Imperial Tobacco Canada: Involvement in Cigarette Smuggling

This page was last edited on at

Imperial Tobacco Canada (ITC) is a subsidiary of British American Tobacco. In 2008, ITC pleaded guilty to customs charges related to cigarette smuggling.1

Smuggled Cigarettes Through Indigenous Reserves

Between 1989 and 1994, several tobacco companies had legally exported their cigarettes to the US for them to be smuggled back to Canada through indigenous (or First Nations) reserves, evading Canadian excise taxes.23

An April 1994 internal document from BAT subsidiary ITC to BAT leadership admitted the company’s role in smuggling: “ITL [Imperial Tobacco Canada Ltd] rebounded by making its major trademarks available in smuggled channels in the second half of 1993”.45

In the meantime, tobacco companies used this surge in illicit tobacco trade they were responsible for to pressure the federal government to reduce cigarette taxes. The lobbying efforts proved successful, leading to tens of thousands of additional smoking-related deaths.36

ITC Pleads Guilty

In 2008, Imperial Tobacco Canada 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.”1

The company had to pay a criminal fine of C$200 million to the federal government and additional civil fines of up to C$350 million spread over 15 years.7

Canada “Less Litigious”

Only a year before the 1999 smuggling lawsuit was filed by the Government of Canada, ITC’s Chief Financial Officer Luc Jobin had told CFO.com:

The level of litigation here is nowhere near what it is in the United States (…) Canadians are typically a lot less litigious, and our punitive damages are very different in magnitude. We’re also not facing the U.S. Congress”8

He was referring to a US Senate bill sponsored by Senator John McCain which would have increased the price of a cigarette pack by US$1.10 within five years, increased the regulatory power of the US Food and Drug Administration (FDA), and required the industry to pay US$516 billion over 25 years.9

Luc Jobin became President and CEO of ITC in September 2003 and was appointed Chairman of BAT effective 28 April 2021.1011 For more information see Luc Jobin.

Relevant Links

Imperial Tobacco Canada website

British American Tobacco website

TobaccoTactics Resources

References

  1. abNon-Smokers’ Rights Association, Imperial and Rothmans Admit Guilt in 1990s Cigarette Smuggling Crimes, website, released 19 August 2008, accessed January 2021
  2. World Bank, Confronting Illicit Tobacco Trade: A Global Review of Country Experiences,  1 February 2019
  3. abWorld Bank,  Canada: Controlling Illicit Tobacco Trade, 1 February 2019
  4. Imperial Tobacco Limited, Market Update, Truth Tobacco Industry Documents, 24 April 1994, ID:qjpx0149
  5. Non-Smokers’ Rights Association, Imperial Tobacco, Imasco, and the Smuggling of Cigarettes into Canada, NRA report, 1 July 2001, accessed January 2021
  6. P. Jha, C. Hill, D. Wu, R. Peto, Cigarette prices, smuggling, and deaths in France and Canada, The Lancet: Correspondence, 4 January 2020, doi:10.1016/S0140-6736(19)31291-7
  7. W. Marsden, How to get away with smuggling, International Consortium of Investigative Journalists (ICIJ) website, 20 October 2008, accessed January 2021
  8. R. Banham, Lawyers’ Poker, CFO.com, 1 July 1998, accessed January 2021
  9. Inside the Tobacco Deal, PBS Frontline, undated, archived 22 September 1999, accessed January 2021
  10. Luc Jobin, LinkedIn profile, undated, accessed December 2020
  11. BAT to appoint new Chairman, press release, 15 October 2020, archived 23 October, accessed December 2020