Lessons from the 'Carbon Tax' for Tobacco Control.

Last week the Supreme Court of Canada upheld the federal Greenhouse Gas Pollution Pricing Act. Once again the courts have given the federal government the green light to impose regulatory charges as part of their actions to fullfill their responsibilities to Canadian citizens.

This post reviews the potential use of regulatory charges to address another problem caused by combustion -- cigarettes. (A downloadable briefing note provides additional information.)

Regulatory charges are not taxes

Although it is commonly referred to as a "carbon tax", the charge on fossil fuels that is applied by the federal government in some provinces is, legally speaking, a "regulatory charge."

A regulatory charge is different than a tax. Taxes can only be imposed and set by legislatures, but can be spent by governments without any specific conditions. Governments can adjust the rate of regulatory charges without getting legislative authority, but they are limited in how they can spend the money.

Federal 'regulatory charges' are used to meet important public goals

Canada's federal government uses regulatory charges to help it achieve a wide range of objectives. These charges are used to address global warming (as already noted), to support cultural industries, to pay for its cannabis-related activities, to help clean up the environment after spillage from ships and for other goals. In most cases, the regulatory charge is determined by, collected by and used by the government department that is responsible for the issue being managed, the regulatory scheme.

Tobacco taxes help reduce smoking by making smoking more expensive, but they don't fund tobacco control

Although federal and provincial governments have not yet applied regulatory charges to tobacco manufacturers, they do collect large revenues from tobacco taxes. In 2019-2020, smokers paid $7.6 billion in specific excise taxes on tobacco products (the amount would be higher if GST/PST/HST were considered). This is roughly equivalent to the health-care costs associated with tobacco use (estimated by the Canadian Centre for Substance Abuse at $6.1 billion for 2017.)

Taxes collected from smokers roughly offset treatment costs, but there is currently no formal or informal link made by these governments between the revenues from tobacco use and the expenditure on activities to reduce smoking or to treat the diseases caused by it. Income taxes paid by tobacco companies are similarly not linked to any specific public purpose.

In the last fiscal year (2019-2020) for example, the federal government received $3 billion in revenues from tobacco taxes. During the same period, it spent $61 million on tobacco control activities, of which about three-quarters was allocated to Health Canada. For every dollar smokers provided in tobacco taxes, the federal government invested 2 cents in programs to help smokers quit, prevent young people from vaping or smoking, monitor the tobacco industry or control contraband.

Regulatory charges can help provide transparency, accountability and sustainable funding

A regulatory charge on tobacco suppliers would assign the costs of tobacco control on the industry, making these companies accountable costs to the public that are directly related to their business operations. Regulatory charges also impose greater accountability on governments, as the amount collected must be linked to the 'regulatory scheme'.

Regulatory charges on tobacco companies have been tried and tested. 

Many governments around the world have established mechanisms to tax the problem of tobacco to pay for health programs. 

In recent years, the United States and France have imposed large regulatory charges on the industry, in keeping with their own legal systems for revenue collection. The US Food and Drug Administration collects US$712 million in user fees from tobacco companies, and France imposes a social contribution of 5.6% on the gross revenues of tobacco wholesale distributors, which provides about 130 million euros per year. 

Other countries have created dedicated funds for tobacco control or other health objecives using tobacco-sourced revenues, including additional high income countries (Korea, Switzerland) and developing countries (Thailand, Vietnam).

A regulatory charge can improve on past attempts to apply the polluter-pay principle to tobacco in Canada.

Although there are currently few dedicated revenues for tobacco in Canada, there have been several attempts to make tobacco companies foot the bill. 

The Tobacco Manufacturers' Surtax: For more than two decades, the federal government imposed a surtax on tobacco profit. In 1994, as part of a decision to reduce excise taxes to address smuggling, the federal government required the companies to pay 40% more in income taxes than other corporations. When he announced this measure, Prime Minister Chrétien linked the additional revenue ($200 million) to increased funding for tobacco control. "The money generated by this surtax will fund the largest anti-smoking campaign this country has ever seen."

The surtax was later made permanent and increased to 50%. Four years ago the tax was quietly rescinded after the companies had developed ways to avoid payment.

B.C.'s Tobacco Fee Act: In 1998, the British Columbia passed the a law to license tobacco manufacturers and make them pay for the province's tobacco control budget. The law also included measures to prevent the companies from passing the cost on to consumers (the goal was to make the companies and shareholders bear the burden, not to increase taxes on smokers). The companies objected, threatening to challenge it in court. The legislation was never proclaimed or put into force, and in 2002 it was repealed.

The Tobacco Industry Responsibility Act: In 1999, Senator Colin Kenny introduced legislation to impose a $0.50 per carton levy on cigarettes to fund a $120 Canadian Anti-Smoking Youth Foundation. The bill was approved by the Senage, but was never debated in the House of Commons because it was ruled out of order by the Speaker, who said it exceeded the authority of the Senate with respect to financial issues.

Regulatory fees on tobacco companies are a priority for health charities.

Earlier this year, the House of Commons Finance Committee included in its recommendations a call for an annual cost recovery fee on the tobacco industry. This reflected the advice that had been given the committee from the Canadian Cancer Society, the Canadian Lung Association, Heart and Stroke and others.

Regulatory fees can be set by all levels of government.

License fees for tobacco retailers are an example of regulatory charges that are currently in place in many Canadian municipalities. Revenue from these fees can be used to help pay for tobacco control activities (like cessation counselling or prevention messaging), although Lloydminster is the only Canadian city to have taken this approach to date. (A review of related municipal powers, focused on Ontario, is available here.)

Municipalities in Canada do not yet impose charges on suppliers to pay for the costs of cleaning up tobacco litter, although this is done in at least one U.S. city. 

An idea whose time has come?

The next federal budget will be presented on April 19. Hopes are pinned for a tobacco tax increase AND a new regulatory charge on tobacco suppliers.

Insolvency court forces Canada's tobacco companies to reveal financial information.

Next week Justice McEwan of Ontario's Superior Court will be asked for the sixth time to extend the insolvency protection orders under which Canada's 3 main tobacco companies are maintaining "business as usual" while trying to negotiate an end to the lawsuits filed against them. 

In most respects, there appear to be no new developments in this story. For the past 24 months lawyers representing Quebec smokers (who have won a $14 billion award against the companies) and lawyers representing the ten Canadian provinces (whose claims for $500 billion have yet to be heard in court) have been told to stand down their legal actions.  (Background on these lawsuits can be found here)

The last day of the current 'stay' period expires on March 31st, and it looks like the companies' request for an extension to September 30, 2021 is not being opposed.

Secrets and non-secrets

As long as the companies are protected by these orders made under the authority of the Companies Creditors' Arrangement Act (CCAA), the resolution of the governments' lawsuits against tobacco companies will be developed in closed-door negotiations. Very little information has been made public about the discussions being mediated by former Justice Warren Winkler. 

In contrast to this secretiveness, the CCAA process is providing transparency where usually there is none. One requirement of this system is that accounting firms are recruited to provide regular updates to the court on the financial situation of the insolvent companies. With the documents filed this week by Imperial Tobacco Canada (ITC), Rothmans, Benson and Hedges (RBH) and JTI-Macdonald  (JTIM) we now have around 24 months of financial reports for each of the companies. In the decades since these companies became wholly-owned subsidiaries of global firms, such information has generally not been available.

Another unusual aspect to the insolvency protection is that while the companies are able to continue "business as usual", they are restricted in how they can use any of their operating profits. In this case, for example, they cannot send dividends or other payments to their multinational owners. The money is notionally set aside for distribution to their creditors -- the people who are suing them.

The financial pictures provided in the monitors reports (links provided below) are presented somewhat differently than the financial statements typically seen in annual reports, and each company has chosen to provide different levels of details. JTI-Macdonald was the only one to identify its promotional expenditures, for example, only two of the companies revealed how much they paid for the main ingredient in their products (tobacco), and one company combined excise and income taxes in its report. The information tabled in these reports reflects cash flows, and is not adjusted for deferred revenues or accounts payable, as year-end statements usually are.  

The table below summarizes the data for the two-year period spanning mid-March 2019 to mid-March 2021. 

The bottom lines

The only money transfers are from smokers. The CCAA process has prevented smokers from receiving compensation from tobacco companies, but it has not stopped tobacco companies or the governments suing them from receiving money from smokers. 

Even in insolvency, tobacco companies are enormously profitable. During this period the annual combined net (after tax) cash retained by the companies is about $1.7 billion dollars. This is about one-half of the $3.3 billion they collectively received through sales and other activities (after excise, sales and income taxes are discounted). If these are final numbers, this will give them net profit margin of about 50%. 

These high earnings are still not enough to satisfy claims. At the beginning of the CCAA process, the companies declared that they had $2.5 billion between them as cash available to pay their creditors. Two years later, that amount has grown to $5.8 billion. This is only 1% of the amount that is being claimed against them.

Governments don't need lawsuits to get money from smokers. During this period, Canadian smokers contributed more than $6 billion per year in tax revenues to governments through the companies. (This will include taxes received by the federal government, which is not involved in the lawsuits). Smokers remain the only source of revenue for any compensation paid by the companies in settling these lawsuits.

The middle lines

The cheapest component of cigarettes appears to be tobacco. Two of the companies, RBH and JTIM, provided information on how much they spent on the main ingredient in their products, tobacco: 4% and 2% of their operating costs respectively.

Even in a dark market, promotions are a major cost. Only one of the companies, JTIM, provided expenditures on advertising and promotion. In the two-year period it spent $225 million on promotions, or 35% of its operating costs (8% of its total costs, once its unusually high payments for trademark rights are included).  JTI is the only company which does not have a direct contracting system with retailers, so the incentive payments it makes to retailers are not integrated with its billings, as they are for other companies. 

Tobacco companies pay well. RBH spent $104 million per year on salaries for its 850 employees and contractors -- an average pay and benefit package worth  $120,000. The average for JTI's 500 employees was even higher - $146,500.

To put it into perspective ...

* The amount spent on tobacco products in Canada ($9 billion per year) is enough to pay for 20 Space Agencies or 4 Departments of the Environment.

* Canada's 4.7 million smokers each contributed about $2,000 per year to the tobacco market. About $340 of that was used to manufacture and distribute the cigarettes; governments received about $1,300 in taxes and tobacco companies cleared the remaining $360.

* For every $1 in post-tax revenue, tobacco companies in Canada cleared 51 cents after costs. 

* During these two years, the companies spent more on "restructuring" costs to keep their companies alive than Health Canada spent on activities aimed at preventing deaths from tobacco. ($74 million vs. $68 million)

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Monitor's reports with financial information:

 Imperial Tobacco

Monitor's Ninth Report March 19, 2021
Monitor's Eighth Report September 22, 2020
Monitor's Seventh Report February 13, 2020
Monitor's Fifth Report September 25, 2019
Monitor's Fourth Report June 24, 2019
Monitor's Second Report April 24, 2019
Monitor's First Report April 3, 2019

Rothmans, Benson & Hedges

Seventh Report of the Monitor - 19 Mar 2021
Sixth Report of the Monitor -  21 Sep 2020 
Fifth Report of the Monitor - 13 Feb 2020 
Third Report of the RBH Monitor - 25 Sep 2019
Second Report of the Monitor - 24 Jun 2019 

JTI-Macdonald

Ninth Report of the Monitor - March 22, 2021.pdf
Eighth Report of the Monitor - September 18, 2020.pdf
Seventh Report of the Monitor - February 13, 2020.pdf
Fifth Report of the Monitor - September 25, 2019.pdf

Fourth Report of the Monitor - June 21, 2019.pdf

New survey results show a flattening of youth vaping rates

Today, Statistics Canada released the results of its second annual survey on tobacco and vaping. The Canadian Tobacco and Nicotine Survey (CTNS) was first conducted in the fall of 2019, and was repeated in December 2020-January 2021.

The good news

The rate of youth vaping does not appear to be increasing. In the year between survey waves, roughly the same number of teenagers (age 15-19) and young adults (age 20 to 24) had vaped in the past 30 days. 

With the small sample size of this survey, it may not be possible to say that the slight year-over-year decrease (from 15% to 13%-14%) reaches statistical significance, but we can say with confidence that the number has not grown.

The rates of cigarette use continue to fall, with a statistically significant drop in cigarette smoking in all age groups. (Important to note that the CTNS is part of a family of smoking surveys that produce lower estimates of smoking than Statistics Canada's larger Canadian Community Health Survey). 

A lot happened in the 12 months between survey waves: not only were provincial and federal restrictions on vaping marketing put in place, but the social world of young people was disrupted by the COVID pandemic restrictions. For whatever reason, this curve appears to be flattening. 

The bad news

The rate of nicotine use continues to be high. This survey confirms that one in seven teenager and young adults (14% and 13% respectively) is vaping, and that one-third of high-school age kids have tried nicotine. These numbers underestimate the problem, as they include the younger ages (15 and 16). Larger surveys of Canadian youth allow a closer look at each grade, and show that the child who enters high school in grade 9 as likely as not to have tried vaping before graduating.

E-cigarettes are the product that is getting kids hooked on nicotine

Results from this wave of the CTNS suggest that vaping may be increasing the long decline in cigarette use, but that the cost of this is higher overall nicotine use in this next generation. If so, this is an outcome that was recently documented in the United States. 

Continuing declines in adolescent smoking of combustible cigarettes are not guaranteed.  Research shows that young e-cigarette users are 3-4 times more likely to become cigarette smokers than adolescent non-users of nicotine.

E-cigarettes have increased the number of American teenagers hooked on nicotine.  

That is the key finding of a new study by MeLisa Creamer and colleagues [1] that analyzed data from the US National Youth Tobacco Survey, conducted annually from 2004 to 2018 among a representative sample of US middle school and high school students.  While cigarette use declined, e-cigarette use increased markedly. The net effect was more nicotine users in high schools.  This was true both for ever use and current use of nicotine, as shown in the graphs below. By 2019, 15% of American high school students were current nicotine users.

Prevalence of cigarette and e-cigarette use, 2004-2018
USA NYTS. From Creamer, M et al. 

Report from WHO's scientific panel on tobacco regulation draws fire before it is published

During COVID, the World Health Organization came under frequent and nasty attacks over its scientific advice and policy recommendations. It now looks like similar attacks are underway on its scientific advance and policy recommendations on tobacco.

The issue is the reluctance of the World Health Organization (and the Framework Convention on Tobacco Control) to endorse the use of e-cigarettes as part of a tobacco-reduction approach. The catalyst is the upcoming report of the WHO Study Group on Tobacco Product Regulation (aka TobReg).

For over 20 years, the WHO has commissioned a panel of scientists to provide advice on ways to regulate tobacco products. ("to advise WHO about scientifically sound recommendations to Member States addressing the most effective and evidence-based means in order to fill regulatory gaps in tobacco control and achieve a coordinated regulatory framework for tobacco products.")  This panel of scientists includes physicians, public health experts, toxicologists and other bench scientists and regulatory experts.

Theirs is not an enviable job. Translating science to health policy is not easy at the best of times, let alone when trying to regulate an industry that has the scientific upper-hand and the willingness to exploit it.

For the most part, TobReg has kept out of the limelight, drawing little interest or opposition, even when they provided strong advice on key regulatory concerns, like how to reduce the attractiveness and addictiveness of tobacco products.

Their 8th report, however, has drawn fire before it has even been published. Special meetings of British parliamentarians have been held . Tabloids have been alerted. Lengthy briefs have been written. 

The trigger for this public relations onslaught was fired with the WHO Executive Board was given advance notice of the recommendations that would be in the report on TobReg's 10th meeting.

Extracts from that report (pasted below) show that this group of scientists are urging countries to stay the course in implementing FCTC measures, and to ensure that heated tobacco products (like IQOS) are not misleadingly marketed.

With respect to e-cigarettes, TobReg came to 4 conclusions:

1. there should be a ban on commercial advertising by manufacturers and their agents;
2. that e-cigarettes should not be allowed to provide higher amounts of nicotine than cigarettes
3. that vaping liquids that blend cannabis and nicotine should be banned
4. that open-systems that allow for users to tinker with dosages should be banned.

In arriving at these recommendations, the panel reviewed 9 commissioned background papers. Even before these reports and the other evidence used by the committee are made public, their recommendations do not seem out of line with those made by other independent scientists and analysts.

Some opponents of the World Health Organization and some proponents of vaping appear to be using the upcoming report as a way to challenge both the credibility of the WHO and the evidentiary basis for nicotine regulation. These campaigners have already succeeded in having U.K. Parliamentarians consider whether the World Health Organization is "fit for purpose".

The focal point for their campaign is this fall's Conference of Parties, when government representatives meet to plan the next steps in implementing the Framework Convention on Tobacco Control. 

This mobilization effort, with its exaggerated claims and challenge to science, is reminiscent of past campaigns launched by the industry against smoke-free spaces, advertising bans. If you can't change the facts, then give a beating to those who are talking about them in the hopes you will scare off those with real power.

Plus ça change....

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From: WHO. Report on meetings of expert committees and study groups. EB148/47

Report of the tenth meeting of the WHO Study Group on Tobacco Product Regulation, virtual meeting - 28 September–2 October 2020

27. The tenth meeting of the Study Group discussed nine background papers on the following areas:

• toxicants in heated tobacco products: exposure, health effects and examination of the claims of reduced risk
• the attractiveness and addictive potential of heated tobacco products: effects on perception and use and associated effects
• variability of heated tobacco products: considerations and implications
• regulatory mapping of heated tobacco products, including country approaches, barriers to regulation and regulatory considerations
• exploration of the methods available for the quantification of individual health risk and application of these methods to electronic nicotine delivery systems 
• evaluation of population health impact and implications for regulation
• estimation of nicotine exposure from use of electronic nicotine delivery systems compared with that from conventional cigarettes; flavours in novel and emerging nicotine and tobacco products and traditional products
• use of heated tobacco products: switching and dual and poly use of tobacco products
• and global landscape of novel and emerging nicotine and tobacco products marketing, promotion and associated impacts. 

In addition, the Study Group discussed two horizon scanning papers on: 

• nicotine forms in the tobacco plant, chemical modifications and implications for electronic nicotine delivery systems; 
• and e-cigarette, or vaping, product use associated lung injury.

The information from these papers will update knowledge and advance nicotine and tobacco product regulation in order to inform policy at global level. 

Main recommendations 

29. The main recommendations to policy-makers and all other interested parties include, but are not limited to, the following: 

(a) to maintain focus on evidence-based measures to reduce tobacco use as outlined in the WHO Framework Convention on Tobacco Control and seek to avoid being distracted from these actions by the promotion of novel tobacco products such as heated tobacco products; 

(b) to use existing regulations for tobacco products to regulate heated tobacco products (including the device) and consider broadening the scope of the existing regulations, where regulatory loopholes may be exploited by the tobacco industry, including in countries in which these tobacco products are currently not legally available;

(c) to apply the most restrictive tobacco control regulations to heated tobacco products (including the device), as appropriate within national laws, taking into account the need for a high level of protection for human health; 

(d) to prohibit all manufacturers and associated groups from making claims about reduced harm of heated tobacco products, compared with other products, or portraying heated tobacco products as an appropriate approach for cessation of any tobacco product and ban their use in public spaces unless robust independent evidence emerges to support a change in policy; 

(e) to ensure that the public is well informed about the risks associated with use of heated tobacco products, including the risks of dual use with conventional cigarettes and other smoked tobacco products, and also their use during pregnancy; to correct false perceptions, counter misinformation and clarify that reduced exposure does not necessarily mean reduced harm; 

(f) to rely on independent data and to support continuing independent research on the public health impact of heated tobacco products, along with critically analysing and interpreting tobacco industry-funded data, including but not limited to research data pertaining to emissions and toxicity of heated tobacco products and associated exposures and effects in users and non-users; 

(g) to require tobacco manufacturers to disclose all product information – including product design, chemical profile, total nicotine content, nicotine forms, toxicity, other findings of product testing and testing methods – to appropriate regulatory agencies at least once a year; any modifications to products should require an updated report; 

(h) to ban all activities related to the commercial marketing of electronic nicotine delivery systems, electronic non-nicotine delivery systems and heated tobacco products, including in social media and through organizations funded by and associated with the tobacco industry; 

(i) to prohibit electronic nicotine delivery systems and electronic non-nicotine delivery systems over which the user can control device features and liquid ingredients (that is, open systems); 

(j) to prohibit the sale of electronic nicotine delivery systems that have a higher abuse liability than conventional cigarettes, for example by restricting the emission rate or/flux of nicotine; and 

(k) to prohibit the addition of pharmacologically active substances (in jurisdictions where they are legal) other than nicotine in electronic nicotine delivery systems, such as cannabis and tetrahydrocannabinol to electronic nicotine delivery systems and electronic non-nicotine delivery systems. 

Big Tobacco and New Cannabis (and why we should care)

This week’s news that British American Tobacco (BAT) acquired a large share of Organigram, a Canadian cannabis company should have come as no surprise. Tobacco companies have recently signalled that they are very much getting into the cannabis business.

In an industry noted for expanding through mergers and acquisitions, we can only expect more such announcements. Indeed, BAT has set up its own venture capital arm to manage such investments — Btomorrow Ventures / Better Tomorrow Ventures.

In yesterday's press release revealing of the deal, BAT reminded the business community of its plans to expand into new drug markets. As it has previously explained, vaping is key to restoring the size of its traditional customer base - but products like cannabis are the key to enlarging it.

"This agreement augments ongoing BAT activities to expand its portfolio ‘beyond nicotine’ and follows the pilot launch of Vuse CBD Zone in Manchester, UK earlier this year.  The collaboration reinforces BAT’s consumer-centric multi-category approach."

‘Beyond nicotine’ is key to gaining even more customers.

BAT says the Organigram deal “augments ongoing BAT activities to expand its portfolio ‘beyond nicotine’ and follows the pilot launch of Vuse CBD Zone in Manchester, UK earlier this year. The collaboration reinforces BAT’s consumer-centric multi-category approach.”

The agreement between BAT and Organigram involves a trade of £126 million (Cdn $240 million) in return for one-fifth (19.9%) of Organigram’s shares, and a couple of seats at the board table. The companies will co-manage a ‘Centre of Excellence’ based in New Brunswick and work together to develop the “next generation of cannabis products”.

The resource imbalance between selling and protecting

This agreement exposes the imbalance between the deep pockets available to BAT and other tobacco companies to increase their market, and the small amount that is made available to governments to protect consumers from this marketing.

Relative to its overall operating costs, BAT’s investment in Organigram is small, but it nontheless dwarfs public investments in Canada to reduce the harms from tobacco or cannabis. Last year Health Canada spent ($35 million on tobacco control activities) and ($66 million on cannabis-related activities.)

The writing on the wall: a merged tobacco-cannabis market

The plans of BAT and Philip Morris International to become players in other drug market is captured on recent slide presentations made to investors. While BAT makes explicit that their focus is on cannabis, PMI speaks euphemistically about “botanicals”.

In February, BAT told investment analysts in New York that its new business lines would allow them to apply their distribution channels, their political influence, their 'M&A' ability to gobble up competitors and their 'insights' into human drug use. 

The drug effects they were targetting (BAT slide 36 shown below) are "on the go wellbeing and stimulation", "boost & energy", "clarity and focus", "calm and relax". With "high growth & margin categories" they predict there is lots of money to be made.

In the same week, PMI hosted an overview of its operations for investors, during which the CEO presented their rationale for getting into the business of selling other drugs ("going beyond nicotine").

Like BAT, PMI sees its experience in tobacco, its knowledge of inhaled drugs, its product distribution strengths and its marketing savvy - "ability to change consumer behaviour" - are assets that can be applied to such "new adjacent areas". The company predicts that within four years that the market for these non-tobacco drug 'botanicals' will hit US $29 billion (Cdn $36 billion). (PMI slide 34)

The regulatory response that is yet to be drafted

Canada was a pioneer in the commercialization of cannabis, and consequently may be forced into being a pioneer of ways to address the economic and technical power of tobacco companies to forge a commercial synergy that increases the harms of tobacco and cannabis.

Canadian laws already provide some protection from tobacco companies fuelling a new wave of drug use. Provincial cannabis laws ensure that cannabis and tobacco cannot be sold in the same store. Federal cannabis and tobacco laws draws lines between tobacco, vaping and cannabis products - cross-branding of tobacco and vaping products is forbidden and vaping products can't taste like cannabis - but these laws were not drafted in anticipation of the new realitiy. There are no investment restrictions, no barriers to sharing of consumer research, co-marketing, or other accelerators of nicotine, cannabis and other drug sales.

The vulnerable consumer vs market growth 

Cannabis and tobacco suppliers compete largely in the same market. Canadian researchers found that in 2013-2014 half of Canadians who have smoked cannabis more than once in the past year are also tobacco smokers and more than three million Canada's 5.5 million smokers were also ever users of cannabis. [1] (The higher risk of smoking among cannabis users is considerably larger than for other risk factors, including education, income, race, gender, indigenous status, etc). 

Canadian smokers and tokers often use both products together.  University of Tornto researchers analyzed data from a health monitoring survey conducted in Ontario from 1996 to 2017. In 2017, 40% of Ontarians who used cannabis had mixed tobacco with it (although this percentage had declined over years). [2]

More evidence of the harms of cannabis

Recently-published research provides new reasons for regulators to respond forcefully to any development that increases the likelihood of smoking tobacco or cannabis. 

Historically, because cannabis use is so frequently associated with tobacco use, it has been hard to know what the risks of cannabis use are, as distinct from the risks of tobacco use. This has changed. American researchers, led by Siddarth Shah [3] succeeded is isolating the health consequences of cannabis use from those of tobacco by using data from the U.S. Behavioral Risk Factor Surveillance System. This is a nationally representative survey with a very large sample size, and by pooling data from three years they were able to have observations for 133,706 cannabis users who had never smoked tobacco cigarettes. They found that frequent cannabis smoking (10 or more days a month) was associated with an 88% increase in the risk of coronary artery disease and an 81% increase in the risk of stroke.

This finding should be of particular concern to frequent cannabis smokers, including those smoking cannabis for medical reasons.  The perceived medical benefit of cannabis use may be offset by increased risks of coronary artery disease and stroke.

References

[1] Chaiton M, Callard C. Mind the gap: Disparities in cigarette smoking in Canada. Tob Use Insights. 2019.

[2] Navitha Jayakumar, MPH, Michael Chaiton, PhD, Renee Goodwin, PhD, MPH, Robert Schwartz, PhD, Shawn O’Connor, PhD, Pamela Kaufman, MLA, PhD. Co-use and mixing tobacco with cannabis among Ontario adults. Nicotine & Tobacco Research, Volume 23, Issue 1, January 2021.

[3] Shah S, Patel S, Paulrai S, Chaudhari D. Association of marijuana use and cardiovascular disease: A Behavioral Risk Factor Surveillance System data analysis of 133,706 US adults. American Journal of Medicine. 8 November 2020.

COVID-19 and smoking

This week marks the one-year anniversary of the Director General of the World Health Organization first declaring  COVID-19 a pandemic. Two months from now, on May 15, will be the 35th anniversary since the World Health Assembly identified tobacco smoking as a global pandemic. This post reflects on these two pandemics and what we have learned about the relationship between them. 

Both these pandemics are leading causes of Canadian deaths.

Over the past 12 months there have been over 22,000 deaths in Canada from COVID-19 (and counting).  During the same period there have been over 50,000 deaths in Canada from smoking (and counting). Smokers generally die earlier than those felled by COVID: in Canada the average age of death from smoking is about 72 years of age, while the average age of a death from COVID-19 is reported to be in the 80s.

Smoking increases the risk of severe COVID-19 outcomes

Soon after the COVID-19 pandemic was declared in 2020, reports began to appear that smoking was apparently protective against COVID-19.  Early studies from France, like the one led by Miyara Makoto [1] led to widespread news reports that symptomatic COVID was less likely among smokers. Methodological problems with this and similarly-designed studies were soon identified by Anna Gilmore at the University of Bath. [2] 

Since then, a number of studies have been published which not only debunk the idea that smoking might be protective, but which consistently show that smoking both increases the risk of getting symptomatic COVID-19 and of a more severe disease experience. Two recently published studies reviewed this research and conducted a meta-analysis of the data. A meta-analysis of  7 cohort studies conducted outside of China found that being (or having been) a smoker "seems to negatively impact both SARS-CoV2 infection and COVID-19 severity." [3] A study of a larger number of papers (including a review of over 1,000 scientific articles and a meta-analysis on 40 studies) concluded that current smokers had a 58% increased risk of severe COVID-19 disease and a 46% increased risk of death from COVID-19. Both studies found an increased risk also for former smokers.[4] 

Vaping increases the risk of being diagnosed with COVID-19

California researchers looked at a representative population sample of American youth and young adults (aged 13-24) found that those who had ever used e-cigarettes were 5 times more likely to be diagnosed with COVID-19, and that those who used both cigarettes and e-cigarettes were 7 times more to have a COVID-19 case confirmed. [5]

The view of the World Health Organization

Like other public health authorities, the World Health Organization has worked to clarify the additional risks of COVID to smokers. Early in the epidemic, it undertook an expert review, issuing a scientific review in June 2020 which found "the available evidence suggests that smoking is associated with increased severity of disease and death in hospitalized COVID-19 patients". [6]

The view of the U.S. Centers for Disease Control

In setting priorities for COVID-19 vaccinations, the U.S. CDC included smoking as an underlying medical condition (as with chronic kidney disease, heart conditions and diabetes) which merits smokers being placed in the first 3 priority tiers for vaccination. [7] A few U.S. states (including Illinois and New Jersey) have followed this guidance.

Other authorities have other views

In setting guidance for priorization of vaccinations, Canada's National Advisory Committee on Immunization (NACI) relied on a review of risk factors for severe COVID outcomes that considered only evidence from OECD countries published before June 2020. [8] Unlike the CDC, NACI does not include smoking as an underlying additional risk for COVID. [9] The United Kingdom government's guidance on vaccination does not identify smoking as a health risk [10], based on a review of 3 studies,[11] one of which was the controversial Makoto paper. The EU's Centre for Disease Prevention on Control recognizes that smokers face a higher risk from COVID. [12] 

Disinformation campaigns and other tobacco industry tactics

Public health authorities, like the WHO, have been attacked by campaigns seeking to discredit the link between smoking and severe COVID outcomes and to otherwise discredit efforts to reduce smoking. A comprehensive review of these activities is available at the TobaccoTactics website.

References

[1] Makoto Miyara, Florence Tubach, Valérie POURCHER, Capucine Morelot-Panzini, Julie Pernet, Julien Haroche, Said Lebbah, Elise Morawiec, Guy Gorochov, Eric Caumes, Pierre Hausfater, Alain COMBES, Thomas Similowski, Zahir Amoura. Low incidence of daily active tobacco smoking in patients with symptomatic COVID-19. Qeios ID: https://doi.org/10.32388/WPP19W.3

[2] Gilmore A. Review of controversial study related to smoking and COVID-19.  27 April 2020.

[3] Aoife Rodgers, Manasi Nadkarni, Emilie Kruke Indreberg, Lenah Alfallaj, Zubair Kabir. Smoking and COVID-19: A Literature Review of Cohort Studies in Non-Chinese Population Settings. Tobacco Use Insights. https://doi.org/10.1177/1179173X20988671. 22 January 2021.

[4] Adinat Umnuaypornlert , Sukrit Kanchanasurakit, Don Eliseo III Lucero-Prisno,Surasak Saokaew. Smoking and risk of negative outcomes among COVID-19 patients: A systematic review and meta-analysis Tob. Induc. Dis. 2021;19(February):9 DOI: https://doi.org/10.18332/tid/132411

[5] Gaiha SM, Chang J, Halpern-Felsher B. Association between youth smoking, electronic cigarette use and COVID-10. Journal of Adolescent Health. https://doi.org/10.1016/j.jadohealth.2020.07.002.
11 August 2020.

[6] World Health Organization. Smoking and COVID-19Scientific brief30 June 2020

[7] Centers for Disease Control and Prevention. The Advisory Committee on Immunization Practices’ Updated Interim Recommendation for Allocation of COVID-19 Vaccine — United States, December 2020. Morbidity and Mortality Weekly. January 2021.

[8] Aireen Wingert, Jennifer Pillay, Michelle Gates, Samantha Guitard, Sholeh Rahman, Andrew Beck, Ben Vandermeer, Lisa Hartling/ Risk factors for severe outcomes of COVID-19: a rapid review. Medrvix. September 1, 2020.

[9] National Advisory Committee on Immunization (NACI): Statements and publications

Preliminary guidance on key populations for early COVID-19 immunization. November 2020. 

[10] Public Health England. COVID-19: the green book, chapter 14a. 

[11] Williamson, EJ et al. Factors associated with COVID-19-related death using OpenSAFELY. Nature. July 2020. 

[12] European Centre for Disease Prevention and Control. Covid-19 vaccination adn prioritisation strategies in the EU/EEA. December 2020. 

 

BAT's report on "Vapour in Canada" validates new provincial and federal regulations

Over the past six months, new restrictions on vaping product marketed have been implemented by the federal and provincial governments which share responsibility for public health. This post provides an update on some of these measures - and on the reasons they are needed.

BAT reports that flavours and packaging are the key to its success

In the 2020 Annual Report it published this week, British American Tobacco provided validation for these regulations -- and the need for more. (The Canadian vaping market is one where half of vapers are under 25 years of age and 4 in 10 have never once smoked a cigarette.) 

In Canada, BAT says the formula for its success is fancy packages, flavour innovations and on-line marketing that engages consumers. It also underscores that its goal for these products is "consumer retention". It makes no mention of smoking cessation, although it does identify addressing the market for recreational drug use ("sensorial experiences"):  

From BAT's 2020 
Annual Report

"The rise of Vype/Vuse to the number 1 vapour brand in Canada in less than three years demonstrates an offer that resonates with the consumer. The migration to Vuse fuelled this with the introduction of award-winning iconic pack expression that set Vuse apart on the shelf and conveyed the breadth of flavours on offer.

Meeting consumers' growing demand for new sensorial experiences saw the deployment of a pipeline of unique flavours brought to life via creative technologies.

Our retail presence provided a foundation for scale to developing direct consumer engagement/offers while our e-commerce revenue growth is attributed to going beyond a transactional relationship by offering subscription, delivery and personalisation. Faced with constant regulatory changes, we have responded with speed and agility to ensure consumer retention."

Protective measures from federal and provincial governments:

* On March 1, Prince Edward Island's ban on flavoured vaping products came into force. PEI is now among a small group of national and sub-national jursidictions to lead the ban on e-cigarette flavourings: Others include Finland, Nova Scotia, Massachusetts, California, New York State, New Jersey and Rhode Island.  

* In February, Health Canada shared its plans to introduce regulations later this year on restrictions on vaping flavours and reporting requirements on vaping product suppliers. It also indicated that next year it would be proposing restrictions on package and design features. Its consultation period on a proposed 20 mg/ml cap on nicotine ended last week. 

* In December, the Quebec minister of health indicated that this province too would be restricting nicotine and would ban flavoured products. These measures were among those recommended by a panel of experts that had been commissioned earlier in the year.

* In October, Nunavut introduced legislation that would ban flavours and impose other restrictions. The legislation has received second reading. 

* In September, B.C.'s restrictions on nicotine concentration and limitation of flavours to age-restricted specialty stores came into effect. On that date, the province also required vaping produts to be sold in plain-ish packaging (using only text and images permitted by regulation). Israel is the only jurisdiction to date to require plain packaging of vaping products. 

* In September, Health Canada's restrictions on promotions came into effect. The regulations ban promotions "done in a manner that allows the advertising to be seen or heard by young persons."

Download updated fact sheets:

• B.C. Packaging restrictions on vaping products
• Provincial and federal regulations on vaping products
• Timeline of selected regulatory actions on electronic nicotine devices

The untapped resource of tobacco industry reports

How much did Imperial Tobacco spend last year to promote its vaping products in Canada?
Which Ontario cities have the greatest concentrations of tobacco or vaping retailers?
Did plain packaging reduce the number of tobacco brands sold in Canada?
How do companies measure the taste of their products?
What proportion of vaping liquids sold in B.C. are flavoured? 

The answers to these questions currently lie on computer servers in government offices across Canada. This post (and an accompanying fact sheet) review the reporting requirements of tobacco suppliers and the systems in place to apply this information to public use.  

Information gathering by Health Canada 

One of the lesser-sung accomplishments of Canadian health authorities is their willingness to force force tobacco companies to be open about the additives and ingredients they used in their products.  The governments of British Columbia and Canada collaborated to pioneer requirements for companies to share ingredients and to measure the quantities of several dozen toxins in cigarette smoke. B.C.'s  1998 Testing and Disclosure Regulations were superceded by the 2000 federal Tobacco Reporting Regulations (TRR) which also require disclosure on sales and prices, promotional activities, of production and packaging and other important information. 

The federal regulations were recently revised, with even more reporting obligations imposed on the companies. Now they must also provide Health Canada officials with "a full copy of every research report" -- including consumer research, taste tests, and research into ingredients and reducing toxicity. 

Similar obligations are not yet in place for vaping manufacturers, although Health Canada has made doing so one of its regulatory priorities and has indicated that it will simultaneously be updating its Tobacco Reporting Regulations. Nonetheless, at least two of the major vaping manufacturers are already required to provide information on sales and promotional expenses in each province because the TRR requires tobacco companies to file reports on their marketing activities for any other product they sell, even if no tobacco is involved. Imperial Tobacco must therefore submit annual reports on its promotions and sales of VUSE, JTI-Macdonald on its sales of Logic products and likely Imperial Brands on its past sales of Blu. 

The TVPA also authorizes the department to establish regulations regarding the disclosure of this information to the public (s. 6.2, 7, 7.6, 7.8 ).  Health Canada has indicated that it intends to develop regulations regarding public disclosure this fall. 

Information gathering by provincial governments 

Although health ministries in Alberta, Ontario and Quebec are authorized to require reports from tobacco suppliers, none have yet done so. Tobacco wholesalers are licensed in all provinces and territories, and retailers are licensed by all but two provinces (Saskatchewan and Alberta). The finance ministries which manage this licensing system have the authority to require reports related to tax returns, and receive monthly reports on sales value, volume or both. As a result of these obligations, lists exist of all tobacco license holders, although some may no longer be selling tobacco. Provincial tax authorities have monthly data on tobacco sales. 

In 2020, three provinces (B.C., Newfoundland and Nova Scotia) created obligations for vaping product suppliers to register or provide information. Ontario requires that specialty vaping stores benefitting from exemptions to marketing restrictions be registered with local public health units. The B.C. E-Substances Regulation (which is a regulation under the province's Public Health Act, and not its Tobacco and Vapour Products Control Act) requires business owners to provide detailed information on the vaping products sold. Information on the quantity of sales must be provided by January 15 for the first 3 quarters of the preceding year. Nova Scotia requires vaping wholesalers to provide monthly information on the quantity of vaping products sold.

Information gathering by commercial firms

A number of commercial enterprises monitor tobacco and vaping product sales and promotion. Nielsen has made arrangements with retailers across the country to gather information from cash registers. Those who purchase this data receive information on the quantity and price of products sold. Numerator has made arrangements with advertising firms to collect data on promotions in measured and new (digital) media, including estimated expenditures and advertising content. Euromonitor has arrangement with producers and other stakeholders to monitor market and brand developments.

Information gathering by tobacco companies

Tobacco companies are active in a number of research areas, including health-relevant research on their products (eg. emissions), on consumers (product testing, polling), on their competitors (market monitoring). 

By selling directly to retailers (instead of using wholesale distributors), the companies have detailed knowledge of shipments and sales for each retail outlet. Generally, retailers can only purchase tobacco products if they are under contract to the manufacturers. Imperial Tobacco mandates contracted retailers to provide information on local prices. (Clause 5(viii)) The companies are not (yet) obliged to disclose to government the data they collect in this way.

Some information-sharing and examples of how more could be done

To date, some of the data collected by governments, industry and commercial organizations has been shared and used for public health purposes.

• Health Canada shares some of the sales data provided, in presentations to interested parties and on its web-site. It has provided some researchers with access to data. In previous decades, the department released sales data on a brand-level, and also shared data it purchased from commercial agencies. 
• Health Canada provides some of the information it purchases from commercial agencies. 
• British Columbia (and possibly other provincial governments) make available the identity of retail license holders. Most provinces make available the list of wholesale licensees. 
• Federal and provincial governments host open-data portals, facilitating the public release of data. 

There is currently no data-sharing agreement among Canadian tobacco regulators, and no structure or system in place to facilitate public or government access to data related to tobacco industry activities and no structures for proactive disclosure of industry reports. It is possible that these are anticipated as part of Health Canada's new data strategy. 

Examples can be drawn from data-sharing systems for other products or in other jurisdictions:

• France maintains an observatory on tobacco sales, providing monthly updates on sales of tobacco and stop smoking medication.
• Data hubs for cannabis sales and use are maintained by Statistics Canada and by Health Canada.
• Although data-sharing challenges are an identified impediment to addressing COVID-19, daily updates on key indicators are available on a local and global basis. 

A fact-sheet summarizing the reporting requirements of tobacco suppliers is available here.