Court hearings for $32.5B tobacco settlement begin this week in Toronto. Here’s what you need to know.

Court hearings for the proposed $32.5 billion tobacco settlement begins on Jan. 29. THE CANADIAN PRESS/Sean Kilpatrick

Nearly three decades after lawsuits were first filed, the fight against Canada’s biggest tobacco companies continues — and is facing a critical test this week.

Starting today, a series of hearings at the Ontario Superior Court in Toronto will determine whether a judge approves the proposed $32.5 billion settlement which was first announced in October.

The case has major public health and financial stakes. Tobacco remains the leading preventable cause of disease and death in Canada, killing more than 46,000 people each year, according to the Canadian Cancer Society (CCS).

“This cannot be a missed opportunity,” said Rob Cunningham, a senior policy analyst at CCS. He warns that without changes, the settlement risks being too favorable to tobacco companies and failing to implement stronger public health protections.

As court proceedings get underway, here’s a breakdown of the key issues at play:

Who is involved?

The settlement includes companies JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd.

The creditors, who are set to receive payments from the settlement, include representatives from provincial and territorial governments, Quebec class action plaintiffs, and other individual victims across Canada.

Where can I watch the proceedings?

The hearings could take as long as nine days, if necessary: Jan. 29-31, Feb. 3-5, and Feb. 11-13.

You can tune into the first day of proceedings here via YouTube.

What role does the Canadian Cancer society play?

The CCS has been granted status as a “social stakeholder” in the case, meaning they represent broader public health concerns.

They are asking for the current settlement to be revised to include a restricted tobacco promotion, the release of 8 million internal company documents, an expansion of the mandate of the foundation to fund programs, and provisions to ensure the industry is not shielded from future liability.

Cunningham argues that while the proposed financial payouts are significant, they do not include necessary safeguards to prevent further harm.

“The provinces collectively are seeking more than $500 billion in damages,” he said. “The companies together are going to pay $24.7 billion over 20 years… It should not be business as usual for tobacco companies.”

What is proposed in the settlement?

Of the $32.5 billion, $24.7 billion would go to the provinces and territories, another $4.1 billion would go to plaintiffs that were part of two class action lawsuits in Quebec and $2.5 billion to smokers across Canada. The remaining $1 billion would go towards the creation of a foundation.

The proposed settlement was approved at a meeting of creditors in December of 2024, but court approval is still required.

How do I know if I’m eligible for compensation?

As of now, according to Tobacco Claims Canada, money could be granted to people in Canada who suffer from certain tobacco-related diseases outlined in the Pan-Canadian Claimants’ Compensation Plan, also called the “PCC Compensation Plan.”

If approved by the court, eligibility would require that the claimant lived in a Canadian province or territory and was alive on March 8, 2019.

They must have smoked at least 87,600 cigarettes, equivalent to “twelve pack-years” between Jan. 1, 1950, and Nov. 20, 1998. Additionally, they must have been diagnosed with lung cancer, throat cancer, or severe emphysema/COPD (GOLD Grade III or IV) between March 8, 2015, and March 8, 2019, while residing in a Canadian province or territory.

The plan also says that if a smoker or former smoker met these eligibility criteria but has since passed away, their estate may still be entitled to compensation.

Why are some tobacco companies opposing the settlement?

Imperial Tobacco Canada Ltd. has expressed support for the proposed deal.

In an email to CP24/CTV Toronto, they said they believe the current plan will not only “maximize value for the claimants” but also “enable” their continued operations in Canada.

“While there have been some objections and issues raised by other parties, we remain hopeful that this comprehensive settlement will be sanctioned and we look forward to bringing this process to a successful conclusion soon,” said Natacha Bénard, a spokesperson for Imperial Tobacco Canada Limited.

However, Rothmans, Benson & Hedges Inc. and JTI-Macdonald Corp. have filed objections, arguing that the financial burden is unfairly distributed among the companies.

CTV News reached out to both companies for comment but did not receive a response as of publication.

“The companies are fighting amongst themselves before the court as to how much each of them should pay compared to the other,” Cunningham said. “Each of them in the settlement is currently getting an incredible deal.”

What are the key public health concerns?

Public health advocates argue that the settlement, as it stands, does not go far enough to curb tobacco use in Canada.

“We have an enormous amount of work to be done,” Cunningham said. “That’s why this settlement needs to be as effective as possible from a public health perspective. And that’s not the case at present.”

CCS believes the deal must be amended to include stricter industry regulations, document transparency, and funding for anti-smoking initiatives.

How does this compare to the U.S. tobacco settlement?

A past example of this case in the United States resulted in settlements of US $245.5 billion and the public disclosure of more than 40 million pages, new marketing restrictions and the establishment of an independent foundation to reduce, according to the Canadian Cancer Society.

“In the Canadian settlement, there’s none of that,” Cunningham said. “We have a one-time historic opportunity to better control the tobacco industry and reduce tobacco use… We need to modify this settlement before it’s approved.”

What are the possible outcomes?

The Ontario Superior Court, led by Chief Justice Geoffrey Morawetz, will weigh arguments over the coming weeks before deciding whether to approve, reject, or modify the settlement.

If the settlement is approved, tobacco companies would begin payments under the current terms.

But if the settlement is rejected, then that could force negotiations to restart all over again a process that recently concluded after five years of deliberations.

The settlement could also be modified by the court to fit some of CCS’s proposed changes.