Proceedings of the Standing Senate Committee on
Legal and
Constitutional Affairs
Issue 56 - Evidence
OTTAWA, Wednesday, April 9, 1997
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-70, to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts, met this day at 3:20 p.m. to give consideration to the bill.
Senator Sharon Carstairs (Chair) in the Chair.
[English]
The Chair: Good afternoon, honourable senators. The minister is with us this afternoon. I have just been informed that he has less time with us than I thought he had.
Therefore, I will rule that questions from members on the opposition side will take precedence over questions from the government side in order that you can be sure to get your questions in.
I am told that the minister has only one hour and 15 minutes to spend with us. I had understood he could stay with us until five o'clock. We will, therefore, defer to the opposition side.
Welcome, Mr. Minister. Please proceed with your statement.
The Honourable David Dingwall, M.P., P.C., Minister of Health: Honourable senators, I followed your hearings with considerable interest. I would like to address some of the matters which have been raised and answer any questions you may have.
In the past weeks, this committee has heard from individuals and organizations who have expressed diverse points of view on issues related to Bill C-71 whereby we will legislate in four key areas: access, labelling, product regulation and tobacco promotion.
Sixteen months ago, my predecessor released the tobacco control blueprint, a consultation document that set out the legislative directions proposed by the federal government. At this point, we have received about 3,000 submissions regarding tobacco legislation. There were numerous organizations that carefully examined the document and submitted analytical briefs.
Based on these briefs, we held consultations with the tobacco growers, manufacturers, distributors and retailers; arts organizations, including representatives of major festivals; sports associations and major national health groups. We also consulted with provincial and territorial governments.
For the edification of the committee, I wish to table a list of those who submitted comprehensive briefs, which I am sure the clerk will want to have.
Where it was possible for us to accommodate the concerns of interested parties without compromising our health objectives or departing from the guidance of the Supreme Court, we have done so.
When retailers told us that the blueprint proposal to restrict the display of cigarettes at retail to one package per brand would not work in practice, we modified that approach.
At the time the legislation was tabled, the tobacco industry expressed the concern that Bill C-71 would prevent them from distributing their products across provincial boundaries. To further clarify that distribution between manufacturers and retailers would not be affected, we amended the clause on interprovincial delivery during standing committee consideration in the other place.
Growers feared that the bill would unduly interfere in the internal workings of their industry. At report stage, we amended the definition and application clauses of the bill to assure them that it focuses on matters which touch the public rather than the internal workings of industry.
To respond to the concerns of the producers of tobacco-related accessories like matches, we amended the relevant clause to confirm that it was never the government's intention to control the distribution of accessories bearing logos other than those of tobacco companies.
Finally, as we are all aware, some of the proposed restrictions on tobacco sponsorship promotion will not go into effect until October of 1998. This implementation period responds to the concerns of tobacco-sponsored arts and sports groups.
You have all seen the amendments submitted by the Canadian Tobacco Manufacturers Council. They have proposed amendments which would essentially transform the bill before you to a bill much like the Tobacco Products Control Act which they fought to have defeated by the Supreme Court.
I am sure all members of the committee have this. This is a summary of the list of all the amendments the tobacco industry has asked me, as the minister responsible, to implement, which, in essence, would take us back to where we were previously.
You have heard from critics who disagree with Bill C-71. They suggest that the bill is unreasonable. One witness even referred to it as fatally flawed and unconstitutional; a reimposition of the provisions struck down by the Supreme Court of Canada. He also suggested that it is difficult to imagine a tobacco promotion which would not send the advertiser to prison.
When I appeared before you previously, I talked about what this legislation will and will not allow. I explained that it has been carefully tailored to respect the guidance of the Supreme Court of Canada. The bill provides for a series of comprehensive restrictions on tobacco promotion; not a total prohibition. Tobacco companies will be allowed to communicate information to their adult customers. However, the use of lifestyle and youth-oriented approaches will be restricted.
Despite claims to the contrary, it is possible for me to show you some examples of the kinds of promotions that would likely be permitted under the new legislation. For instance, this ad for Player's Première is along the lines of what you would expect to see after the act comes into force, with the warning on the bottom 10 per cent. Is that unreasonable to ask of the tobacco companies as we proceed with our legislation?
Once the sponsorship restrictions take effect in October 1998, one might see ads like this one for sponsorship by Export "A" of extreme skiing. We have simply moved the brand name to the bottom 10 per cent of the ad as an illustration. This would be acceptable.
I will now show you what would not be acceptable. The difference, I suggest, is not an unreasonable difference.
Perhaps this could be circulated to members of the committee.
Senator Jessiman: I can see no difference.
The Chair: For clarity, senators, the one with the brown backing is acceptable and the one with the white backing is not.
Senator Nolin: Minister, is what you have showed us the poster that they will be allowed to post?
Mr. Dingwall: Yes. Or, in terms of reasonableness, you might see one of Canada's greatest, Jacques Villeneuve, appearing in a suit bearing the corporate colours of his tobacco sponsor, but not the company's logo, as he does when he competes in some European countries.
This is what it would look like. It contains all the colours of a tobacco company, but not the company's logo. That is used in European countries.
I would like to take this opportunity to reiterate my willingness to explore the establishment of a pre-clearance mechanism which would assess promotions, in advance, to determine whether or not they comply. I see this as a very effective way to give event organizers the certainty they need for planning purposes. At the end of the day, this bill is not about arts and it is not about sports. It is about health.
Justice McLachlin, writing the decision of the Supreme Court of Canada on the Tobacco Products Control Act stated:
...even a small reduction in tobacco use may work a significant benefit to the health of Canadians and justify a properly proportioned limitation of right of free expression.
We are placing, in my view, reasonable limits on tobacco promotion to protect the health of Canadians, particularly young Canadians. Tobacco marketing strategies create and maintain the perception that tobacco use is desirable, socially acceptable, healthy and more pervasive in society than it really is.
The industry itself acknowledges that. For example, an Imperial Tobacco document entitled "Overview 1988" was submitted in evidence to the Supreme Court of Canada in 1995. It states that the marketing objectives and philosophy should be to:
...support the continued social acceptability of smoking through industry and/or corporate action, (e.g. product quality, positive lifestyle advertising, selective field activities and marketing public relations programs).
Recent developments in the United States have sharply focused attention on the marketing activities of tobacco companies. About three week ago, an American tobacco manufacturer, Liggett, admitted that the U.S. tobacco industry specifically targets youth. U.S. Vice-President Gore said that the company has "publicly acknowledged what we have all known for years". Other U.S. findings support this conclusion. A survey by the National Centre for Tobacco-Free Kids found that 76 per cent of teens believe that cigarette ads intentionally target them.
While this is interesting, the real issue is not whether tobacco companies knowingly target young people, it is whether their promotional strategies reach and influence youth. We know that they do. Young people are exposed to ongoing and pervasive strategies that blanket the environment with tobacco promotions. The industry contests such facts with claims that "No one ever took up smoking after attending a tobacco-sponsored event."
We have never suggested that the relationship between tobacco promotion and youth smoking is that simplistic. Attending a tobacco-sponsored event is just one instance of exposure to tobacco promotion.
Whether they are marketing soft drinks or cigarettes, marketing professionals know that there is no one ad or promotion that will translate into instant sales. They know that the cumulative impact of their promotional strategy is what ultimately affects consumers, not a single ad or a single poster.
In the case of tobacco promotion, each of the dozens of brands on the market in Canada attempts to sell its own uniquely appealing brand image.
With regard to marketing experts, I wish to quote from a study by Professor Richard Pollay:
Content analysis of advertising shows that cigarette advertising imagery largely consists of pictures of health and images of independence, which are known to the industry to resonate with adolescent needs for autonomy and freedom from authority.
Children and teenagers process many conflicting messages, and tobacco promotions are only one of them. Often, they acknowledge the health hazards of smoking, but tend to discount longer-term health effects and to emphasize more immediate needs like staying slim or being part of the crowd. Tobacco promotions, whether they show the package or promote a tobacco-sponsored event, reinforce and respond to these needs.
The National Cancer Institute of Canada puts it this way:
In sum, both qualitative and quantitative studies examining the effects of advertising on adolescents suggest that the content of advertisements influence attitudes, beliefs and values related to tobacco. They do so by portraying benefits of smoking that resonate with the issues and concerns of adolescents; namely, peer bonding, social approval, independence/autonomy, self-image, body image, adventure-seeking and normative behaviour.
Other countries such as France and Australia have also acknowledged the existence of a link between tobacco advertising and smoking. President Clinton has firmly set the United States on a course quite similar to Canada's, with restrictions on tobacco advertising and promotions because of their effect on young people.
In this country, the Supreme Court of Canada has already recognized a link between tobacco advertising and consumption and clearly confirmed that the federal government has the right to restrict tobacco advertising. This legislation is important. That is beyond dispute. However, as I have said before, both here and outside, it is not the panacea.
Clearly, there are many reasons why people start smoking -- invariably as kids -- or keep smoking as adults. Individual decisions on each of these issues are based on factors that include self-esteem, how much it costs to smoke, and to what extent smokers are concerned about the health consequences of their habit. Other factors include the behaviours of friends and family and environmental influences, such as the messages conveyed by tobacco promotion.
We also know that physical addiction plays a strong role. The United States Surgeon General has found that nicotine is as addictive as heroin or cocaine.
Furthermore, when the president of the Canadian Medical Association appeared before you, she confirmed that "children are more vulnerable to addiction".
The World Health Organization and national governments around the world recognize that the best way of arresting this global public health epidemic is by adopting a comprehensive approach to tobacco control. Canada has such an approach. The federal government has many partners in this effort -- all of the provincial and territorial governments, as well as the national non-governmental organizations.
While Canada has been recognized as a world leader in tobacco control, due in large measure to our legislative undertakings, we have also used a number of other means. During your hearings, various parties have asked: What percentage decline in the number of people who smoke or how much they smoke is directly attributable to one or another of our tobacco reduction approaches?
It would be nice if it were that simple. However, I suggest to you it is not. The strategy must be examined in its entirety and, even then, it is only part of the picture. Governments and their partners are only some of the players. Other people, such as parents and loved ones, also have a role to play in reducing smoking across the country.
As Minister of Health, I am concerned that the percentages of people smoking has remained relatively stable in recent years. It troubles me even more that anyone would point to this and suggest that government's efforts have been in vain. We know that we have helped people to quit. We know that there are young kids out there who have decided not to take up smoking because of programs in the provinces, in their schools and in the various communities across the country which help them to develop the behavioural skills to better resist the social pressures that can lead to smoking.
Are our critics really suggesting that these people do not matter? How many more Canadians might be smoking today if governments; federal, provincial and municipal, and committed national, regional and provincial organizations, as well as individuals, had given up on reducing the use of tobacco?
Your support will allow this legislation to become an important part of tobacco control in Canada. We will now begin to change the environment. We will be making it more difficult for youth to purchase cigarettes. We will be ensuring that Canadians get more information about the harmful consequences of tobacco use. We will be limiting exposure to promotions which convey that it is okay to smoke. We will be prepared to regulate tobacco products as our knowledge of science and consumer behaviour evolves in the months and years ahead.
You have heard the testimony of many individuals and groups who are opposed to these measures. Tobacco control policy has never been easy. Many of the arguments you have heard in the last few weeks are the same arguments my predecessor, the Honourable Jake Epp, was confronted with in 1987. These are not easy decisions. I have no illusions about that. However, these are measures which will help keep children from starting to smoke. I think Canadian children deserve politicians who will make the tough decisions that I believe are essential for their health.
That concludes my opening statement, Madam Chair. I will do my best to respond to the questions of honourable senators. If I cannot answer the questions, I will be candid enough to say so.
Senator Lynch-Staunton: Minister, I want to repeat, so that it is well understood, that there has never been any disagreement on this side with the thrust and purpose of this bill. As you have pointed out, this bill is the result of Minister Epp's bill being struck down, in part because it went beyond what the majority on the Supreme Court of Canada thought were appropriate limitations. Hopefully, this bill corrects that.
If we have a problem with this bill, it is with the fact that much of its wording is very general, even vague, and can lead to conflicting interpretations. It is a general statement of intent, for the most part, rather than a definitive guideline on how to meet that intent. Much of it can only be implemented through regulations.
We have been through this before, but even your colleagues on your side in the other place felt very uncomfortable with the powers that would be given to the Governor in Council with regard to how this bill would be implemented through regulations. As a result, an amendment was introduced which would ensure that no regulation would go into effect until it was first scrutinized by a House of Commons committee. That is certainly a step in the right direction.
I emphasize this because I do not know how many people realize that, if this bill is passed in its present form, it will give the government a right of supervision and direction on every phase of the manufacture of a tobacco product, from the content and make-up of the product to its packaging, marketing, advertising, promotion and retailing.
We are being asked to make government the main director of a legal industry in Canada. I cannot think of where the government has intervened or wants to intervene to such an extent, and to do so through regulation.
The amendment which was brought in to allow a House of Commons review of the regulations is a step in the right direction. However, we feel it should be written in such a language that Parliament will be obliged to review these regulations, rather than just have them presented, forwarded to a committee and then disposed of in any time frame it wishes. To be more precise, the bill says that the regulation as proposed will be laid before Parliament and referred to a committee which may conduct inquiries or public hearings.
We feel it would be more appropriate that the regulations be laid before the joint committee for the scrutiny of regulations. We feel that they have a great deal of experience on the study of regulations and it seems to be the logical choice for studying regulations. Rather than make it optional to conduct studies and hear witnesses, we would make it an obligation, and put in "...which shall conduct inquiries and public hearings". There would be a sense of relief that Parliament is not totally abdicating its responsibility on the implementation of this important legislation, that at least it will have a say on the fine-tuning and the details.
My point is that if Parliament is to review the regulations, it should be obliged to do a proper review by holding public hearings and hearing expert witnesses, not to prolong or delay the implementation of the regulations, but to ensure that they are what they are intended to be. The regulations should then be referred to the House of Commons. The Senate should not be called upon to give final approval. Let that be the obligation of the House of Commons. The Senate would contribute to the study and the House of Commons would determine in what manner they should be disposed of.
That is a long way to get to the question. However, this regulatory power is an important component of the law which the government is requesting.
Would you be amenable to amending clause 42.1 to meet the concerns which I have just expressed?
Mr. Dingwall: Honourable senators, your colleague has made a substantive intervention which I take very seriously.
With lawyers from the Department of Justice, we carefully examined the decision of the Supreme Court of Canada over an extended period of time to ensure that we would, as best as humanly possible, follow the directions and guidance of that court.
The concerns which you have expressed are those that I expressed to the drafters of the legislation. We sent it back for changes which I think make it more palatable, particularly as it relates to the issue of certainty. This was done not only for the industry, but for all the health groups and citizens of the country.
Under normal practice, regulations would be gazetted. We have added to that in terms of checks and balances to ensure that regulations do not become overly onerous where they do not meet the pith and substance of the bill itself or its broad-based purposes.
As a result, we have said quite clearly that from day one we will consult the industry and affected groups on the kinds and content of regulations in advance of the gazetting of them.
The third step we have taken is to include a pre-clearance mechanism to give supporters of events an opportunity to have their concerns dealt with quickly and effectively deal in order that there be no breach of any part of the regulations or the act thereafter. We believe those to be three major components of the bill and the regulations.
Finally, we have made reference to a parliamentary committee. It is not for me, Madam Chair, to judge what the committee may or may not do. However, I cannot believe that the committee which would be seized with this would consider it a light-hearted task.
I am certain that the industry and the health groups will be ever vigilant. If there are changes to regulations and the review of those regulations, I am sure that they will come to the table with their cases well thought out. It is my desire that we do not reach that stage unless it is absolutely necessary. It is my desire that the consultations happen quickly with all the affected parties, with the gazetting and pre-clearance mechanisms that are needed to address the concerns of individuals and organizations, wherever they may be, with regard to the bill and the regulations.
I take what you say very seriously. We have gone a long way to ensure that your concerns can be addressed through the processes we have put in place.
Senator Lynch-Staunton: Let us be clear. Regardless of whether the parties unanimously agree with the regulations, they still must go before the House of Commons committee for approval. We are in agreement with that but want to ensure that the House of Commons committee conducts a proper inquiry. Let us make that obligatory rather than optional. We seem to be in agreement on the intent.
Another concern I have, which I have discussed with Mr. McNaught, is with regard to search and seizure. The bill allows an inspector to enter a premise without the approval of the owner or the occupant and, without a warrant, seize whatever material he sees which he has reasonable grounds to believe violate the law.
It seems excessive to give any individual the power to enter any premise, other than a dwelling place, without a warrant and with the right to seize goods, without the approval of the owner of the goods or the person responsible for them. Illegal drugs are seized with a warrant. I do not know why legal drugs would not have the same benefit of the law. I know that question will be answered.
As Mr. McNaught said, there are federal statutes which apply so that if an inspector sees a violation of the health code, he can seize the contaminated goods right away. However, the person who handles the goods usually holds a permit. The condition of the permit, if it is for food, for example, is to ensure that those goods are kept in a condition suitable for consumption. In this case, we are talking about individuals who have no permit or any sanction from the federal government to engage in the trade in which they are involved. However, they are committing themselves, through Parliament, to advertise and display goods in a certain manner. If they violate those obligations, surely the least the government would allow is that a warrant be sought before the goods are seized.
Once the goods are seized, it is the obligation of the owner of those goods to go to court and give arguments to reclaim them. There is an onus on the owner of the goods right the beginning, which many of us find very unfair. Can you comment on that?
Mr. Dingwall: Honourable senators, that issue has been raised before and Mr. McNaught has responded to it.
If memory serves me right, several of the experts who came before the committee have endorsed the provisions in relation to the regulatory mandate and have basically affirmed that the bill, under those clauses to which you have referred, namely, clauses 34 to 42, does not violate the Charter.
I wish to observe, first, that under the provisions of clause 34, the minister does designate someone. Second, there is no appreciable difference between this kind of statute and that of the Food and Drug Act. Third, for the purposes of prosecution, a warrant would have to be levied by a justice of the peace.
You are quite right that the onus falls upon the individual to make an application after the goods have been duly seized. That is not overly onerous. If the inspector's behaviour is found to be unreasonable, one can always seek remedy through an injunction or by applying to the court for mandamus to order that certain behaviour be corrected.
I hear what you are saying, but I would not agree that this is overly onerous.
Senator Lynch-Staunton: There are provisions of this kind in other legislation. Simply repeating them does not make them better. In other legislation, we have the reverse onus provision. That is found in the gun control bill that we passed, and it is contained in this bill, too. We do not think it is right for Parliament to shift the burden of proof onto individuals. The power of the government is strong enough; it should not strip away the minimum protection which we assume is allowed to the individual.
In this case, an inspector may seize any tobacco product or "other thing". It does not say what kind of thing. It does not say if that "thing" is related to the tobacco product. During inspection under this act, an inspector may seize any tobacco product or other thing by means of which or in relation to which the inspector believes on reasonable grounds that this act has been contravened.
That is a wide open right to go in and seize everything. If at least it said, "must go before a judge and ask for a warrant and explain the reasons why", as traditionally happens, then let him go in and seize what he wants to seize. However, this is carte blanche. It is up to the individual from whom those goods have been seized to take the initiative to get them back. They are stored and the inspector does not even have to lay a charge. There is nothing in this bill which states that he must lay a charge or take him to court for a violation.
This gives the inspector extraordinary power which can lead to tremendous excesses. If my interpretation is correct, I think that Parliament would not be acting responsibly if it let this pass.
Mr. Dingwall: We may have to agree to disagree.
Senator Lynch-Staunton: Do you disagree with my interpretation?
Mr. Dingwall: I do not share the conclusions that you have expressed here today. As I have said, my interpretation of the bill as written has been validated by the experts who have come before you and by senior officials of the Department of Justice assigned to my department. We do not share your conclusions on that matter.
The burden of proof still lies with the Crown. The Crown still must prove its case beyond a reasonable doubt. That does not change. The case law is clear on that. That is why the experts who appeared before told you that this is all right.
Senator Lynch-Staunton: There is nothing here that indicates that the Crown is obliged to lay a foundation of proof. All the articles on this say that the obligation is on the person from whom the goods have been seized to make an application and to argue before a judge, after which the Crown would intervene and state its case.
I envision a small corner store where the owner is in violation with regard to the display of tobacco products. Instead of having one package, if that is what is allowed, he has 10 cartons. The inspector, quite rightly, on reasonable grounds, sees that violation. He goes into the store and seizes everything, in effect closing down the store.
I maintain that, as written, this law allows him to do that. That should not be allowed and I would hope you would agree that the bill should be amended to make it clear that it cannot be allowed.
Mr. Dingwall: I will ask Mr. McNaught to respond to the specifics.
Mr. Chris McNaught, Counsel, Legal Services, Health Canada: Having had the benefit of the minister's comments and Senator Lynch-Staunton's comments both on the first occasion and on the submissions before you, if I can borrow a springtime metaphor, I feel as though I am batting in the clean-up position. I will not be so arrogant to think that I will hit a home run at this point. I will make every effort to assist, if I can.
The concern of the senator is well placed with respect to what is happening to the small retailer. This must be examined in its proper context. Seizure, within the context of the department's enforcement policy, is not a whimsical, reflexive activity; it is something that will happen following earlier visits and warning letters.
You queried why a charge should not be laid. In other words, why does the matter not proceed to court? That would seem natural. That is an understandable query. However, again with reference to departmental policy, prosecution is a last resort. This type of regulatory mandate does not seek to lay charges as an end in itself. There will be many instances -- and perhaps I can give a couple of examples -- where the seizure is appropriate to carry out the regular administrative duties of the regulator, without putting the taxpayer and the particular taxpayer "regulatee" to the full force, majesty and cost of a prosecution.
In the future, for example, should the product regulation itself be in full force in terms of an adulterated product that is discovered, much like a food and drug situation, it would be appropriate to seize it. However, it may not, in the circumstances, be appropriate for them to proceed with a prosecution. It may, as you have rightly indicated, senator, be a small corner store. Why should a prosecution, necessarily, at the Attorney General's discretion, be visited on them just because of that? At the same time, there is a public policy purpose to be exercised in the health sphere by seizing that product, short of prosecution.
Where an inspector has visited the premises of a small operation on several occasions and seen offending signs, or seen an absence of the health warning signs as prescribed, something may be seized with respect to that. Again, a prosecution may not be necessary.
In that context, I wish to quote a couple of things for the record. The first quotation is from Professor Schabas who appeared before you on April 1. When referring to the search and seizure provisions, he commented:
They do not shock me. They seem to be provisions which compare with other types of provisions we find in this type of legislation and that have generally been allowed to survive. We allow electricity and meter readers to come into our houses as well to check for things. It is the kind of thing where that is allowed, and particularly because it is not...involved in prosecution....
Forgive me for using me a Latin phrase, but a fortiori, senator, if we allow people into our homes without warrant for electricity meter readings, why should a regulated commercial retailer who does business with respect to a potentially lethal product not expect to have visitation on a warrantless basis from an inspector with respect to what is really a hazardous product?
Senator Lynch-Staunton: I do not want to get into that argument because my smart answer would be that if we have not paid our bill, he is not allowed to seize the meter. Inspection is one thing. It is the seizure of goods that disturbs us. I think I have made the point.
Minister, I hope that, if this is not changed, one of the many small shops in your own riding, some of which I know well, is not one day closed down for not conforming with the law. The way this is worded, that can happen.
Mr. Dingwall: Madam Chair, I have every confidence that the small confectionery stores in my constituency will comply with the letter and spirit of the law. I have no doubt that there will never be a prosecution in the great constituency of Bras d'Or.
Senator Lewis: With regard to seizure under clause 39, Senator Lynch-Staunton referred to seizure of "any other thing on premises". If we read that clause more closely, we see that it states:
-- may seize any tobacco product or other thing by means of which...the inspector believes on reasonable grounds that this Act has been contravened.
They cannot seize everything in the store; it is only the thing which relates to the contravention of the act.
Senator Lynch-Staunton: It is still pretty vague.
Senator Nolin: Thank you, Mr. Minister, for coming back today. I have four minor concerns to raise. Of course, for those whom they affect, they are major concerns.
With regard to clause 8(1), we have heard many comments about the use of the word "fournir" in French and "furnish" in English. We have heard the concerns most often from retailers and tobacco growers.
They read the information letter which you issued in February in which you state that it is not the intent of the law to prosecute a worker who is a young person as defined by this law. However, they still want some assurances in that regard.
They have suggested a short amendment which would clarify the issue. Their amendment would add to the end of clause 8(1) the sentence: "Unless the young person is employed by the wholesaler or retailer and it is not intended for personal consumption."
To me, that seems reasonable. I want to check with you before we get into our clause-by-clause study tomorrow to see if you would agree with such an amendment.
My second point has to do with clause 12 which deals with dispensing devices. A group of concerned business people who handle vending machines feel that this may only be a drafting problem. Basically, vending machines will be allowed in bars if there is a remote control or some other mechanism which would permit someone in charge to check the ID of the person who wants to buy a package of cigarettes. For them, and I think it is reasonable, this seems somewhat inequitable. If grocery stores, convenience stores and pharmacies are allowed to sell cigarettes, why can a vending machine not be installed, with the proper remote control, in a restaurant? Installing and maintaining cigarette dispensing devices in restaurants accounts for almost 50 per cent of their business. The other 50 per cent of machines are installed in bars.
This group of business people has also proposed an amendment. I do not have the exact wording of the amendment that I will propose tomorrow. Before going through the process and trying to convince my colleagues, I would like to know whether you think it is reasonable. I believe it would be more equitable for those people and I do not think it would change the intent of the bill.
My third concern has to do with clause 29, which deals with the cash rebate. We have heard from retailers that, first, their margin of profit is very slim: 1 per cent. For many of them, tobacco accounts for almost 60 per cent -- and in some instances 80 per cent -- of their business. They explained to us that if they pay their bills from their distributors, wholesalers or manufacturers cash on delivery, there is an automatic cash rebate.
I will recommend to my colleagues tomorrow an amendment which will limit the application of clause 29 to consumers and not to any trade mechanism which already exists among manufacturers, retailers and distributors. I am sure your officials have heard the same concern.
Mr. Dingwall: Could you be a little more clear in terms of the specifics that you want?
Senator Nolin: I will propose that clause 29 would apply only to the consumer, not to any trading between a manufacturer and a retailer. They explained to us that their margin is very thin and that the rebate they are getting from the manufacturer is about 2.5 per cent.
Mr. Dingwall: Your amendment would address the manufacturer and the retailer, not the consumer?
Senator Nolin: We would limit section 29 only to the consumer, allowing for normal trade discounts. That is reasonable, but before I go through that tomorrow morning, I would like to hear your view on it.
Finally, I refer to clause 66, the coming-into-force section. The way the bill reads now, clause 66 refers only to the coming into force of clauses 24(2) and (3). Because the bill is silent for the coming into force of the bill as a whole, we go back to the coming-into-force rule which says that, as soon as this bill receives Royal Assent, it becomes the law of this land. The coming into force is immediate.
It seems there should be a transition period, as there was in Mr. Epp's bill. With regard to billboards on highways, we have heard from the outdoor advertising people that, in a matter of one minute, all those boards would become illegal. I know the regulations will not be in place at the minute the bill receives Royal Assent but, technically, those people are -- although I do not want to use the word -- criminals. Under the sections referring to offences and penalties, they are criminals.
I would introduce an amendment which would enable the Governor in Council to decide when the bill would come into force. The cabinet would have the power to decide, when everything is in place, to announce the coming into force of that bill. I am sure that, with all your capacity, you would check with all the stakeholders before making that bill law.
Those are my four minor points. Would you like to comment on them?
Mr. Dingwall: Honourable senators, I am a guest here. It is not for this guest to tell senators what can and cannot be passed.
Senator Nolin: I am just checking.
Senator Lynch-Staunton: We are looking for your support.
Mr. Dingwall: I am just a passer-by in this matter.
I may have to seek some clarification on your points. Regarding clause 29 in terms of the rebate, the prevailing numbers which have been distributed show that some retailers believe they could lose a fair sum of money. Of course, you must contrast that with the costs to our health care system, which are quite enormous -- $3.5 billion -- as opposed to the cost they referenced which was $60 million.
Senator, I think we meet your test. Clause 29 must be cross-referenced with clause 18(2)(c). The bill provides that Part IV on promotion does not apply to promotions which take place amongst growers, manufacturers, distributors or retailers as long as they do not directly or indirectly target consumers. I think we meet the test there.
On the issue of a transition period for billboard operators, we need to be clear here. The reality is that everyone in the industry knew about this. After the legislation of our colleague and friend Mr. Epp was found to be ultra vires, the government released, in November 1995, its blueprint to move forward with a comprehensive package as it relates to tobacco control. Everybody has known that. It is not a surprise. We have consulted widely across the country. The provisions and the directions of the bill were well known.
If you are suggesting that in regulations, as opposed to in the substance of the bill, we give due diligence to the statements you have made, I will undertake to do that. However, I see no need to amend the bill.
In clause 8, you focus your attention on the word "furnish." When this issue was first raised in the House of Commons, I made it clear that employees, young and not so young, would not have to worry about selling a particular product. No legal interest passes to an employee where, for example, he or she is acting on behalf of the retailer in accepting product delivery or returned merchandise. Any obligations would rest with the retailer itself rather than the employee.
The best example I could give is the Liquor Control Board in the province of Ontario. If that were to occur in a Liquor Control Board store, they would not be found liable either. The circular which we have issued addresses that.
Regarding the intent of the vending machine regulations, we must keep in mind that, in 1992, in excess of 62,000 cigarette vending machines existed in this country. The provinces and the federal government working together have been able to reduce the number of vending machines still vending by 57,000. There are roughly 4,200 vending machines still in existence. The intent of that clause was to have a face-to-face transaction, particularly where young people are apt to be.
In some jurisdictions in this country, minors are allowed in certain establishments that serve liquor. Of course, the minors cannot be served, but they would have access to the vending machines. That was the intent and the purpose of our efforts in clause 12 and its various subclauses.
Senator Nolin: With regard to vending machines, that "face-to-face" need would be met because the operator of the remote control makes that transaction. By the way, this remote control mechanism was okayed by your department. If in doubt about the age of the person who is asking for permission to access the vending machine, the person in charge of the remote control would ask for ID, just as would the person in charge of the convenience store, the pharmacy or any other retail outlet.
Many of those 4,000 dispensing devices are in Quebec. The people who came before us on this issue were all from Quebec. It is a legitimate business. They are supportive of your bill. They want the bill changed in a way that does not go against its intent. Of course, they agree with the face-to-face concept. That is why they promoted the idea of the remote control mechanism. I think it is reasonable. That is why I am suggesting that minor amendment, but I do not think we will get there.
With respect to sponsorship, we can agree to disagree. We have heard witnesses referring to all kinds of documents, studies, research, opinions and clippings. Finally, last Monday, we heard from a psychologist, Dr. Smith. As an expert, he said he would rely for his opinion only on peer review documentation and literature. He offered to present a bibliography to this committee, and we will receive that on Monday. I will wait to look at the bibliography he presents.
I will not present any amendments to this committee tomorrow with regard to sponsorship. However, if I see fit, I will propose an amendment in the Senate on third reading of the bill, probably along the lines of the amendment proposed by the Alliance for Sponsorship Freedom. You have probably read that amendment. I think it is fair. They are imposing many restrictions upon themselves.
Mr. Dingwall: Senator, perhaps you could remind us of the substance of the alliance proposals.
Senator Nolin: Yes, I have it here. Do we have copies of this brief?
The Chair: If we do, it will take a moment to get them.
Senator Nolin: It is a long amendment. It refers to clause 24, of course. I will read to you from their proposed amendment:
(2) Authorized sponsorship promotions are governed by the following restrictions:
(a) the depiction of the tobacco product or a tobacco package is prohibited;
(b) tobacco-related brand elements cannot be displayed on greater than 10 % of the display surface of sponsorship promotion nor appear in a size larger than the name of the event;
(c) sponsorship promotions cannot be placed in any publication or broadcast having an adult readership or audience of less than 85%;
(d) sponsorship promotions cannot be placed within 200 metres of any primary or secondary school property;
(e) no sponsorship promotion can be produced depicting a professional model under 25 years of age;
(f) outdoor promotional material for a sponsorship promotion can only be displayed for 3 months prior to the commencement of the event and one month subsequent to the close you are of the event.
You will have a copy of that.
The Chair: I am sorry, we do not have it here.
Senator Nolin: You can photocopy my copy.
If I compare that with what is in the bill, I think it is fair. I am not even asking for hard evidence. No expert told us that there was a link between sponsorship and starting to smoke. Do you have any comments in that regard?
Mr. Dingwall: You, being a consummately reasonable person, will recognize that those of us who have looked at this issue in all of its contexts have taken direction and guidance from the Supreme Court of Canada. I did not say this. The Supreme Court of Canada said, based on a measure of common sense, that promotion, sponsorship and advertising form a linkage in terms of consumption.
Senator Nolin: Mr. Minister, there was no sponsorship ban in the former act.
Mr. Dingwall: Let me continue, if I may.
Senator Lynch-Staunton: The sponsorship part was not challenged before the courts.
Mr. Dingwall: We have heard these arguments from the alliance on previous occasions. We have examined them, and looking at the four major elements of marketing strategies, whether they be by Nike or by Coca-Cola, we have moved on those. We have moved on the price. Perhaps we have not moved substantially enough on the price, but the price is where it is today based on the best evidence and intelligence that we have from the RCMP, because we did not want to trigger another round of smuggling.
We looked at the place and made some restrictions there. We looked at the whole issue of promotions and made some restrictions there.
Senator, there is no doubt in my mind, although there may be doubt in the minds of others, that this advertising was placed next to schools under the auspices of the voluntarily code of the tobacco industry. They broke their own code. They placed advertising substantially less than 200 metres or 200 feet from a school. Most reasonable people would not think that this ad appeals to seniors. I think we know to whom that ad appeals; it appeals to young people. Likewise, you cannot tell me that this ad appeals to seniors.
Senator Gigantès: Would you let us have a closer look?
Mr. Dingwall: Senator, you have just proven my point. Young people have the same kind of reaction. Young people want to look like that, and it is cool.
Senator Lynch-Staunton: Do you think young people will take up smoking as a result of looking at those ads?
Mr. Dingwall: Look at that. Does that appeal to senior citizens, too?
Senator Lynch-Staunton: Do they take up smoking?
Mr. Dingwall: I suggest that it does not appeal to senior citizens. This direct advertising is issued to make it attractive and appealing to young people. All young people at the formative ages of 14, 15 and 16 want to be older. They think they are immune, and they want to look like that.
To answer your specific question, senator, about whether it affects people, I think it does affect people.
Senator Lynch-Staunton: Will seeing an ad like that, or seeing the ad of a tobacco sponsor, incite someone to take up smoking?
Mr. Dingwall: As I said in my remarks, I do not think that one event, one ad or one particular advertisement will trigger the decision for a young person to commence smoking. It is the cumulative effect. An environment has been created in which it is cool and acceptable: "I am 14 years of age; I am a young female; I am immune from any health-related risk." This is the way young people think. When you talk to young people, this is what they will tell you.
I was in Ontario on the weekend and heard two young ladies aged 14 and 15, one a swimmer and the other a basketball player, say it very clearly. The environment, from the billboards, the promotional material and all of the accessories that go with it, make it attractive for young people to smoke, and they wish to duplicate that. Senator, there is no one event and no one ad, but there is a cumulative effect of all those ads.
Senator Beaudoin: On the question of promotion, you have distributed some displays. I should like to verify something with you. Is the 10 per cent found in clause 24.(2)? In other words, is it found in the bill and not in the regulations? I prefer it in the bill anyway, but is that the case?
Mr. McNaught: That is a perfect example of how the act conveys its substance without having to rely on the regulation. With its current ads, it is already evident that the industry understands what 90 per cent and 10 per cent means.
Senator Beaudoin: That case is clear cut. In the case of Villeneuve and the question of the logo, is the word "logo" defined in the bill, or is it not a problem in practice?
Mr. Dingwall: It is not a problem in practice.
Senator Beaudoin: If it is not a problem, that is all right.
Clause 3 states:
This Act is binding on Her Majesty in right of Canada or a province.
I have no problem with that. However, unless I am mistaken, I do not see in the act any obligation on the part of the Crown, in right of Canada, to do something in the field of education for young people. I know that education is provincial and it is very important.
Mr. Dingwall: If you are recommending that the federal government assume new responsibilities for education, I will take that up.
Senator Beaudoin: No. That is why I stated that. However, in that field in particular, nothing would preclude the common right of Canada or the Government of Canada from doing something by the creation of a fund or by some indication in the field of education for the public. I am not referring here, of course, to the universities, the CEGEPs, and so on. Generally speaking, nothing would preclude the Government of Canada because we have a spending power in the Constitution to do that. There is no obligation to do it, but that does not mean that the government cannot do it. I would like the government to be under a certain obligation to do it. Was this left out on purpose?
Mr. Dingwall: No, it was not left out on purpose. The comprehensive package that we took forward in terms of legislative goals is clear. We also announced moneys to be set aside for the purposes of getting information to young people across the country concerning the health hazards of tobacco consumption.
In terms of our studies and our investigations, we found that the traditional methods used for the school system or pronouncements made by those in positions of responsibility are not overly effective. What is more effective is to involve young people with other young people. The peer group pressure on young people is a major determining factor in their decision to begin smoking.
The Government of Canada has spent large amounts of money working with various groups across the country to disseminate this information and allow them to do the selling that is needed to convince young people. Let me give you one example.
I attended a session on Sunday of a group of grade 6 students who will make their own video on the hazards of smoking. In many instances, the things they refer to about the hazards of smoking are not those which adults would point out. They say, "It burns my eyes. It stinks. It makes your hands and your teeth yellow." That kind of information from young people can be communicated more effectively than information from any adult or authority. That is how we intend to work with those groups across the country. Requests have been extensive to facilitate that educational process.
Senator Beaudoin: The purpose of my question was to put the emphasis on something positive: namely, education. It is one thing to legislate, but we must do more if we want to have young people on our side.
Senator Jessiman: The regulations that you promulgated so far are just being proposed; is that correct? In other words, they are not the regulations. After the bill has been passed, you will then pass regulations pursuant to the act that is passed?
Mr. Dingwall: If I understand you correctly, yes, we have been consulting with various stakeholders on developing the regulations and will continue to do so. There is the process involving The Canada Gazette which must take place after that, so there will be more consultations. There is a pre-clearance mechanism within the provisions of the bill to assist various groups and the regulations will be examined by a standing committee of the House of Commons.
Senator Jessiman: You may have answered my question, but I am not sure that I understood it.
What you have promulgated so far are called proposed regulations.
The Chair: I think the term "promulgated" is an inappropriate term.
Senator Jessiman: That is what I read.
The Chair: I do not think so. He has either distributed or published regulations, but they have not been promulgated.
Senator Jessiman: All right, they are proposed regulations.
Mr. Dingwall: In a spirit of cooperation with various stakeholders, we have forwarded to them in advance the kinds of regulations that we are examining. It is helpful to them and to us that we have that kind of dialogue.
Senator Jessiman: I agree. After this act becomes law -- that is, after the bill is passed -- you will promulgate regulations; is that correct?
Mr. Dingwall: After we go through the normal processes, yes.
Senator Lynch-Staunton: It must then go to the House of Commons.
Senator Jessiman: Yes. Is that correct?
Mr. Dingwall: Yes.
Senator Nolin: Not Parliament; just the House of Commons.
Senator Gigantès: Senator Lynch-Staunton does not want it in the Senate.
The Chair: That is not what Senator Lynch-Staunton said. Let us not deal with that here. Senator Jessiman has a question.
Senator Jessiman: You said that your department has looked at the RJR-Macdonald v. the Attorney General of Canada case, which goes on for approximately 100 pages. In the majority decision of the Supreme Court, Madam Justice McLachlin stated that it is hard to imagine how the presence of a tobacco logo on a cigarette lighter, for example, would increase consumption, yet such use is banned. She found that section 8 of the act fails the rational connection test.
You say that the Jacques Villeneuve ad is all right. Would you have to have the 10 per cent below that product? Is that picture by itself all right if the name of the company is above it, or must it be shown below?
Mr. Dingwall: No.
Senator Jessiman: You are removing the logo even though Justice McLachlin thought that as far as cigarette lighters are concerned, the logo would be okay.
Mr. McNaught: There is quite a distinction between an accessory and what we have here in terms of promotions. In point of fact, our law abides by what Justice McLachlin said. In point of law, you can have the logo on the lighter.
[Translation]
Senator Lavoie-Roux: My comments are somewhat similar to those made by Senator Beaudoin. This bill is chiefly prohibitive in nature, in order to achieve certain objectives which I share.
[English]
I share your objectives and, on the whole, I am in accord with the bill. I congratulate you for having put forward such a clear summary of it. However, I think a clause concerning education should have been added. Let us talk about teenagers. This is a bill which prohibits everything.
[Translation]
Senator Lavoie-Roux: There's no mention at all of education. I have no amendment to propose. In subclause 60(7)...
[English]
It may not be too late to introduce into clause 60, which speaks about agreements, that the agreements could also be with the provinces in relation to educational measures touching on non-smokers, or whatever you want to call it.
You know as well as I that teenagers want to smoke in order to prove that they are smarter than their parents or whoever else is around them. If you really want this to appear as not only a prohibition for them, you might want to include the perception that a sense of responsibility is important. I know you are planning information programs and so on, but if it were more clearly articulated, the bill would not appear to be so negative. It would seem that positive things are being done to help them and to accept that control that is put on them.
Mr. Dingwall: You are correct, senator. There is much more to this measure than just prohibition. If we think for one moment that by mere prohibitions we can achieve our objectives, we are sadly mistaken.
On the other side of the ledger, we are working with provincial governments on different agreements, including in the area of enforcement of legislation. A number of provinces do the actual enforcement in some areas.
In the area of education, we try to work with the provincial governments and non-governmental institutions, including the Canadian Cancer Society and national and provincial youth groups. That is where we think the money is best spent in terms of both prohibition and education.
Our first priority is to change the present environment which is so pervasive with tobacco advertising and promotion. We must gear that down in order for education to be more effective.
Senator Lavoie-Roux: I have no objection to what you are doing in terms of changing the environment, et cetera. The bill would have a more positive tone if you would have added:
[Translation]
... a reference to education and cooperation with the provinces in this area.
[English]
It would have given the bill a more positive appearance.
Senator Doyle: Minister, I might say that I find the bill too tentative and too anxious to avoid prohibitions. I would have been far more forthright. However, I did look at the advertisements which you circulated. I was struck by one which offered a cross-hatch of a cigarette and told me what was right with that cigarette. On the reverse side of it, it said that this, with slight modifications, might be permitted. It tells me that this cigarette has full flavour and less irritation. It has dispersion qualities. I have never heard of a dispersion quality. It provides, again, reduced irritation. Reduced from what? Less irritation than what? It is based on research with smokers. Which smokers? Me, for instance?
I do not find that this pseudo-scientific presentation is something at which we should laugh. I think the teenager who tries to persuade his mother that he has found a nice safe cigarette with dispersion qualities might find a good argument on the second trip round and might even find it more persuasive than looking at hockey stars. Do you not think that that type of this-is-good-for-you ad should be totally run out of the business?
Mr. Dingwall: Now you are starting to hit home, senator. Yes, the substance, in our view, is a very lethal one. There is certainly good evidence, which has been adduced here at your committee on several other occasions, in terms of the effects.
Unfortunately, senator, I must deal with the decision of the Supreme Court of Canada. That court has told me, our government and Parliament, that, within reason, you have to allow the manufacturers of the product the opportunity to present their product to the Canadian people.
If we knew years ago what we know today about tobacco consumption, I am certain that it would not be a legal product. However, we must live, as you know, sir, in the real world, in which a large number of our citizens are addicted to tobacco consumption. We did not believe the answer would be a Draconian law which would breach the Supreme Court of Canada.
I fully appreciate the intent of your remarks in terms of just how bad some of this stuff is. It is equally bad for young people when stars in various vocations are supporting the habit of tobacco consumption. That ad is just further inducement to that statement.
Senator Doyle: I still find it very difficult to believe that the Supreme Court of Canada would stand behind dispersion qualities as a reason for smoking.
Senator Haidasz: Mr. Minister, I wish to thank you for appearing before the committee this afternoon.
This is one of the most comprehensive bills I have seen in my 40 years in Parliament. There are thousands of people like myself who are frustrated that too much time and effort has been spent on targeting advertising and the sports events that are being sponsored by companies.
Science has advanced a great deal since Dr. Norman Delarue, my surgery professor at the University of Toronto, came to the conclusion in 1947, after performing hundreds of thoracic operations, that cigarettes are causing those cancers. The high levels of nicotine and tar are the reason that 45,000 people each year die prematurely from smoking cigarettes. That is the cause of the $3 billion in direct health costs.
Health economists, including one from your department now working in Geneva for the World Health Organization, have estimated that the total indirect cost in the 1980s to the Canadian economy was approximately $22 billion. In addition to this enormous financial cost, the human cost of 45,000 premature deaths annually and the hundreds of thousands of tobacco-related clinical diseases should be targeted, Mr. Minister.
I know you are prepared for that with the regulations but in your remarks to us this afternoon you said that you would be prepared to regulate tobacco products as our knowledge of science and consumer behaviour evolves in the months and years ahead. We have known for 50 years that it is the high levels of nicotine and tar in cigarettes that cause these diseases. Why must we wait so long for specific regulations forcing manufacturers to produce cigarettes that are below the levels at which addiction begins due to nicotine, and below the levels at which tars begin to cause the cancers and diseases?
Mr. Dingwall: Senator, you have been a long-time proponent of better and more effective legislation as it relates to tobacco in this country. I want to thank you for your efforts. I hope that we have used effectively much of the content of your private member's bill and the other information you provided as we drafted this legislation.
You are correct, senator, that there is good science today. This is where it has brought us today. We hope to become more knowledgeable with the advent of studies from all across the world.
You have made reference to the World Health Organization, which passed a resolution last year. Many of the 193 countries in attendance are now doing their own investigations and scientific assessments to which we will have access. With that new information, policy makers will be in a better position to revisit this proposed law or to make new laws applying to the terrible diseases caused by tobacco consumption.
I thank you for your work on the tobacco issue. It has been very helpful to our department.
The Chair: Thank you, Mr. Minister.
The committee adjourned.