Industry reacts: Canada mandates warning labels on individual cigarettes

Convenience Industry of Canada – Anne Kothawala, president and CEO

"The focus should instead be on contraband, tax losses and youth access"

The Convenience Industry Council of Canada (CICC) is disappointed that today’s updated packaging regulations for tobacco products do not clarify the definition between a “wholesaler” and a “retailer.”

While these differences might seem inconsequential, CICC points out it is important to the various wholesaler companies in Canada, who now face a much shorter time frame to be compliant, making it extremely difficult and expensive for their companies.

[Read more: "The convenience industry unites against the contraband challenge"]

“We’ve been engaged with Health Canada for a number of months on this issue, and we’re disappointed that it did not consider the serious supply chain ramifications that this decision will have on our member businesses,” said Anne Kothawala, CICC president and CEO. “We appreciate that Health Canada agreed with some of our recommendations but are asking that it consider the wider implications of not clarifying the definition of ‘wholesalers’ and ‘retailers,’ when it comes to implementing these changes.”

“If the government is truly committed to reducing smoking rates, as these regulations ostensibly aim to do, it should instead get serious about addressing the wide proliferation of contraband tobacco products that flood communities across the country,” said Kothawala. “The government has yet to take meaningful action on cracking down on contraband products sold illegally in Canada, many of which are tied to organized crime, and we continue to call on governments at all levels to address this. Health warnings on cigarettes will do nothing to stem the flow of illegal cheap tobacco, that won’t comply with these changes, and will sell to youth without ever asking for ID.”

[Read more: "CICC Connects: Contraband and crime"]

JTI Macdonald – Elaine McKay, head of corporate affairs and communications

"What’s concerning is the retail deadline"

What is your reaction to Health Canada’s recent regulations? When the draft regulations were first published in June of 2022, we wrote a submission to Health Canada and we explained that our views were that the regulations were quite arbitrary and without merit, and since the regulations were published yesterday, they haven’t changed. It's clear that Health Canada's motive is to be the first to introduce requirements like this, a point which they make repeatedly in their press releases, but there's nothing such as to suggest that printing health warnings on sticks will make an actual difference to smoking behaviours in Canada. Interestingly, when a regulator puts in place regulations, we always ask what's the intent of the regulation, the intent in this instance? Is it to change smoking behaviour? Unfortunately, what we know is there's almost universal knowledge about the risks of smoking amongst the Canadian public. So it doesn't impact context. Well, this adaptation doesn’t make a difference. We don't think that it will, and Health Canada hasn't produced any evidence to suggest that. 

In an environment where you have universal knowledge about the risks, I think it's overstretching what mainly concerns us. We want adult, consenting consumers to be aware of the risks. We don't want young people to smoke. We want people who have made a decision to smoke to choose our brand. 

[Read more: "2023 Tobacco + Vaping Report"]

Canada is not just leading in health regulation. They're also leading in one very troubling area, illegal or black market cigarettes…[contraband tobacco] makes up to 20 to 25% of the Canadian cigarette market today. So my concern is, what Health Canada is doing is imposing more onerous and costly red tape on legitimate taxpaying manufacturing. And they’re just turning a blind eye to tackling one of the biggest tobacco related issues in Canada.

From your perspective, how do you think that this will effect Canada’s convenience store industry?

I think it will affect them significantly. You know, JTI, in all of its relationships with [c-stores] we call ourselves, “your partner to change” and this is a significant change. What’s concerning is the retail deadline. At some point every single retail outlet in Canada has to comply with the regulation. The way the regulation is drafted though it's going to be impossible for a retailer to know what's in the pack. And if that pack contains regular kingsize cigarettes that are compliant with the regulation. So it puts the onus on the manufacturer to play the role as an educator in this environment because Health Canada will come and they will do inspections. They will try to make sure that the store owner is compliant, but by simply looking at the pack, as a store owner normally would, there’s no way for your average c-store owner to know whether each individual cigarette has been labelled correctly and that's very unfortunate. 

[Read more: "The real story behind the numbers"]

What could Health Canada have done better to support retailers and the health of Canadians?

In telling the story of the regulations, we have to be very clear that we support evidence-based regulation. And Health Canada has not provided any evidence that the data regulation around classic and branded packs has reduced the incidence of smoking and now they are imposing additional rounds of regulation. Our concern is the impact on legal manufacturers and not any oversight on illegal manufacturers of tobacco. And obviously, our trade partners. We are committed to being their partner to change, but Health Canada needs to pay close attention to whether or not the policies that they institute do in fact make a difference to those who consume tobacco products.

Ontario Convenience Stores Association – Dave Bryans, CEO

"Ignoring contraband while imposing new rules on legal smokers potentially sends more consumers to the black market"

Health Canada has taken the next step in tobacco regulations with new health warnings and now warnings on each cigarette. These changes are in line with their tobacco strategy to reduce consumption while discouraging individuals from taking up the products.

Retailers throughout Ontario believe that this initiative will potentially change the habits of legal smokers, but will do nothing to influence or change the 30-35% of all Ontario smokers who source their cigarettes through the contraband ( untaxed market) nor does it regulate any of these illegal production facilities to make them conform to Canada laws.

Contraband tobacco infiltrates every community, negates any health initiatives and hurts family run convenience stores who follow all the tobacco imposed rules on us. Ontario is losing $750 million a year in tobacco taxes and it is time for Health Canada, and all levels of government to take the uncontrolled distribution and sales of contraband tobacco seriously and include this issue as part of their strategies to reduce consumption, educate consumers and collect the required tax dollars in every jurisdictions.

Ignoring contraband while imposing new rules on legal smokers potentially sends more consumers to the black market. Every level of government knows this issue but continues to ignore the growing problem. Time for action is now! 

Rothmans, Benson & Hedges Inc. 

"For a change of this magnitude to happen, we need governments to ensure regulations are keeping pace with innovation,” says managing director Mindaugas Trumpaitis

We share a common goal with Health Canada and want to move adult smokers away from cigarettes. In order to help the millions of adult Canadians that smoke quit, the federal government should modernize the Tobacco and Vaping Products Act and embrace tobacco harm-reduction policies to help existing smokers choose better alternatives. We believe that better choices start with better information. The millions of current adult smokers should be given access to the appropriate information about alternatives to allow for comparative statements on nicotine products and products should be regulated based on their risk level relative to cigarettes.

Specifically, Health Canada can accelerate change in three ways:

• Legalize access to accurate information to ensure that adult smokers have the best available scientific information through comparative statements on all nicotine products such as heated tobacco, vaping, and nicotine pouches so they can make a fully informed choice based on the relative risk level of each product versus continued smoking.

• Update Canada’s Tobacco and Vaping Products Regulations to account for new innovations and differing risk levels between cigarettes and smoke-free products. Regulations should differentiate cigarettes (combustible products) from smoke-free products (non-combustible products such as heated tobacco, vaping products and nicotine pouches) instead of regulating as tobacco or non-tobacco products, as is currently the case.

• Create a registration standard and notification process for new smoke-free products to ensure that only those that are scientifically substantiated and intended for adult smokers can enter the market. This will encourage continued innovation for smoke-free products, while helping to protect youth and non-nicotine users against initiation.

“We have made considerable strides in our ambition to transform and deliver a smoke-free future but, for a change of this magnitude to happen, we need governments to ensure regulations are keeping pace with innovation,” said Mindaugas Trumpaitis, managing director, RBH in a press release.

“Right now, Canadians are not well informed about the alternatives to smoking that are available because our laws don’t allow them to have access to information about these options or to distinguish the relative risks of one product to another. Too few Canadians know that nicotine is not the primary cause of smoking related diseases. Why is Canada lagging behind other countries instead of being a leader in helping adults leave cigarettes behind for good?”

Imperial Tobacco Canada – Eric Gagnon, vice-president of legal and external affairs

"These new regulations will require over 20% more cardboard packaging"

It is difficult to understand the government’s rationale with these new regulations for three reasons.

First, there is already a robust regulatory framework that governs the manufacturing and sale of tobacco products, which includes graphic health warnings, no branding, and mandates products to be hidden at point of sale. For decades the health risks associated with smoking have been known.

Current estimates reveal that one third of the Canadian cigarette market is illegal. Not only will these new regulations have no impact on current smokers, but they will also be ignored by a third of the market who will once again have a competitive advantage versus the legal tobacco manufacturers. The RCMP have identified 50 illegal factories and over 350 smoke shacks selling unregulated cigarettes.

Finally, these new regulations will require over 20% more cardboard packaging, and approximately 19% more ink than current cigarette packaging.  This seems a counterproductive measure when governments are trying to reduce packaging burden on the environment.