Tobacco Firms to Pay $23.6bn in Proposed Canada Settlement

Three of the world’s largest tobacco companies—Philip Morris, British American Tobacco, and Japan Tobacco—are nearing a landmark agreement to resolve long-standing litigation in Canada. The settlement proposes that the firms collectively pay C$32.5 billion ($23.6 billion) to compensate smokers and health departments across the country.

The deal follows a 2015 Quebec court ruling, which found that these companies were aware of the health risks associated with smoking but failed to adequately inform consumers. As a result, the companies placed their Canadian operations in bankruptcy, leading to years of legal battles and negotiations.

If approved, the settlement will allocate C$6.5 billion directly to smokers and their heirs, who have been affected by illnesses such as lung and throat cancer. The remaining C$24 billion will be directed to government health departments to cover smoking-related healthcare costs.

Claimants could receive up to C$100,000 each, with Quebec victims, who initiated the lawsuits, receiving a significant portion of the compensation.

Although the settlement is expected to be approved by most claimants, some public health advocacy groups have expressed concerns that it does not include provisions to prevent future harm or limit tobacco companies’ influence, especially regarding newer nicotine products.

Voting on the plan is set for December 2024, with a final hearing expected in the first half of 2025. If successful, this will mark the first global litigation against the tobacco industry resulting in direct compensation for victims.