Two of Canada's biggest tobacco companies will pay record-setting fines after pleading guilty to tax charges laid in connection with contraband cigarettes.
Imperial Tobacco Canada Limited and Rothmans Benson and Hedges pleaded guilty to "aiding persons to sell and be in possession of tobacco manufactured in Canada that was not packed and was not stamped in conformity with the Excise Act."
Imperial Tobacco will pay $200 million in fines and Benson and Hedges was fined $100 million.
"Based on our estimates, by (the companies) paying these fines, they will not be making any profits out of the (illicit) activities they had in the past," Revenue Minister Gordon O'Connor said at a press conference held in Ottawa on Thursday.
The companies have also committed to help combat contraband tobacco activities in Canada.
"The result we've seen today brings to a close a significant chapter in contraband tobacco history," RCMP Assistant Commissioner Mike Cabana said in a press release.
"The message sent today is that no company is above the law."
Imperial Tobacco said they understood the implication of their guilty plea.
"We realize we are going to take a hit to our reputation because of this," Catherine Doyle of Imperial Tobacco Canada said. "We acknowledge we violated this section of the excise act."
The RCMP said Thursday's guilty pleas were the culmination of an eight-year investigation by RCMP Customs and Excise officers in Ontario and Quebec.
The charges were laid in connection with illegal tobacco shipments to locations in the U.S. between 1989 and 1994. The contraband cigarettes were distributed by smugglers or black market distributors in Canada and the U.S.
O'Connor said that in addition to the criminal fines, the two companies will also pay hundreds of millions of dollars in civil fines.
"Imperial is paying $600 million and Benson and Hedges is paying $550 million -- when you add up the criminal and civil fines," he said.
No company official was charged in connection with the investigation.
But an anti-smoking group says Thursday's fines have not fully served justice because no tobacco company executive will see jail time.
"There's no winners in this because the industry has addicted a whole bunch of young people who then became lifetime annuities for these companies," said Garfield Mahood, a spokesperson for the Non-Smokers Rights Association.
"Over time the companies will financially benefit. And literally thousands of people will die in the future as a result of this crime."
O'Connor said Thursday's plea deal had the approval of Canada's premiers. Money from the fines will go into both provincial and federal coffers.
