in distributing information that turns out to be not entirely accurate? I guess the question becomes one of whether there was a deliberate attempt to mislead.
Mr. Schabas: I think there you are dealing with more traditional criminal law defences with respect to charges that might be laid under the Criminal Code or under regulatory legislation, such as having a false prospectus. An accused is entitled to any defence that can raise a reasonable doubt with respect to guilt, even if the information is wrong. One can raise any number of defences, from mistake to mental illness to drunkenness. I doubt that is likely to come up in this case, but those are the options.
Sometimes provisions in the criminal law raising issues dealing with freedom of expression are challenged as unconstitutional. That is a separate issue altogether. That is where you are challenging the existence of the legislation and saying that, because it inhibits freedom of expression, it is then contrary to section 2(b) of the Charter. There have been cases where that was successfully raised as a defence. In the Zundel case, the Supreme Court of Canada ruled that a provision of the Criminal Code was contrary to section 2(b) and could not be saved by section 1 of the Charter. That provision made it a criminal offence to spread false news. That can happen whenever a criminal law provision makes it a crime to express something. It can be challenged as being a breach of freedom of expression.
Then we go back into the analysis under section 1 as to whether it is a reasonable limit in a free and democratic society. That is really the test we are talking about when we use the phrase "minimal impairment".
[Translation]
You say that there is such a thing as the vagueness theory. This should not be confused with the theory of rather vague legislation. I think we should focus on this a little more. What conclusion have you drawn? When you say that some provisions of this bill are vaguely worded, they are not so vague as to give rise to the vagueness theory. If I rely on what you said to Senator Milne, you indicated that the legislation does not violate the Charter or the Constitution and that therefore, the vagueness theory does not apply. The text of the bill is perhaps vague, but not to the point of being unconstitutional. Is that what you said?
Mr. Schabas: Yes.
Senator Beaudoin: My second point has to do with the severability doctrine. In a number of cases, the Supreme Court made the following ruling: a particular clause is invalid, but the legislation may survive, even though one, two or three clauses are invalid. Again, if I rely on the answer that you gave to Senator Milne, you stated that someone can argue that a particular clause is ultra vires or unconstitutional. You have concluded that this bill does not contain any unconstitutional provisions. Is that your expert opinion?
Mr. Schabas: Yes, Senator Beaudoin. The legislation is consistent with the Charter and does not violate freedom of expression in the sense that in the first stage of the analysis freedom of expression is protected by the application of section 1 of the Charter pertaining to reasonable limit.
On the issue of vagueness, I would just like to add that it applies to this legislation as it does to all legislation but that in practice, I do not see any provisions that are so vague that this theory could be invoked. I am certain, however, that some will argue this point. However, I would point out that only once did the Supreme Court of Canada follow up on a challenge based on the vagueness theory. It is an argument that is frequently invoked and which almost never succeeds, certainly not in a regulatory context.
The vagueness issue was argued successfully in a case involving the provisional release of people detained waiting trial, and this case did not resemble this legislation. Does that answer your question?
Senator Beaudoin: You have made your opinion quite clear.
[English]
The Chair: Professor Schabas, I should like to finish off by asking questions on reverse onus in subclauses 53(1) and 53(2). Clearly if the bill said you were guilty until proven innocent, I think it would have some difficulty measuring up to the Charter. Is there a level or a gradation where reverse onus sometimes would pass and sometimes would not?
What we have in this situation are certain prohibited activities. If we want to prove an exception to those activities, then this law is saying that you must prove your exemption. You do not have to prove you are innocent; you must prove your exemption. Is that a gradation?
Mr. Schabas: I do not know of any law in Canada that reverses the burden of proof to the extent that people are guilty until proven innocent. To make someone guilty until proven innocent would mean that the police could lay a charge against someone or the prosecution would present a charge and then, in the absence of any evidence, that person would have to prove his or her innocence. I do not know of any legislation that does that.
We often do allow, on the proof of certain facts, other facts to be presumed. We then require the defendant to reply to those facts and to rebut them. In some cases, the defendant rebuts them by simply raising a doubt; in other cases, the defendant must rebut or refute these presumptions by proving the opposite. For example, the Oakes case concerned possession for purposes of trafficking in narcotics. Upon proof that someone was in possession of a certain quantity of narcotics, he was then presumed to be in possession for the purpose of trafficking and had to get in the witness box to prove the opposite. This provision states that if someone can raise valid defences to these things -- exception, exemption, excuse or qualification <#0107> then he has to prove them instead of merely raise a reasonable doubt about them.
Normally, the general rule is that if you want to raise a reasonable doubt defence, you raise that doubt by saying you have, for example, an exemption. For example, let us say an 11-year-old child is charged with an offence under the act.
The Chair: He cannot be charged because he is a young offender.
Mr. Schabas: Exactly. Theoretically, he could be charged because the Crown may think that the young person is actually aged 19 years old. That person could then raise that argument. He would have to prove it and not just raise a reasonable doubt. He would have to raise not only a doubt about it, which is the normal principle in criminal law, but also prove it to the satisfaction of the trier of fact.
The Chair: Thank you very much. Are there any other questions?
Senator Nolin: I do not know the answer. Maybe I should not ask.
[Translation]
Senator Nolin: This legislation delegates vast regulatory powers. As a professional and an expert, what is your opinion of this massive delegation of power to Cabinet?
Mr. Schabas: I noted from the transcripts of your proceedings that there was a considerable amount of concern expressed about the issue of delegation. Of course, if we were talking about the delegation of power in the context of the Criminal Code, it would be shocking for crimes as such to theoretically be left in the hands of a delegated power.
What we are dealing with here is more like industry regulations. I find the process much less offensive in this case. This flexibility, I might add, may be necessary in order to respond to any eventual constitutional challenges. We will no longer be required to come back to Parliament to have the law amended, even if a regulation goes too far. Adjustments can be made more quickly. I think that that could be a good thing.
Senator Nolin: Why must a criminal law contain prohibitions voted on by Parliament and why would it be shocking for these prohibitions to be decided by an entity other than Parliament?
Mr. Schabas: The intent of the Criminal Code is not to regulate an industry or a corporation's commercial operations. The Criminal Code applies to everyone and must be accessible and clearly understood by everyone, in light of its draconian provisions. It deals with criminal matters.
This is how the government has justified this legislation. It is not criminal in nature as is other legislation such as the Criminal Code or the Narcotics Act. That is one opinion.
Obviously, regulatory power is well-known in taxation matters. For instance, we are not offended that the taxation act comes with many regulations. Where environmental protection is concerned, enormous powers are delegated. It all depends on the context. In some circumstances, it is inadmissible while in others, it is much more acceptable. It seems to me then that we must react. When we are dealing with a more restricted sector of society or an important industry, for example, the legislation needs to be flexible. Regulations allow this flexibility sometimes more readily than statutory law.
Senator Nolin: You are certainly not familiar with the scope of the tobacco industry in Canada. Nor am I. On reading the background material we received, we note that there are over three commercial businesses or entities affected by the prohibitions set out in the bill, the exact extent of which we do not yet know. We need only consider all the small corner stores, often family-run businesses and about the men, women and children who are recent arrivals to Canada. Who are these people going to turn to to understand the extent of the prohibitions imposed on them?
Mr. Schabas: There are certainly many provisions intended specifically for manufacturers and advertisers. The small corner store does not do any promotion. It will not be promoting a Grand Prix in Montreal. It has its own concerns, namely sales. The legislation does not raise any freedom of expression problems. The corner store owner is aware of the signage laws to some degree and must comply with them. What he is most familiar with are the host of municipal and provincial regulations that he must contend with on a daily. I do not see any problems arising. I see no difference between this and all of the other regulatory and legislative rules that corner store operators must comply with.
The Chair: Thank you for your presentation.
[English]
Senators, our next panel this afternoon is made up of representatives from the Canadian Tobacco Manufacturers' Council. I should say that we did not have to subpoena any of them to appear. They are here and we are pleased to see them.
With us this afternoon are Mr. Simon Potter, legal counsel for Imperial Tobacco Limited; Mr. Robert Parker, Chair and Chief Executive Officer of the Canadian Tobacco Manufacturers' Council; Mr. Colin Irving, legal counsel for RJR-Macdonald; and Mr. Steven Sofer, legal counsel for Rothmans, Benson & Hedges Inc. We are looking forward to your presentation. Please proceed.
Mr. Robert R. Parker, Chairman and Chief Executive Office, Canadian Tobacco Manufacturers' Council: Madam Chair, we have two brief opening statements. They correspond with the two major sections of the brief, one of which deals with the business and operational considerations, and the other which deals with the legal implications of the bill.
Obviously, tobacco control is a contentious public policy issue. One of the reasons for that ongoing controversy is that various proponents often make unfounded assumptions about the industry's motives. Many assume wrongly that the manufacturers seek an entirely open marketplace with an uncompromised right to market their products as they see fit. In reality, the manufacturers have no quarrel with the right of the federal government to pursue policies aimed at reducing smoking preference and consumption. Nor do they oppose out of hand responsible and legally acceptable restrictions on the manufacture, promotion and sale of tobacco products, so long as they are workable. In fact, we have imposed such restrictions on ourselves for more than two decades.
The issue of effectiveness, however, and more specifically any evidence as to whether these tobacco control measures actually achieve their intended consequences, is the point at which we part company with many of the critics of tobacco and, indeed, with Health Canada.
As our brief outlines, there are sound reasons why tobacco companies advertise. The one thing that advertising does not do is persuade people to start smoking. At the core of the issue before you is smoking by Canadian youth. The manufacturers agree that youth should not smoke, period. We have spent millions of dollars supporting programs to tell retailers what the law is and to provide materials to help them and their staff adhere to the law and to enforce it. As you will hear from others during these hearings, there is clear evidence that these programs are working in denying access to tobacco by underage Canadian youth.
Is that a full and final answer to youth smoking? No, of course it is not. The member companies are prepared to work with any responsible agency on the issue of youth smoking to further reduce it.
We are here today primarily because the core sections of this proposed legislation have no demonstrable connection to the smoking decision by youth or by anyone else. The predecessor to this act, the Tobacco Products Control Act, failed in the courts and it failed in the marketplace. With this bill, the critical lack of evidence of impact on the smoking decision applies not only to advertising but to several other aspects. There is a de facto ban on event sponsorships. There are provisions relating to retail sales. There are controls on the appearance of tobacco trademarks on other products.
On December 7, the minister said, "We are hoping that within a three-year time frame we will be able to reduce tobacco consumption by anywhere from 15 to 20 or 22 per cent." When we saw this estimate of the bill's anticipated impact, we asked Health Canada for the source or for the study on which it was based. We were advised of the following by the department's director of information access and coordination:
There is no Health Canada study which gives the figures mentioned as a specific projected reduction in tobacco consumption. Minister Dingwall is simply saying that the Health Department hopes that there will be a reduction in the consumption of tobacco over the next three year period...
Senators, with great respect, the hopes of the minister and the department are not a sufficient basis for credible or legal tobacco control legislation.
There are three additional issued detailed in the material put before you.
First, despite its claim to be a legislative response to the need for tobacco control, this bill is little more than framework that provides for a wholesale and unprecedented transfer of legislative authority to the regulatory process.
Second, unlike most bills of this nature, Bill C-71 is absent the usual transitional provisions that would allow rational and practical implementation.
Finally, we at a loss to understand how, given the recent jurisprudence on tobacco control legislation, Bill C-71 could still today contain provisions clearly in violation of the Canadians Charter of Rights and Freedoms. Those are outlined in Part II of our brief and Mr. Irving with speak to them now.
Mr. Colin Irving, Legal Counsel, RJR-Macdonald Inc., Canadian Tobacco Manufacturers' Council: Honourable senators, Bill C-71, as we are told, is designed to replace the Tobacco Products Control Act and to cure the legal and constitutional defects which were found to exist in that law. For the reasons which are set out in our written brief -- at rather great length, I am sorry to say -- but also summarized in a summary, it is our position that Bill C-71 has not been successful in achieving that objective.
Despite the language it uses, the bill in reality imposes the same total ban on advertising that the Supreme Court of Canada found to be unconstitutional. Curiously enough, Professor Schabas a moment ago expressed the opinion that the bill was wholly constitutional. However, the Supreme Court in the TPCA case struck down the ban on the use of tobacco trademarks on non-tobacco products as simply having no rational connection with the objective of limiting tobacco use. It did not even get to the stage of minimal impairment. Yet that same prohibition is right here in Bill C-71. Without a word of justification, it is simply re-enacting something the Supreme Court of Canada less than two years ago found to be unconstitutional.
However, beyond the difficulties with respect to the judgment of the Supreme Court of Canada, Bill C-71 contains a number of provisions which are fatally flawed for legal reasons which have nothing to do with the TPCA and nothing to do with the judgment in RJR-Macdonald.
There are three groups of provisions in this bill which, in our submission, are unconstitutional on their face, and I would like just to take the time necessary to deal briefly with those three groups.
As a preface to saying that, there have been some questions about, and references to, the government view that Bill C-71 has been craftily drafted so that if one or other section is struck down, the rest will be upheld. That is what they said about the Titanic: Sections can go but the ship will still float. I think when we look at it closely, if the groups which I am about to refer to are struck down, the bill is eviscerated, and it is most surely going to be challenged on these grounds.
The first group turns around the definition of "promotion" in clause 18, the ban on all forms of promotion except those permitted in clause 19, and the provisions of clause 20. You just heard Professor Schabas refer to it: Clause 19 criminalizes any form of promotion except those which are specifically permitted.
Let us go to the definition of "promotion" for a moment because it is necessary to look at that carefully to understand what this bill is really doing.
"Promotion" is defined in clause 18, and the first surprise we find is this has nothing to do with commercial promotion. "Promotion" means a representation about a product or service by any means, directly or indirectly, including any communication of information about a product or service, and its price and distribution, that is likely to influence and shape attitudes, beliefs and behaviours about the product or service.
That is a promotion, and you will notice it is not necessary that it should have been done in a commercial context. One would have thought that if Parliament was seeking to replace the TPCA, they would have approached it the same way the TPCA did, by attacking advertising. This attacks promotion, and that is what promotion is. It is not commercial; it is anything. Anything that I say in this room, or that an honourable senator may say in this room, if anyone was listening and was likely to be influenced, could constitute a promotion. I might say, because it is criminal, if you do it except as permitted, you are better to do it in English because then you can only be subject to criminal penalties and prison if you shape attitudes beliefs and behaviours, whereas in French, it is "attitudes, croyances ou comportements".
The two sections are quite incompatible.
So there is promotion, and it is all banned, except now the government's own anti-tobacco policies would be banned because if anyone believes them, they are likely to shape attitudes, beliefs. Those too would fall within the prohibition, so obvious an exemption is needed. You find it in clause 18(2)(b). A report or a commentary or an opinion in respect of a tobacco product is not criminal if no consideration is given by a manufacturer or retailer directly or indirectly for the reference to the tobacco product.If I am counsel to a tobacco company and I am paid by a tobacco company, what I am saying, which can easily constitute a promotion as defined, is not protected by subclause (b), so the tobacco companies are not allowed to express opinions.
It gets worse. If you look at clause 20, you will see that no person shall promote a tobacco product by any means, including the packaging, that are false, misleading or deceptive, which is the provision found in the Competition Act, or that are likely to create an erroneous impression about the characteristics, health effects or health hazards of a tobacco product or its emissions. There you have -- and I believe this is totally unprecedented in Canadian law -- the criminalization of an opinion. An opinion which the speaker believes to be true on a subject which may well be of scientific controversy is banned and it is criminal. You may go to prison for two years for expressing an opinion, and you do not need to be paid by anyone to do it. This is not something paid for by tobacco companies. No person may say anything that could create an erroneous impression. Heavens! I ask honourable senators to consider whether you have ever seen that kind of provision in a Canadian law. In my submission, that could not stand up for one moment in a court of law.
I do not believe that even section 1 could be invoked to support the criminalization of an opinion. I want to illustrate this with one quick point. If you looked in The Globe and Mail today, you saw an advertisement demanding, on behalf of the Non-Smokers' Rights Association, that this committee subpoena the CEOs of the companies, criticizing Mr. Parker for saying he did not know what "addiction" was supposed to mean, and saying, well, of course it would be very surprising if Mr. Parker did not know how the U.S. Surgeon General defined "addiction". Well, Mr. Parker does know, and I know too. However, when the U.S. Surgeon General decided that tobacco was addictive, the Canadian government, in the person of the head of the Drug Directorate of Canada, issued a statement on the subject saying it was total nonsense, and finished by saying that the department's -- his department's, the Health department's <#0107> position must be based on science, not rhetorical opinion. This document would be criminalized under Bill C-71. That is an opinion which might very well influence attitudes, beliefs and behaviours. It comes, after all, from Health Canada, and it criticizes very strongly the U.S. Surgeon General and denies the validity of his scientific conclusion. That would be cut off under this bill.
Those clauses, honourable senators, in my respectful submission, cannot stand in their present form. They would be struck down instantly.
The second group is found in clauses 22 and 27, the advertising provisions. As you know, you may not advertise a tobacco product except as permitted. What is permitted is what is called brand preference advertising and informational advertising. The evidence will show when this matter, as it will, comes to court, that no ad can be drafted that would fit within what is supposedly permitted without taking a serious risk of going to prison. An ad which is otherwise permitted is criminal and exposes the advertiser to two years in prison and a huge fine, repeated every day the offence continues. If you put up a sign, it is a separate offence every day that the sign is up.
As I was listening to Professor Schabas, I thought it will be a real comfort to people in prison knowing they are there not for a criminal act, only a regulatory matter. They are unregulated, they are not criminals, but they will go to jail anyway.
You are allowed to put up signs in places where young persons are not permitted by law. Let us use a bar as an example of a place where there are no young persons. Your sign is nevertheless a crime even though no young person will ever see it, and it is a crime for every day it appears there, according to clause 22(3), if it could be construed on reasonable grounds to be appealing to young persons.
Can you imagine anything where you could say absolutely safely that that could not be construed on reasonable grounds to be appealing to young persons? What young persons? All young persons, some young persons, female young persons, male young persons? There are many kinds of young persons.
Saying that it could be construed on reasonable grounds, by definition, means that it could be construed on reasonable grounds to be otherwise. It is as broad as that. There is no other way to look at it. Yet, it is a crime with no due-diligence defence. Here we come to the second legal problem with this bill, which, I would say, does not even require evidence.
The Supreme Court of Canada has said that where criminal sanctions are imposed, where you are going to prison and there will be some sort of stigma attached to you, where you are some sort of a criminal, then you cannot be found guilty of a crime unless you have what the lawyers like to call mens rea, a guilty mind.
The Supreme Court has also said when it comes to regulatory crimes or regulatory offences -- and I agree that this is one -- you can substitute negligence for that degree of guilty knowledge, but subject to certain conditions. You can substitute negligence provided there is a due-diligence defence. We do not send people to prison in Canada for being negligent without even giving them the opportunity to show they took all precautions they could. That simply will not fly under the Charter.
This is not freedom of expression; this is section 7, the principles of fundamental justice. I have not heard anyone talk about them yet. Fundamental justice does not allow the imprisonment of people for making that kind of error unless they can try to show that they did their best.
If you go back to clause 20, the Competition Act bans advertising which is false, misleading, or deceptive. The very next section in the Competition Act says that no person shall be found guilty of an offence under this section if he shows that he used due diligence and attempted to verify the accuracy of what he was saying. However, that defence is not available under Bill C-71, and that is a fatal flaw in the legislation. It applies not only to the advertising which could be construed to be appealing to young persons, but also to lifestyle.
It is sometimes hard to remember that we are now talking about crimes. We are talking about people going to jail if their ad, according to the lifestyle definition, associates a product with, or evokes a positive or negative emotion about, or image of, a way of life that includes glamour, recreation, excitement, vitality, risk or daring. Try to imagine designing an advertisement where you are prepared to take the risk of ending up in prison because you do not think that it could evoke an emotion, positive or negative, about risk. How could you advertise a tobacco product without taking the risk of evoking an emotion, positive or negative, about risk? Again, as with the earlier case of young people, that is not a standard which the courts would accept.
First, there is no due-diligence defence available, and second, in justifying the possibility that people will go to prison for being negligent, even in circumstances where they cannot show they used any diligence at all, the Supreme Court has said that, in regulated industries, there are objective standards to which people who choose to enter the industry must adhere, and that is only reasonable. It is reasonable if there are objective standards, but are these objective standards? They are not objective at all. What could be construed to be appealing to young persons. I respectfully suggest none of us would know that, and none of us would know what could evoke an emotion. It does not fit within the justification for jailing people on the grounds of simply being negligent, and there is no due-diligence defence to finish those clauses in the eyes of the courts.
Clause 27 simply reimposes the same ban on the use of trademarks which the Supreme Court of Canada struck down in the TPCA case. There is no justification given for it. That was the section the court found did not even meet the rational connection test. Here it is again. The tests are those same ones of appealing to young persons or lifestyle.
Clause 27, of course, constitutes a crime again. Professor Schabas would say it is not a crime. I will not argue the meanings of words with him, but it does put you in prison, which is a good enough for me to call it a crime.
Finally -- I do not think I need to go into detail on this because it is in the summary -- there is another group of clauses which allow for search and seizure. It is amazing that this passed the House of Commons because there have been recent court cases involving the Ontario tobacco act where the courts have said that if you break into people's houses, you must have a warrant, but you cannot get the warrant unless you sign an affidavit showing that you have some reasonable cause to believe that a crime has been committed. Under this bill, you will not need to do that. You will simply say you do not think the person will let you in. Why should people let you in if they have not done anything wrong? Those clauses cannot stand either.
Those three groups of clauses, once taken out of the bill, leave it eviscerated, and none of them have anything at all to do with the Supreme Court judgment in RJR-Macdonald or TPCA.
In addition to that, evidence will be introduced to show that, effectively, you really cannot advertise. There is a total ban on all forms of outdoor advertising. The Supreme Court of Canada said a total ban on outdoor advertising was not justifiable. However, here it is again. It is a total ban on point-of-sale advertising, again flying in the face of the Supreme Court's ruling. It is not a total ban, according to its language, on media advertising, but there you run into the problems I have been discussing about appealing to youth and lifestyle. At the end of the day, this is a reimposition of the ban, but I do not think we would even get to that in a courtroom now because it so clearly violates the Charter in so many other ways.
Those are the legal grounds on which, if this legislation were to pass, there would be an application to the court to strike it down and to stay its effect until the final judgment. After all, the companies my colleagues and I represent spent 6 and one-half years being unable to advertise under a law which was found to be unconstitutional at the end of that time. It would not be unreasonable to expect they would not want to go through that process a second time. This bill, far from being an improvement over the TPCA, is, in many respects, far worse.
The Chair: Thank you, Mr. Irving.
Senator Kenny: Welcome, gentlemen. I am puzzled by the business part of the presentation relating to promotions. If I understand your brief, you are suggesting that you need to advertise, not to get new smokers but to keep your market share. Is that correct?
Mr. Parker: Keep it or increase it, yes.
Senator Kenny: If you are to keep it or increase it, where do these new smokers come from? Given that 40,000 smokers die a year, where do you get the new ones?
Mr. Parker: Senator, a predictable number of people stop smoking every year, and a more or less predictable number start smoking every year. That has been going on for 10 years. There has been no significant change in the overall percentage of people who smoke in Canada, but there has been a significant movement in and out. People decide for a complex set of reasons either to start or stop smoking. Advertising - as far as we can determine -- has no impact on that decision. It has not had an impact in Canada, the United States or any of the dozen or so countries around the world that have had complete or partial bans on advertising or sponsorships, or both in some cases, for periods approaching or exceeding 20 years.
Senator Kenny: Let me understand you clearly, Mr. Parker. You are saying that advertising works to get people to switch from one brand to another, but the same advertising will not work to get someone to choose a brand to start off with?
Mr. Parker: Smokers do not usually choose a brand to start off with. If you talk to friends of yours who smoke or used to smoke, or if you smoke, you will find that most people begin smoking by being given cigarettes by friends or stealing them from siblings or taking them from their parents. They pay no attention to what the brand is. That goes on for a period of years.
It is estimated that 80 per cent of adolescents experiment with smoking. That has not changed much in about 40 years. However, 30 or 40 years ago, 45 or 50 per cent of adolescents would become confirmed smokers after a period of several years of experimentation. Today, that figure is about 30 per cent. Why is it different? Again, it is as a result of a complex set of reasons. The point is that advertising does not persuade a first-time smoker to pick this brand to begin with. That is not the way the decision works, based on everything we know about the market.
Senator Kenny: Are you familiar with Proposition 99 in California?
Mr. Parker: Yes, sir. That is the dedicated tax on tobacco.
Senator Kenny: Would you care to describe to the committee how Proposition 99 functions?
Mr. Parker: Senator, I am not an expert on it. I am aware that it is a provision that imposes a specific tax per pack of cigarettes and then distributes that money among anti-smoking groups. I may be wrong. Perhaps you can correct me.
Senator Kenny: My understanding of Proposition 99, Mr. Parker, is that it is a tax that was in effect for three years and resulted in significant reductions in smoking. When I am say "significant", I mean in excess of 20 or 30 per cent reductions.
In your studies of advertising, have you found that advertising will reduce smoking?
Mr. Parker: No, sir. We have found that advertising will neither reduce nor increase smoking. Advertising has an effect on brand choice among confirmed smokers. That is certainly true. That does not mean all advertising works.
Clearly, if two companies are advertising and one of them gains market share while the other one loses, someone's advertising was better than someone else's. That is true with every product, not just tobacco.
We have had high taxes on tobacco products in Canada. California is not the only jurisdiction that has tried a price route. While there is no denying the fact that there is some connection between price and consumption, what the high taxes demonstrated in Canada is that that connection is a much weaker and has less of an impact than anyone had anticipated.
Just prior to February of 1994, 40 per cent of the market in Canada consisted of contraband tobacco. That situation was driven by price. It motivated people powerfully to buy illegally; it do not motivate them to stop.
Senator Kenny: Why is tobacco the only product in the world that, when advertised, does not attract new customers? Let us take the automobile industry as an example. Why do we not hear the car manufacturers saying, "Well, we are just doing this to get them to switch brands"? Car manufacturers will come and tell you, "We are out for new folk. We would like to get people to buy their first car from us. Come and buy a Ford from us." That is how they sell new Fords.
Mr. Parker: Therefore, someone who has never wanted a car and never thought of owning one reads ads by Ford and decides that they should indeed own a car, senator? I do not agree with that.
People who buy mufflers as a result of advertising from, say, Speedy Muffler King, were first persuaded by that advertising to go and buy a car in order to be in the market for a muffler. People who read gasoline advertising do not tend to drive more as a result of seeing the advertising.
I certainly do not think that people who buy brassières were persuaded that they had to do so by the advertising. They were persuaded to buy a particular brand.
It is an old and long-standing argument, and for people who choose to believe, whether or not there is any evidence to support it, that advertising persuades people to do things they would not otherwise have done, the argument will persist. We do not see any evidence of that -- any practical, market-driven or any other kind of evidence -- not here or in any other country.
I will point out that in all the representations that we have seen, to the committee in the other place and to this committee, by people supporting the legislation, there has not been a single specific description of a negative impact on prevalence of advertising or sponsorship bans.
There has been a lot of talk about the bill being about health. It is only about health if it actually produces a change in behaviour. These kinds of restrictions have never worked anywhere else.
Senator Kenny: They have in California. I just gave you the example.
Mr. Parker: You gave me an example of a tax, senator.
Senator Kenny: No, I gave you an example of an advertising program, Mr. Parker, that you are evidently not familiar with. You said you were. Proposition 99 funded a $25-million-per-year advertising program that caused a reduction, together with the tax, in smoking in California.
Mr. Parker: My question, senator, then --
Senator Kenny: No, no, I ask the questions, not you. That is just the way this works.
Mr. Parker: This is not a question to you, senator; it is a general question. That is an example of anti-smoking advertising that worked. There have been tens of millions of dollars spent in this country by governments and others on anti-smoking advertising. Why did not they work? That is my question.
Senator Kenny: The answer, I guess, would be fairly clear and that is because you folks are outspending them 10 to 1 or 15 to 1 on it and because you are outpromoting the people producing the anti-tobacco advertising.
I would be much more impressed -- in fact, I would be better able to keep my cool dealing with you folks <#0107> if, when you came and presented us with information as you have here, you talked about what you are doing about the number of people who are dying from your products, or about the 40,000 Canadians who will die this year and 40,000 next year and 40,000 the year after. You sit there quite quietly, smiling and saying, "Look, we are really not picking up these new kids." Everybody in this room knows you are picking up kids. We all know that the new kids are coming along and we are not fools.
You can sit there and you can look with a straight face and say there is no link between advertising and consumption, but everyone here, the whole audience, understands that you folks are advertising and, in the process of doing it, you are picking up young people who are buying your product and who ultimately are going to die sooner than they should because your product will kill them.
Mr. Parker: Senator, I have presented the case as I understand it. I still have not heard a single linkage between advertising and smoking initiation. The statement you just made does not make that link.
Senator Milne: Mr. Parker, I understand that the industry has done some internal studies on the effect of sponsorships on consumption of tobacco. In fact, I would be astounded if you have not.
Mr. Parker: No, ma'am.
Senator Milne: You say you have not?
Mr. Parker: No.
Senator Milne: You say categorically you have not.
Mr. Parker: I work for the industry association, and have for five years, senator -- in fact, to the day.
I know of no study, and no member company has told me of any study that they have done, about consumption of tobacco related to sponsorships.
Senator Milne: In that case, may I ask Mr. Potter of Imperial Tobacco Limited, has your company done any internal studies?
Mr. Simon Potter, Legal Counsel, Imperial Tobacco Limited, Canadian Tobacco Manufacturers' Council: I am unaware of any studies of the kinds you mention, senator.
Senator Milne: Mr. Sofer?
Mr. Stephen Sofer, Legal Counsel, Rothmans, Benson & Hedges Inc.: I too am unaware.
Senator Milne: Mr. Irving, RJR-Macdonald?
Mr. Irving: I have never seen such a study.
Senator Milne: Do you know whether or not they exist?
Mr. Irving: I do not know that they exist. I do not know of any. I do know that in the TPCA case we provided all the marketing documents of RJR-Macdonald going back for 15 years. They were all turned over to the government and examined at great length by government experts. One of them, who will be here next week, came to the court saying the kinds of things that Senator Kenny has been saying. I asked him, "Could you find a single, solitary marketing document of RJR-Macdonald where anyone was interviewed for ad purposes who was not of full age and already a smoker?" At the end of the day, he had to say that there were none. They simply did not do any research at all among people under age, or under 18 at the time. I know that.
Senator Milne: I believe that Imperial Tobacco Limited regularly surveys people as young as 15.
Mr. Potter: That is my client, senator. The answer for Imperial Tobacco is exactly the same as Mr. Irving has given for RJR. The same expert -- indeed, several experts of the government -- went through all of Imperial's marketing documents.
Senator Milne: All that were provided to them.
Mr. Potter: That is all there were senator, and I made sure of that myself. There was no advertising campaign tested on anyone other than smokers of legal age to smoke.
Senator Milne: I am talking surveys, not advertising.
Mr. Potter: Yes, there are surveys conducted on people, just as Statistics Canada does quantitative surveys to find out how many people are smoking. That does not go to the question of whether an ad is produced on the basis of that information, and there are none. No ad is ever used unless it is repeatedly and extensively tested on people belonging to the target group. The target group of people on which those ad campaigns were tested were always current smokers of legal age to smoke.
Mr. Parker: Senator, when you began this questioning, you asked me if I was aware of any studies done on sponsorship.
Senator Milne: Yes.
Mr. Parker: We regard sponsorship and sponsorship advertising as quite a different category from product advertising. Did you mean advertising in general without regard to the distinction?
Senator Milne: No. I was asking you specifically about sponsorship. I am asking the rest of the gentlemen in general.
Mr. Parker: I merely wanted to ensure that I did not inadvertently mislead you.
Senator Milne: In general, sir.
Mr. Parker: In general, the companies do advertising research with adult smokers, as I believe all three have pointed out. They are very concerned about market share because of the inordinate economic rewards or penalties that go with it. The simplest and fastest way to explain why companies advertise in markets is to look at the two companies that are publicly owned or have publicly traded shares and whose financial results are reported publicly. The largest company has about two-thirds of the total market, or about 65 per cent. The next largest company has roughly 20 per cent. The total revenues -- not including sales or tobacco taxes -- of the larger company are five times those of the smaller company. Their profits are 11 times higher. The reason for that is the economics of market share. They pay very close attention to who is getting what market share. They also report it to government by brand and by month. However, I am not aware of any studies on sponsorship.
Mr. Potter: I believe one good answer to your question is the test tube of Canada. In Canada, there was a good deal of advertising permitted during several decades. During those decades, right until the end of the 1980s, the percentage of Canadians who smoked declined rather consistently and dramatically in the face of that advertising. That decline stopped when the TPCA ad ban came into effect. I think that perhaps answers your question.
Senator Milne: Are you saying that advertising has had no effect whatsoever on the fact that more women are smoking now?
Mr. Potter: I think everyone in this room would agree that the factors which have changed a variety of behaviours in Canadian women are numerous, deep, profound and go a lot further than whether advertising is available to them.
Mr. Irving: Senator, that increase took place at the time when advertising was prohibited. The little blip up started at the time when product advertising was banned.
Senator Milne: Generally, I sit here quietly and mildly, but I was rather offended by Mr. Parker's gratuitous remarks about advertising women's brassieres. Why not use men's jock straps as an example?
Mr. Potter: I also was offended, senator, and would rather he had said "men's underwear", but the conclusion to draw is the same because none of us buy men's underwear simply because it is advertised.
Mr. Irving: I think what Mr. Parker was trying to say in a more general sense -- and all the theorists in advertising would agree with this, whether they are fond of tobacco companies or not -- is that it is very difficult to get people interested in an ad to begin with.
Senator Milne: Tell that to Calvin Klein.
Mr. Irving: If people are not interested in the product, they hardly even notice ads. If it is something they are not interested in, they do not buy. People do not look at cat food ads if they do not own a cat. That is what Mr. Parker was saying. Perhaps under the circumstances he would have been wiser to stick to cats, but the principle is correct.
Senator Milne: Gentlemen, what is your opinion of the recent statement issued by Liggett in the United States?
Mr. Parker: Senator, I have seen more news reports than I have direct company material. They made a partial settlement of a legal case. In the course of doing that, they made two statements, one about marketing their products to children and the other about their opinion of the addictive properties of tobacco. That company is not connected to the Canadian industry. Those cases do not involve the Canadian industry. As Mr. Irving pointed out, people who are far more expert at the topic than the owner of Liggett disagree, not just slightly but sharply, on both of those questions.
That is all I have to say about the U.S. question.
Senator Milne: We will agree to disagree on that one.
How large an educational campaign about sales to minors does the industry fund each year?
Mr. Parker: The total figures this year would run in the neighbourhood of $800,000. We have been doing it for seven or eight years. The amounts depend on whether the program is being redesigned or simply sustained, but the total figure is well into the millions over a period of time. The law changed part way through that period. The legal age of smoking was increased, in some cases to 18 and in others to 19. The current program, though, is about $800,000.
Senator Milne: Does that seem fair to you when it is estimated that up to $17 million per year profit from illegal sales to underage youth is made by the tobacco industry?
Mr. Parker: We do not sell to any consumer, senator. I do not know where that estimate could come from. The industry sells almost entirely to wholesalers. In some cases, large retail organizations are their own wholesalers. Retailers buy from wholesalers and they sell to end users.
Are there young people illegally buying tobacco? Of course there are, and we think it should be stopped. We think retailers are in the best position to stop it by knowing what the law is and by being given material that will help them teach their staff how to say no and not annoy or lose a customer when the customer does not have ID and looks to be under age. We have samples of that kind of material which I would be happy to leave with you.
Senator Milne: Seventeen million dollars in illegal sales at retail stores is a fair chunk.
Mr. Parker: If there were any substance to the accusation, I could deal with it. However, we do not sell to minors; we do not sell to adults. We sell through wholesalers. The final sale is not executed by the tobacco company.
Senator Nolin: To make it very clear, you are gaining from illegal sales by someone else to minors. That is what you mean. But the product is not illegal. It is not criminal to produce and market cigarettes.
I am interested in the almost $1 million program you spoke of to teach retailers how to deal with minors who are asking for cigarettes.
You offered some material.
Mr. Parker: This is a sample of the kit that retailers request.
Senator Nolin: You have done that proactively, without any legal obligation to do it. Have you done it on your own?
Mr. Parker: It is done through a coalition which we fund. The members of the coalition -- and it is a large one -- include the Retail Council of Canada, the Canadian Federation of Independent Grocers, the Ontario Convenience Store Association and retail unions.
Senator Nolin: Is the government part of that?
Mr. Parker: No.
Senator Nolin: Have you asked them to be part of it?
Mr. Parker: Yes, we did.
Senator Nolin: They refused?
Mr. Parker: They did. We asked government to endorse the program. They agreed to review the material informally, but would not endorse it. We do not know why. I could only speculate on the reason for that.
I can tell you that it has been very enthusiastically received; more so than many of its predecessor programs. We have distributed 70,000 kits. Some of the larger retailers have more than one. This year's program cost, including administration, advertising, production and distribution of the kits, is closer to $1.5 million. My earlier figure was inaccurate and I apologize for that.
Extensive research was done with retailers and their staff before the kit was put together.If someone who looks like he or she might be 17 or 18 asks for cigarettes, it sounds simple for the clerk to say, "I will not sell to you unless you show me ID", but if the clerk happens to be 16 years old, which can be the case, it is not necessarily the easiest thing in the world to do. Customers can be abusive. This material explains how they can firmly refuse the sale. In fact, store owners are urged to make it a firing offence, once the training has been received, to sell without asking for ID. This has been well received.
There is increasing evidence of 100 per cent compliance by stores that are using this kit. Is it a fail safe? Does it mean that any store that uses this will never make a mistake and sell tobacco to a minor? No. It would be inhuman to expect that. Staffs change and they forget what they were trained, and so on. The point is: It is against the law. We do not think youth should smoke and neither do any of the people participating in this. It is one part of a larger answer.
The larger answer involves the point that you raised and what the other senator might have been referring to; namely, working directly with youth to explain why they should not smoke. We are more than willing to discuss that, but there is an obvious problem. Our companies make the product.
The first question I as a marketing person would ask is: Are we the most credible people to tell young people not to buy the product?
Senator Nolin: At least you are doing it.
Senator Lewis: In answer to a question by Senator Milne, you each stated that you had no knowledge of certain surveys that she asked about. I noticed that you then referred to your clients. I see from the list of witnesses that each of you are legal counsel, not officials of the companies. Did you make inquiries to see whether there were any of these surveys done to which Senator Milne referred?
Mr. Potter: You are right, the lawyers here are the outside lawyers of the three companies. My client thought, this being the Legal and Constitutional Affairs Committee of the Senate, that the way to be helpful to you was to send someone who could speak about legal and constitutional matters. That is why I am here. We had no forewarning of the question which has come from Senator Milne. I did not prepare for it, but I have given an answer on the basis of what I have seen, and I have seen a lot. I can go back and see if there is another answer or a more complete answer.
However, I do want to be clear, Senator Lewis.Surveys are one thing. Studies trying to come to grips with the link between a factor, for example sponsorship, and a result, let us say consumption -- if there is such a link -- is quite different. All companies that sell anything survey their market all the time to try to learn what the market actually is.
All companies do surveys trying to find out what is happening but I am aware of no study of what link there is, if any, between sponsorship and consumption.
Senator Lewis: Does that apply to the other two?
Mr. Irving: I am familiar with a study which was not done by my client. It is referred to in the literature. A major study, which has nothing to do with any of these companies, was published in 1992 by a group of researchers. It addressed why young people take up smoking. They looked at what they called the predictors of smoking in adolescents. They found that adolescent rebelliousness was probably the major indicator. Other indicators were parental smoking and peer influence. In looking at all the literature, they noted that there had been at least one study on the effect of attending events sponsored by tobacco companies, which was found not to be a predictor of smoking; and another study about exposure of advertising, which was found not to be a predictor of smoking. That is one study on each of those subjects which is referred to in the literature. I am familiar with that and can provide you with it, if you should like to see it.
I do not know of any such study done by RJR-Macdonald, and I would be very surprised if they had done one. That kind of scientific research goes on all the time.
I am trying to understand why adolescents start smoking. Why do they start smoking marijuana? Why do they start drinking? Why do they indulge in sex before they are old enough to do so? They do all kinds of things they are not meant to do until they are older. Psychologists look at those issues and try to come up with answers. To that extent, I am familiar with that study, but that is all.
Mr. Parker: I undertake to all members of the committee that when I return to my office today, I will ask each of our member companies to provide me with the answer to the question: Are there any studies done by any of them at any time or by the industry association on any connection between sponsorship, sponsorship advertising and smoking consumption? If there are such studies, we will notify you of their existence. If they are not competitively sensitive, we will provide you with copies. However, I repeat that I know of no such studies.
Senator Lewis: My point goes even further than that. I am wondering whether these witnesses are the right witnesses for us to gain information about the tobacco industry. I can well appreciate their position. As counsel for their clients, there is confidentiality between them and their clients. I am wondering if we can get all the facts we may need.
The Chair: Senator Lewis, we have a number of other witnesses coming before the committee who can give you some of the answers you request.
Senator Jessiman: Mr. Potter, you said that the government failed in the legislation which was passed in 1987-88 and defeated in 1995 in the Supreme Court. You said it failed not only in court but also in the marketplace.
Mr. Parker: Yes.
Senator Jessiman: We were told exactly the opposite, although I have not seen the evidence yet. I asked others about the period of time when that legislation, as broad as it was and which failed the test legally, was still in place. You are telling us that, as far as you are concerned, that legislation did not reduce the amount of smoking.
Mr. Parker: Senator, if you would turn to page 11 of our brief, and look at tab 2, you will find there a chart of a variety of surveys, all done by the Government of Canada between 1986 and 1995. The chart shows the overall prevalence of all Canadians 15 years of age and over who smoke.
Senator Jessiman: Is the percentage on the left-hand side of the chart?
Mr. Parker: That is correct. As you can see, it is essentially a flat line, with the exception of that dip between 1989 and 1991.
On page 12 you will see the percentage of youth aged 15 to 19 over the same period. The little dip that you can see on the overall prevalence in the previous chart is caused by what you are looking at here. Starting in the early part of the 1980s, there was a significant decline in youth smoking until 1990. Up until 1988, there was advertising; however, youth smoking was still declining. Beginning in 1989, a product advertising ban was put in place. Sponsorship was permitted but product advertising and the use of trademarks was banned. Youth prevalence continued to decline for two more years and then it turned around. Over the next four years it increased, while there was a product advertising ban and while taxes were high and rising, back to the levels that it had been in the early 1980s. Why? We do not know why. Similar decreases and increases in youth smoking have been observed in the United States and in other countries.
The point is simply that if you look at this on its surface, you cannot find a connection between these changes; that is, the advertising ban, the increased taxes, the larger messages on packages, consumption bans, anti-advertising campaigns or any of a range of other tobacco control measures.
Back on page 11 again, you will see it is 10 years of flat line. Could it change tomorrow without anything else changing? Yes, it could. However, it has not changed in the last 10 years, which is the reason for this statement.
Senator Jessiman: All of you are in a difficult position in that you are lawyers acting on behalf of tobacco producers. You say that you do not think people under 19, which is the age referred to in the bill, should smoke. However, Mr. Potter, you also said that 30 per cent of smokers are under the age of 19. That is the figure I wrote down. Is that correct?
Mr. Parker: No, sir. I may have misspoken. I said that between 75 per cent and 80 per cent of adolescents experiment with tobacco at some time. They do not all become confirmed smokers. I will ask Mr. Irving to add to this in a moment because he has the latest and largest Canadian youth smoking survey in front of him.
Senator Jessiman: Does anyone disagree that tobacco is addictive? Will we get the same answer as you gave before?
Mr. Parker: Senator, as I have stated before, the problem is that we do not have a definition of addiction that we believe, first, is universally accepted and, second, is sensible. There is a definition of addiction in the U.S. Surgeon General's report from several years ago. When it was published, the Canadian government people with equivalent responsibility said the definition was nonsense. The definition they used, which is referred to in the ad that was shown to senators today, certainly says that under that standard tobacco is addictive, as are coffee, chocolate and potato chips.
There are 7 million smokers in Canada, and almost that many former smokers. Some 95 per cent of them quit without any outside assistance. That does not mean it was easy; but they stopped without hypnosis, the patch or whatever. I do not think that telling people they are addicts makes it easier for them to quit. I have talked to experts who say that is a crutch to avoid quitting.
Whether it is addictive or not, defined the way it is, is an opinion and not a matter of fact. That is the position. I hope that is clear enough.
Senator Jessiman: What can we do to help ensure that young people do not start to smoke? If you are correct, I am not sure this legislation will do what we think it will do.
Mr. Irving: Yes. If you read fairly the serious literature on the subject of why kids start to smoke, you will conclude that this kind of legislation will not be helpful. I am not sure that it is not counter-productive.
Kids who are rebellious are the least likely to respond favourably to big brother, big government or anyone else telling them what to do. Most people understand "addictive" to mean that something it is more powerful than they are <#0107> they are an addict. That is why science dropped the word "addiction" many years ago. It has moral implications and it gives people the wrong impression that they cannot stop.
Telling people tobacco is addictive is the most damn fool public policy there could be. You are telling people, "It is really difficult to quit." You should not be telling them that. People quit if they want to quit, and they do by the millions.
In the period Mr. Parker was talking about, that is, up to the 1980s, the biggest declines in prevalence were in the youngest age groups. That information is found in the labour force surveys conducted by the Canadian government. The 15- to 19-year-old group, which they measure, showed the biggest declines in prevalence of all groups. The second biggest decline was in the next youngest groups. Kids quit. Sure, kids start smoking, but kids experiment with everything. They are perfectly capable of stopping, and they do stop.
Using a scary word like "addiction", which mean nothing scientifically any way, is not helpful. The chief "addiction witness" against the companies in the TPCA case, who was no fan of the companies, wrote an article which appeared in Lancet entitled "Filtering Smokers' Hot Air". He said that when you ask people if they tried to quit smoking, of course they will say "Yes". When you ask if they tried really hard, of course they will say "Yes", because you are looking at them as if to say, "You must be foolish not to". When you ask if they succeeded, if they did not succeed, they say, "No, but I am addicted." It is used as a crutch, an excuse.
In the scientific literature, there are concepts which the American Psychiatric Association uses. In their manual of all forms of psychological or psychiatric difficulties, the word "addiction" never appears. They use the word "dependency" which is a concept on a continuum -- some people have a little trouble, some people have more and some have quite a lot. We all know that. That is a much more sensible approach. However, looking at the literature on why kids smoke and what you can do to address the kinds of influences that are being used, would yield some results. It is clear from results around the world that while simply banning advertising may be good politics, is not good public policy because it does not work.
Mr. Potter: Senator, in response to your question, I wish to congratulate you on asking exactly the right question. Mr. Irving and I were in court for seven years fighting a statute which was finally declared unconstitutional and an invasion of people's freedoms in a free and democratic society. The government had documents in which it recognized that the TPCA was cosmetic. It had no reasonable prospect of accomplishing a reduction in the incidence of smoking. Therefore, you ask exactly the right question.
Instead of spending all this energy around this table, in the two houses of Parliament and in boardrooms across the nation on something which is largely cosmetic, what should we be doing? That is the right question, senator. We should obviously be promoting programs like the one that Mr. Parker has just explained; Operation ID. It seems rather clear.
Senator Jessiman: Rather than $1.5 million, something like $1.5 billion should be spent on that. I do not think $1.5 million is a big number, although it is if you do not have it.
Mr. Potter: It is a big number. In addition to the money, we need more consultation and teamwork in Canada rather than beginning to study a bill after it is introduced, without the slightest bit of prior consultation. If everyone involved in this industry were discussing what to do to answer your correct question, the efforts would be better spent.
Senator Doyle: Gentlemen, there is another committee in the Senate which is examining an aspect of the smoking habit. I recently sat in on a panel of Ottawa high school students who are very vigorously involved in the business of trying to persuade their younger siblings to stop smoking. They say they start smoking at seven, eight or nine. I asked what attracts them; what brings them into it. They said that parents smoke and peers smoke. Also, it is a pretty glamorous business; all hot shots smoke. They see them in the movies and on television, with great frequency. It is not just Paul Henreid lighting a cigarette for Bette Davis anymore; it is 10 people lighting up at once.
I asked what was the largest factor. They said the cost of cigarettes. When the cost went down after the government caved in, they all went back to smoking. I do not know what you do about that or what you are trying to do about that.
Is there any place in your documents where it tells me how much money is spent promotionally assisting movie companies to present smoking in exciting or pleasant backgrounds? I do not think there is any sequence on TV any more in which less than three people are smoking. It is a fascinating area. Is there something being done that we should know about or that you should know about?
Mr. Parker: There are two or three questions in there. Do the Canadian companies spend any money on what is called product placement in movies or television? The answer is no. That has been a practice with some companies in the United States. As far as I know, it has never been done here. It is formally banned in the industry's voluntary code.
Senator Doyle: You said no money is spent. Do you supply free cigarettes or other product?
Mr. Parker: No, sir. Supply of free cigarettes is illegal under the TPCA.
The second question was what can be done to eliminate or reduce youth smoking. I think much can be done in terms of advertising. Obviously, there is information on the health risks. There are peer activity groups; the kind of things the young people who appeared before that committee participated in. There are advertising campaigns, although I have less faith in their efficacy than Senator Kenny may have.
From a personal perspective, I have been with this industry for five years and it seems to me that much of the energy of anti-tobacco groups -- and in fact this is stated in their policies -- is focused on attacking tobacco companies and attacking individuals, including yours truly. Senator, no one smokes a tobacco company; no one smokes lobbyists. They smoke cigarettes or other forms of tobacco, and no one ever stopped because they disliked tobacco companies or started because they liked one. There is a whole other set of reasons. Anti-tobacco groups get grants based on the amount of publicity they are able to generate, and attacking tobacco companies is good fun, but it does not affect the smoking decision and has not for a long time.
If we took away some of the hysteria of the campaigns that say, "Do not smoke. Never smoke. Stop it instantly. I will throw you out of the house if I ever find you smoking", we might be able to improve the situation. There are a lot of parents sitting at this table. Is that a way to persuade your teenagers to do what you want them to do, or are there gentler, more persuasive and more effective methods? I think the answer to that is yes.
Senator Doyle: A young friend was bemoaning the fact that he could not stop himself from smoking. He would try and then fall off the wagon. So I said, "This is Christmas week. If you stop for a year, I will give you $1,000, and we will put you on your own trial." We never mentioned any of your companies. He made it until the following December 15.
Mr. Parker: And then started smoking again?
Senator Doyle: And then started smoking again, which he continues to do to this day. He is a faithful customer.
Mr. Sofer: At tab 4 of our brief we have put forward our suggested changes to the bill, one of which is prohibiting paying any consideration for the appearance of a tobacco product or brand in any cinema, film, video tape, et cetera. So you can see that we agree with your suggestion.
You asked what is the most effective way of dealing with kids. I do not know the answer, but when the minister appeared before you, in response to a question from Senator Pearson he said that Health Canada's polling and focus groups show that peer pressure is the best way to get young people to stop smoking. Therefore, I think he would agree with those other hearings that are going on as well.
Senator Doyle: You would not be in favour of an immediate price increase of substantial proportion?
Mr. Parker: No, senator. One of the problems with that can be seen from the chart I showed you on page 12. The increase, first by young women and then by young men, from the low in 1990 or 1991 back up to the peak in 1994, happened while taxes were very high and rising. Governments in five provinces sharply reduced cigarette taxes in February of 1994. Since then, you can see what has happened to youth smoking. It is a squiggly line.
Some people tied themselves in knots trying to demonstrate that high-tax provinces have had a bigger decline and low-tax provinces have had an increase, or more people have quit in high-tax provinces and more people have resumed in low-tax provinces, or that they are smoking more. Frankly, the data just does not provide for those conclusions. The data does show that smoking levelled off at the time of the tax decrease. It has not changed significantly. In high-tax provinces or low-tax provinces, for youth, for men, for women, for anyone, it is about the same now as it was two years ago. In fact, it is about the same now as it was 10 years ago. That is not our research; that is from Health Canada and Statistics Canada.
Senator Beaudoin: I should like to go back to the question of illegality. You said, Mr. Irving and Mr. Potter, that, in this case, we have the equivalent of a total ban or total prohibition. In the Macdonald case, we were faced with a total and absolute prohibition. So far, the jurists who came before us talked about restriction of freedom of expression, but they did not use the term "equivalent of a total ban".
Does that mean that clauses 20, 22, and 24 are against the Charter, cannot be justified by section 1, and are invalid? Are they severable, or do they ruin the whole bill? Can the act remain valid even if they are invalid?
Mr. Irving: Senator, let me answer you in two ways, because it is a total ban in two senses.
The TPCA banned all forms of advertising. It specifically dealt with point-of-sale advertising which was banned at one point in time, with billboard advertising which was banned at another moment, and with media advertising. Everything was included. The Supreme Court said, at the end of the day, that a total ban on advertising was unjustified. We are back with a total ban on billboard advertising and a total ban on any form of point-of-sale advertising. That is not justified by the judgment in RJR-Macdonald.
The Supreme Court never talked about the placement of ads. It talked about the effect an advertisement might have and said that brand preference advertising, what they called reminders of package appearance, informational advertising, and advertising about new products was okay. They found that positively, and there is nothing to suggest that they meant to say it is okay except you can ban it everywhere except in a newspaper with an 85 per cent readership or on signs in a bar somewhere. That issue never came up, and it is not dealt with in any of the studies the government has released either. It is a total ban on almost all forms of advertising and, in that, it is contrary to the judgment in RJR-Macdonald.
Theoretically, you may use what they call brand advertising and informational advertising only in publications addressed by mail to a named adult or in a publication with 85 per cent adult readership or on signs where kids cannot see them. Even though you theoretically can do something in those areas, you still are committing a crime if it could be construed on reasonable grounds to appeal to young persons, notwithstanding they will never see it, or if it is lifestyle.
It is all very well for the lawyers to say, "I think you could probably take a chance with this ad or that ad," but for people facing two years in prison and a $300,000 fine, it is a darn difficult decision to make. In that sense, could people really put out an ad which might have some effect as a brand preference ad? No. You could theoretically put out something, and you have to put it in places where it is hardly going be seen, but you are taking an awful risk. I do not see how the wit of any advertising agency could produce an ad which I would advise a client they were safe in producing. I am not the one going to jail, and I think they would look at me and say that.
Senator Beaudoin: You conclude that it is equivalent to a total ban and, consequently, you say it is against the Charter and cannot be justified under section 1. The previous witness was of the opposite opinion.
What do you conclude from that? Suppose you are right. Does that mean the whole bill is ultra vires, or just these sections?
Mr. Irving: Remember, there are other grounds. The ones I mentioned earlier have nothing to do with RJR-Macdonald and the judgment of the court. A whole series of sections are unconstitutional on their face, and some of them are also unconstitutional because they impinge on freedom of expression as in the TPCA case. You take all those out.
Professor Schabas was talking about this being regulatory. You remember he said this is a regulatory thing and that they are regulating an industry. However, the courts are unanimous in saying the Parliament of Canada has no jurisdiction to regulate a single industry in Canada. It must justify it as criminal law. When you take out all those criminal provisions, which I believe would be taken out in short order by the courts, you will be left with a statute which says this is what you can put in cigarettes and this is what you cannot, and various other things, and it will be a regulatory institute and ultra vires because at that point it will not have a criminal element left in it.
Remember, you must be careful, because the Parliament of Canada has no jurisdiction over advertising. Advertising is a provincial matter. Irwin Toy decided that, and there is no doubt about it. The Parliament of Canada has no jurisdiction to regulate specific industries in Canada. That is clear law also. The only way it gets to this kind of legislation is by saying it is health legislation attached to criminal law. If the criminal sanctions are all unconstitutional, then it is no longer criminal and no longer valid.
Mr. Sofer: I appreciate the difficulty this committee has when the first witness says it is valid and the second witness says it is invalid. This is not a question of keeping score. However, Professor Gall said that there are problems in distinguishing a total ban and a ban which is a lifestyle ban, which includes almost everything. He recognized the difficult situation we are in. In response to questioning, Professor Lessard said that she too would have difficulty coming up with a brand preference ad which would not be covered by a lifestyle ban. I think that the preponderance of people are telling you there are difficulties in trying to determine whether it is a true ban or something short of a true ban.
Senator Beaudoin: Whether it is absolute or relative, or whether it is a restriction that could be justified or could not be justified, is at the very heart of the question.
Mr. Potter: Senator, with all due respect for Professor Schabas, I believe he is looking at it from a professor's chair. I encourage you, when you look at these articles, to look at it as if you had an ad in mind. You must ask yourself whether that ad can pass three hurdles. Can you satisfy yourself that no one would be able to construe that ad on reasonable grounds to be appealing to anyone under the age of 19? If you get over that hurdle, can you satisfy yourself that that ad will not evoke an emotion, positive or negative, or an image about a style of life such as one that includes several examples?
The third obstacle is clause 20. Will you be accused of using an ad which is likely to create an erroneous impression in anyone who sees it?
When you get over all three of those obstacles -- and I submit you cannot -- you cannot safely say to yourself, "I won't be punished for using this ad," but let us say you can. You then have to look at clause 22(2) and realize there are only three places you can put that ad. It cannot go in any stores, billboards or flyers. It cannot go anywhere except in a publication with a particular kind of readership, in the mail addressed to people by name, or on signs in places from which young people are prohibited by law.
After you get over your three obstacles -- and I submit you cannot -- you have to ask yourself, "Is it worth it for me to use the ad?" You do not get there either. You must come to the conclusion that this is tantamount to a full-blown prohibition, therefore the Supreme Court has already decided that it is an unsavable violation of the Charter.
However, even if you do not get there, you still have to ask yourself, "Does it go too far? Does this law satisfy the test of minimal impairment?" Once you realize that it cannot be used in any stores or on billboards, whatever the content of the ad, you realize it is overly broad.
Professor Schabas answered the question about the reversal of hundreds of years of British principle, that instead of telling people what they are not allowed to do, this law says you are not allowed to do anything at all, except what Parliament tells you you may do. Does it make a difference? He said it makes no difference; it is just two ways to get to the same result. It is obviously not, because a law drafted like that is, by definition, over broad, since the big package is all that you cannot do, whether the legislator has thought of everything that is in there or not.
Necessarily, promotions or communications or messages in that big package of things, which are prohibited, have nothing do with anyone's decision whether or not to adopt a behaviour.
Mr. Irving: Mr. Potter has been talking about the restrictions on where you can place these ads. You can place them, subject to all those restrictions, in magazines which have not less than 85 per cent adult readership.
The justification for this is that certain classes of advertisements will affect the smoking decision of young people. Canadian companies can put ads in publications with 85 per cent adult readership, but Americans can put any ad they want in any publication they want. Sports Illustrated, for example, does not have 85 per cent adult readership. It is full of all kinds of ads that are prohibited and criminal for Canadians.
If there were any substance to the government's belief that that kind of advertising is doing more than promoting a brand, how could you conceivably allow that to happen?
We hear accusations about cartoon characters being aimed at youth. They are in those magazines. That is still legal in Canada and will continue to be. The justification given in the TPCA case was that those brands are not sold in Canada. That may be true, but that is an acknowledgement that the ads only affect brand. If they affected the smoking decision, how could it be justified? Canadian tobacco companies are restricted to magazines with an adult readership and are totally limited in what they can put in the ads. Yet, Americans are allowed to put cartoon characters in any magazine. It cannot be justified.
Mr. Potter: Your last question was on severability. As a matter of logic, if you go through section 22, you realize it just cannot survive this test. You cannot then have the prohibition in clause 19 without the exception of clause 22.
Senator Beaudoin: I do not have any problem with that. I simply asked the question: If you are right, are all those clauses invalid?
Mr. Potter: I believe part 4 is entirely invalid, if that goes.
Senator Beaudoin: Logically, if you are right, yes. However, you say that it is the equivalent of a total ban.
Senator Nolin: Mr. Parker, you have stated a few times that you are supportive of the objectives of the bill. As a committee, we are all supportive of that objective.
Can you explain to us what kind of relationship you have had with the health department in the five years you have been in this job?
Mr. Parker: I wish I could say it was better, senator. I have spent a fair amount of time in Ottawa in a variety of roles in consultation between the private sector and the public sector. The consultations we have had with the department, the provision of information from the department and requests for information from the department have not been what I would have wished.
I cannot say that is entirely the fault of the department or of the industry. There is antipathy and fighting between the two groups. The ultimate purpose of the department, I suppose, to put it bluntly, is to put the industry out of business.
However, as we said at the outset, the industry accepts, because of the health risks associated with this product, that government will try to reduce tobacco consumption. We have no argument with that.
Senator Nolin: Are you ready to help the department to achieve that?
Mr. Parker: Are you speaking of youth smoking or adult smoking?
Senator Nolin: Youth smoking.
Mr. Parker: Absolutely. We have made that offer repeatedly. It has not been accepted.
As I said, I have some legitimate questions on how credible we can be, but we do have a fair amount of information on how smokers behave. That may assist government in developing working strategies.
Senator Nolin: Were the offers you made in writing, or in cocktail chit-chat with the minister?
Mr. Parker: We do not have cocktails with the minister, senator. We have met with him once since he was appointed, and that was last February.
The offer has been made verbally and in writing at various times and I will repeat it here for the record, as I have.
Senator Nolin: Mr. Irving, is the study you referred to the Smee report? I want to make sure that we have access to that document, because we will hear witnesses talking about that.
Mr. Irving: The study I was referring to was a literature review by a group of American researchers who looked at all the published literature on why young people take up smoking. I do not have it with me, but we can easily provide it to you.
As I say, it analyzed the literature and came to the conclusions I mentioned earlier. That was not part of the record in the TPCA case, because it was only published in 1992. We can provide you with that.
The Smee report is a British report named for Mr. Smee who was in the health department there. It is repeatedly referred to as supporting ad bans. However, I do not understand why. It did its own mathematical regression analysis.
Senator Nolin: We will hear from Professor Lewis.
Mr. Irving: Dr. Lewis would be very familiar with that, and so am I, but it is not to be forgotten that the Smee report was rejected by the British government.
Mr. Parker: The previous study about the reasons why people start smoking was done by three academics; Conrad, Flay and Hill. We can send copies of it to you.
Senator Nolin: I should like to have copies of that. That goes to the heart of the problem.
You state in your brief that you liaise with other sectors of the tobacco industry in Canada and throughout the world. What relationships do you have with your U.S. counterparts, as well as with France and countries where there is a ban on advertising?
Mr. Parker: We exchange information on a request basis rather than on our initiation, senator. Sometimes we ask other manufacturers' associations for information. The problem with these issues between here and the United States, let alone here and France, the U.K., Australia and so on, is that the political systems vary, the political agendas vary, the legislation is different, the smoking behaviour is different, and the sets of restrictions already in place and those proposed are different. I have been in this job for five years and in that time I have spoken to my counterpart in Washington twice -- once face-to-face and once by telephone.
Senator Nolin: I am referring to your international counterparts because you are referring to that.
Mr. Parker: Yes.
Senator Nolin: On page 13 of your brief, you talk about Australia, the OECD, Norway and France. I suggest you read about the Norway experience. There is a net increase in youth smoking to 45 per cent since they banned advertising. They have a big problem there.
Mr. Parker: I may have misunderstood you. That information did not come through other manufacturers' associations. The footnotes identify where the studies were done and the source.
Senator Nolin: Despite the highly competitive approach between manufacturers, do you still exchange data, expertise and information that would be beneficial to us in Canada?
Mr. Parker: We did exchange information. A good example is the series of Canadian government studies on prevalence that are outlined in the two charts to which I referred earlier. We have had those studies analyzed and we have made graphs out of them, as we have here. We routinely supply that to national manufacturers' associations that ask for them. We have asked other NMAs in the last few months for what information there is on what happened in France after the sponsorship ban in 1992 or 1993. There is a quotation there and the source of it is French. I do know exactly where that came from. Our librarian could probably tell you. It may have come from the manufacturers' association, but it did not originate there. That is someone else's document.
Senator Lewis: I gather you are manufacturers, not retailers.
Mr. Parker: No.
Senator Lewis: But you do the advertising?
Mr. Parker: Yes.
Senator Lewis: You are the advertisers?
Mr. Parker: We are not the only advertisers, although the manufacturers do the bulk of the advertising.
Senator Lewis: Like any other advertiser, the object of the advertising is to make sales.
Mr. Parker: Yes.
Senator Lewis: I gather from what you said that your object was to promote the brand share of sales or of the market, as you call it.
Mr. Parker: Yes.
Senator Lewis: But it is not a static market, I presume, because, as Senator Kenny has said, 40,000 smokers die a year. That number must be replenished somewhere. I take it that in promoting brand sales, you are promoting sales of tobacco generally. You must be aiming at a new market. In other words, you are really trying to promote people to take up smoking.
Mr. Parker: I do not know how I can put this more persuasively.
Senator Lewis: It would be rather incredulous for us to believe otherwise, would it not?
Mr. Parker: No. If that is what we are aiming to do, we have the most incompetent advertising and marketing people of any industry I have ever heard of, because the market has been going downward for 30 years. There has been no increase in the market. It is understandable that one company, or several companies, over a period of time, might have advertising people and brand managers that are less capable than their competition, but it seems kind of incredible that after failing for 30 years to increase the overall size of our market, we would still be trying to do so.
There is a terminological problem with this issue. Is company "A" trying to increase the size of its market? Is Imperial trying to sell more cigarettes than it sold last year? Yes. Are they trying to sell them to non-smokers; to persuade people who do not smoke now to start and start smoking their brands? No. Why? They do not know how to do it.
Do companies that sell gasoline set out to persuade people to drive more? That would be a way of increasing the overall size of the market. I have never seen an ad from any gasoline company that could be interpreted as saying, "Get in your car and drive more." It says, "You will enjoy your driving more; your car will function better; you will get better mileage, or whatever, if you drive with our gasoline." That is what is happening in the tobacco markets.
People do start to smoke every year, senator. There is no argument about that -- certainly not from me. Other people quit. The question is whether advertising causes them to make that decision. We see no evidence of that because, in countries where advertising is banned, the same phenomenon goes on. People decide to start smoking totally without the presence of advertising, marketing or promotion.
Senator Lewis: Maybe you are paying too much for your advertising.
Mr. Parker: Well, someone in the business said, about 40 years ago, "Half my advertising budget is wasted. The problem is, I do not know which half."
Senator Lewis: Surely it would be incredulous to believe otherwise; namely, that advertising will not increase the market.
Mr. Parker: It has not. The charts are before you and they are from government surveys.
Senator Lewis: The market is not fixed at a certain number such that you could just divide it up among yourselves. If that were the case, you could go into a room and fight it out and say that this year Imperial will take so much, and so on.
Mr. Parker: The Competition Act has a few paragraphs on that.
Senator Lewis: There may be another way of doing it such as drawing swords, or something like that.
I presume that advertising includes so-called sponsorships. I do not want to get into that topic, but that would be part of your overall advertising, would it not? Do you have a gross figure for advertising costs for the tobacco industry,
Mr. Parker: The sponsorship figure is approximately $60 million a year. That covers two categories of spending. One is the amount of money that is given to an event organizer to put on their event. If you are mounting a fireworks festival, for example, and want to be sponsored by my company, you will tell me what you will do in terms of recognizing the sponsorship, signage and promotion. You will use that money for a variety of things, but basically it is seed money to get your event off the ground, to help you sell tickets and make commitments to the artists or to the teams that will compete. In addition to that, the sponsoring company will spend some money on its own advertising of the sponsorship. Both kinds of advertising promote the brand. The total figure for product advertising and sponsorship and sponsorship advertising is between $70 and $80 million collectively by all three companies in pursuit of $220 million in shifting revenues.
Senator Lewis: That would be the total advertising bill?
Mr. Parker: No, the $220 million is the available new revenue from sales as a result of the advertising. They are spending $80 million to try to make their share of $220 million.
Senator Lewis: So $80 million is the total?
Mr. Parker: Yes.
Senator Lewis: How do you treat that on your books? Do you treat it as advertising, or does any get charged to charity?
Mr. Parker: No. What the companies classify as sponsorship are promotional expenses and are used as a business expense. Each of them have philanthropic or donations budgets; however, those are also business expense items, if I understand the tax law.
Senator Lewis: That would be separate from the promotional, would it not?
Mr. Parker: Yes.
Senator Milne: Are the vast majority of your advertising costs through sponsorships?
Mr. Parker: Yes. One reason for that is that until a year ago last September advertising of the product was illegal.
Senator Lewis: Before 1989, what would be the total?
Mr. Parker: I can get that information for you, senator. I should not speculate.
Senator Kenny: Mr. Parker, you may not agree, but a study done by the University of Berkeley in 1994 indicated that tax and education combined would have an impact on reducing smoking.
Mr. Parker: In general, I would not disagree with that proposition. As I said earlier, there is a connection between price and consumption, particularly for young people. The problem in Canada was that the price was so high that smuggled cigarettes became ubiquitously available, even to young people. I would not disagree that education and price together have a role to play in this.
Mr. Potter: As a matter of constitutional and Charter law, senator, it is clear also that lawyers who may complain about an attack on freedom of expression cannot complain about the government putting out more information rather than making less information available to people.
Senator Kenny: Mr. Parker, if you do agree that tax and education would have the impact of reducing smoking, why do you state in your brief that no product manager can risk that the same effect would be achieved if no one else advertised? We see here a terrific defence for your rationale for market share; yet we see nothing about what you folks are doing for the 40,000 Canadians who are dying every year. We do not see any program on your part. You talk about $800,000 that may go to educate retailers. How about spending the same amount as you do on promotion on educating our young people?
Mr. Parker: Senator, governments take in $6 billion annually from tobacco products. Governments make far more from this product than the manufacturers ever have or ever will. Governments have spent tens of millions of dollars -- certainly for the last decade, but going back further than that -- aiming at doing precisely what you suggest. They have not managed to move the rate one iota in that period of time.
Are you suggesting that we should jump in and say, "We will persuade young people not to smoke where government has been unable to do it?" As I have said several times this afternoon, we have told government that we are willing to work with it on this problem.
A program to tell kids that they should not smoke, started voluntarily by the industry that is selling cigarettes, would be attacked most vocally by witnesses from whom you will hear later this week -- the anti-tobacco people. They have said that the program to tell retailers not to sell to kids was a disguised promotion. There are limitations to the amount of nonsense the industry wants to get into with those kinds of critics.
We are serious about wanting to help young people stop smoking. If you can suggest productive ways that we can work with government, I would be happy to hear them.
Senator Kenny: You appear to be serious about playing the game that tobacco companies have played for generations. You bob, you weave, you duck and you bring with you high-priced lawyers and you find ways to con the Canadian public into buying your product. Nobody believes it and nobody accepts it. You are fighting a rear-guard action and you are trying to buy time from this committee and from this government.
Mr. Parker: No, senator.
Senator Kenny: Why do you not have something more productive to help us get young kids off cigarettes than you have shown us here? You say you want to cooperate. You say you think it is a bad thing. Instead, we get the same old flack from the companies. All you are trying to do is buy another couple of years while we have kids and adults dying from cigarettes.
Mr. Parker: We are not the ones who made this a legal product. That is your responsibility. If this produce is made illegal, these companies will be out of business.
Senator Kenny: We understand that. We also understand that if we get into that sort of conundrum we will have the same problem that we had with prohibition. We know that you folks are selling an addictive product. We know that if we ban it we will have the roaring twenties all over again.
Do have you a strategy designed through your promotional activities to set up surrogates to defend you?
Mr. Parker: No.
Senator Kenny: I do not get lobbied by tobacco manufacturers. I get lobbied by the sports and culture groups and all the people who you have got addicted to tobacco money. Why is that?
Mr. Parker: Senator, are you suggesting that Grand Prix racing is a tobacco industry front?
Senator Kenny: Yes, that is exactly what I am suggesting. I am suggesting that you folks sat down and devised a marketing plan that would have a political impact here in Ottawa. You organized a lobby across the country by picking a variety of groups that would, in turn, come and lobby us on your behalf.
Mr. Parker: Senator, they will appear before you. I guess you can ask them the question. I will tell you the answer from our perspective. It is wrong. We did not do that. For 25 years, individual companies have competed with one another to sponsor appropriate community sporting and cultural events. They change sponsors from time to time. Those partnerships are important to the companies. They support the organizations that put on the events. The people who organize the events came to the industry when the government produced this bill and said, "We want to fight it because we think this bill will put us out of business." The companies said, "Yes. We will support that." That may be a front organization by your definition, but I just cannot agree.
Senator Kenny: Mr. Parker, what are you and your companies going to do to stop from dying the 40,000 Canadians who die every year? What are you and your companies going to do to stop the $3 billion a years in direct health costs and the $10 billion a year in overall costs to Canadians?
Mr. Parker: Senator, these companies make a product that is purchased by 7 million adult Canadians. They will continue to make it and to sell it as long as it is legal. They will continue to obey the law in every aspect, including labelling on the packages and all the new regulations and requirements that will be coming at us if this bill is passed in whatever form. We will continue to advertise the product to the extent that it is legal and permitted. We will continue to promote a ban on sales to minors by informing retailers, as I have described earlier. We will continue to work with any responsible agency that wants to talk about ways of reducing youth smoking.
There are health risks associated with this product. There is a list of diseases as long as your arm, and the risk of contracting them rises as you smoke. Everyone in Canada knows it. Because those risks exist, we think smoking is an adult decision.
If the government or the legislatures of Canada decide to deal with this by a different legislative approach, we will live with that. If they decide to ban the product, we will have to live with that. However, we cannot do anything more than we are doing now, unless you have an additional suggestion for us.
Senator Kenny: And you have no responsibility beyond that to your shareholders' profits.
Mr. Parker: That is not what I said, with respect.
The Chair: I think we have your point, Senator Kenny.
I have some questions I would like to put before you which have to do with several studies I have recently read. I want your opinion on those studies. One is a youth smoking study, with which I am sure you are familiar. It was sponsored by Health Canada, although it was not conducted by Health Canada.
It states the following:
Awareness by Canadian youth of events and activities sponsored or promoted by tobacco corporations is significant. Forty-nine per cent of all youth aged 10-14 and 51 per cent of those aged 15-19 report seeing advertisements for events sponsored by tobacco corporations....
Eighty-five per cent of smokers and 83 per cent of non-smokers --
-- and that is within this target age group --
-- agree that these "billboards and signs are a way of advertising particular brands of cigarettes". Finally, 43 per cent of smokers and 58 per cent of non-smokers agree that these "billboards and signs are a way of encouraging people to smoke".
Mr. Parker: I read that study. There are two or three things I ought to point out. The first is a point made in many studies on the topic of advertising and sponsorship with regard to youth and adults as a whole. Awareness of advertising is not a decision to act on the advertising. We think there is a distinction between cigarette advertising and advertising for the event by a cigarette company. I guess it does not matter much whether other people do or not. However, that is still not the real issue. Even if 100 per cent said they had seen the event advertised, or they had been to the event, it seems to me that the question is, "Did you smoke as a result of this?" The last line you read was that they believed it encouraged other people to smoke, but it is an unsupported personal opinion in an opinion poll.
It is possible for anyone to have an opinion about anything, and they can have one without evidence. They only say, "I believe that", and that is fine, as ours is that kind of a country.
We keep coming back to all of the countries in the world that have had advertising bans and sponsorship bans and ask the question which we have asked of Health Canada. They know as well as we do about the countries where those bans exist and have for a long time. The dog that did not bark, in this instance, is the research that Health Canada did not commission. They did not ask anyone to go to those countries and examine what results have actually been achieved during the time those bans were in place.
You see some empirical and short form evidence in our brief from a variety of the countries concerned, but Health Canada was in a position to do full studies on them; to talk to governments. The minister said he met with the minister of health from France and he knew that the races were still run and that the logos were not on cars.
One of your members asked what happened to the smoking rates. The minister said that he would get you the figures. I understand that they have not arrived. We have understand that the smoking rate in France today for youth and adults is identical to what it was the day the ban was introduced, and in the face of that we have this question that you heard about this legislation.
The Chair: Mr. Parker, I would be the first to say that I do not think advertising is the sole reason young people smoke; neither do I think it is the most significant reason people smoke. I think the most significant reason is peer pressure. I think there is no question about that whatsoever.
However, I find it difficult to accept the position that advertising has no influence on persuading young people to smoke. I say that because all the studies I read indicate that if a young person has not started to smoke by the time they are 19 years of age, the chances are they will not smoke. Something is influencing them. I would say that the big "something" is peer pressure but that there are other things as well.
I also have a study conducted by a New York ad agency, Shepardson, Stern and Kaminsky, which was released in December of 1996. About two-thirds of the 300 advertising executives were questioned about the influences. They said they believe that the goal of cigarette advertising is to target teenagers, and 82 per cent of those surveyed think teenagers are getting the smoking message.
Now, if the advertising industry thinks that the goal of advertising is to target teenagers and you people do not believe that, do you not have the wrong advertisers?
Mr. Parker: I do not know that study, senator. I would certainly appreciate seeing a copy of it.
That study seems to be dealing with advertising executives who said they believe that the industry targets teenagers; markets to teenagers. You will hear from a witness who makes a career out of making that accusation about tobacco companies here, and you may find it instructive to compare what he has said to House of Commons committees, or what he may say to you, with what he said under oath in the TPCA case, because I can assure you that the statements are quite different because the evidence is not there to support the contention.
If you say it is a matter of personal opinion, as these advertising executives did, or that they believe the kids are getting the message, I do not have any quarrel with a personal opinion of that kind. I do not agree with it, but I do not quarrel with it. The problem is that the evidence is not there.
Is there a clear pattern between the heaviest expenditure on advertising Joe Camel, as an example, and youth smoking of a particular brand? No. By and large, the brands that youth like the most are the brands that are the most popular across the smoking spectrum at all age levels. Are there exceptions? Yes, there are. There is a brand in Europe called Death. It is a black package with a white skull and cross bones and it is aimed right at kids. That is what the company said. They have a white package with a black skull and cross bones which they call Death Lights.
They aim this at kids precisely for reverse marketing; at a group of adolescents who think Doc Martens are an attractive fashion statement. While the company was in existence, it ran its marketing exactly that way: "Don't smoke. If you smoke now, quit. If you don't smoke now, don't start. This is a terrible product; don't buy it." How do youngsters, rebellious by nature, react to a package like that? They want to carry one around in their pockets.
Mr. Sofer: Yes, there are studies which make the kind of claim you just read out. However, we had a rather unusual experience. We went through a 70-day trial not long ago in which the government called experts from all over the world to say the very things which that particular study said. We went through the Canadian court system; the only thing that people can do when they wish to challenge legislation.The government had the opportunity to bring all the witnesses it wished.
Yes, there are certainly people who will say, "In my opinion, tobacco advertising is aimed at kids and it drives the market." All of those things were said, but when it came to the legal process in this country, when we were able to look people in the eye and ask them questions, a judge of the Canadian court, who was upheld by the Supreme Court at the end of the day, said, "This amounts to nothing more than speculation; this is only opinions." The government's chief witness said, "I do not even believe him. He has distorted his numbers to get his answers."
The Supreme Court agreed with all of that, except it thought that, as a matter of common sense, lifestyle advertising could be regulated.
Certainly you will find that many people will give that opinion. However, we have not yet arrived at the point in this country where we simply act against Supreme Court rulings in the hope that the next time there will be other witnesses and a different judge. That would be like the referendum in Quebec; continuing on until you get the answer you want. That is not our system. We had a very full inquiry into all of these issues, with that result.
Mr. Potter: The message from the Supreme Court is that even if you do take for granted that some advertising is a factor, however weak, in the overall mix of factors, and even if you do that without any direct evidence, as the Supreme Court did, the question remains: Is it then necessary to do away with it at all or to do away with an envelope so large as the one provided by Bill C-71? That is the question facing your committee; whether Bill C-71 has not again, repeating a mistake which has already been made, gone too far.
The Chair: You were asked earlier if you had done any market research on sponsorships. I should like to know whether you have done any market research on non-smokers. If you have, would you make it available to us?
Mr. Sofer: I can answer that question for RJR-Macdonald. On the record in the TPCA case, no. To conduct an advertising campaign, you must research the people you are targeting. If it is women's products, you talk to women; if it is men's products, you talk to men. It is just common sense. They and the government witnesses had to acknowledge that, having looked at every single piece of research for 15 years, they never interviewed anyone who was not 18 years or over and a smoker.
There is one study, about which Professor Pollay never ceases to talk, called the Youth Study. It was not an RJR-Macdonald study; it was a universal study. I have forgotten who did it. It was done to get youth attitudes in general, and anyone who wanted could sign on to that study.
As Professor Pollay will tell you, RJR-Macdonald signed on. He will not tell you, although we can provide you with it, that they wrote a letter to the company saying, "We do not market to anyone under the age of 18. We do want to know about youth attitudes, but we only want to know your results for the 18- to 24-year-old group." I believe the study was looking at the 15- to 24-year-old group. RJR-Macdonald specifically asked for the results on the 18- to 24-year-old segment only.
Professor Pollay will not tell you that, but he will tell you that we signed on to the Youth Study. That is the only one we signed on to and for all the rest we never looked at anyone except 18-year-old smokers.
Usually, they tried to get smokers of Imperial because they were trying to find some way to switch them over. That is the way they would do it.
Mr. Potter: Completeness compels me to say that Imperial gave all its documents to the government experts in that case. There are no marketing studies directed at non-smokers. However, there is a document which some of the anti-tobacco activists present as one that is, and that is a public document. It was filed in that case. It was called the Viking Study. It was an attitudinal survey, the purpose of which was to determine whether Imperial might use its marketing or advertising techniques to give a message which might affect the overall atmosphere in which tobacco was discussed in Canada. It concluded that it could not, so that is the end of that.
Senator Nolin: Mr. Parker, I wish to go back to this program with the coalition of partners directed to retailers. I asked you if you asked the government to be part of that coalition, and the answer was no. Did you make that offer in writing?
Mr. Parker: We wanted to do two things in setting it up. The first was to get any advice that the government had on doing it. We were doing research. Second, we wanted to explore with government whether it would be useful in what they were doing with retailers to have them recommend this to retailers. What does "endorsation" mean? Could they recommend it? Could they say this is one method that might work, and are there others? Could they say this is the best method they have seen? Could they become a member of the coalition but not have to spend any money? All of those were possible.
There is a political atmosphere not only in Health Canada. Some of the anti-tobacco groups the government funds feel exactly the same way. It is just not politically correct to be seen talking reasonably to the tobacco industry.
The result was that we had an informal review of the material, and I do not think any substantive comment on it. They found nothing to criticize. They had a few suggestions, which were followed.
The Chair: Thank you very much for what I am sure was a somewhat difficult afternoon for you. You added to our base of knowledge, which is our objective. We appreciate your time and attention.
Mr. Parker: Thank you, senator.
The committee adjourned.