Canada tobacco tax cuts slow down smoking decline
The battle against smoking has not been helped by tobacco tax cuts in most of Eastern Canada this decade, health groups said on Monday.
Five provinces that did not go along with a broad tobacco tax rollback in 1994 saw their per capita smoking decline by 24 percent from 1990 to 1998. This extended a sharp downward trend that had started in the early 1980s.
The other five -- Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island -- only saw a per capita smoking reduction of eight percent during the eight years.
``Of all the policy measures that have been tried to date, higher tobacco taxes are the single most effective means of stopping kids from smoking and decreasing cigarette sales,'' stated Canadian Cancer Society spokesman Ken Kyle.
His group was part of a coalition that released a study of the effects of the tobacco tax cuts, implemented in 1994 to try to combat smuggling from the United States.
The coalition said in a statement that since then, prices have risen sharply south of the border due to state lawsuits against the tobacco industry, thus destroying ``whatever plausibility that argument may have had at the time.''
``Ontario and Quebec now have the sad distinction of having the cheapest cigarettes in North America,'' said David Sweanor of the Non-Smokers' Rights Association.
The 1994 federal-provincial taxes were cut by C$14 to C$21 per carton in the five provinces from around C$30. In the other five, the federal government cut its share of taxes by C$5.
Since then, Ottawa and the eastern provinces restored a small portion of the cuts in three stages, and federal junior finance minister Jim Peterson told Parliament on Monday that Ottawa was in negotiations to raise them further.
``We will raise those taxes just as high as the circumstances relating to smuggling will permit,'' he said.
The coalition recommended a C$10 jump in taxes in the five Eastern provinces that had joined the federal cut.
The study said by conservative estimates Ottawa lost C$2.87 billion in revenue in the first five years of the low-tax regime, and the five provinces that joined it lost C$1.98 billion. The other provinces saw a slight rise in taxes.
Tobacco is the leading preventable cause of death, taking 45,000 Canadian lives every year.
The main tobacco companies operating in Canada are Imperial Tobacco Ltd. and RJR MacDonald .