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;~ii:~!I i!:!;• • ::~ ~:~ BRITISH AMERICAN TOBACCO Copy Request Form Request Number: Organization: Physicians for a smoke free Canada 10 I Request Details Request Date: • oee• Io••• de. •o oe •• lob eee• ee •••B oeo • eeoo el. o • • • e o o ee • m B eamB File Number: .]-~' C- 5'5 Box Number: ~ ~) ::2~/7/ .e• PeDeoo•.•oeoDee.ea •eo,o,eDelo•imoomoleo• Page Range: First Page ~ G ~ 0 ~ (7 _~ ~ Last Page ~ ~7 ~ ~ ~ 0 ~" 0:2- Requested By: (Print Name) Details below will be filled in by Depository Staff Only II Copy Details Copied By: .... ~~~..... ~.~.~'~.~.. ........................ Date: ..... O21. --/(~..l~.-- ............ Time:• ~.. Z.~..~. ........... Copy Checked By: • . . ... • • ............ • eeeooo6ooeeee .oloooooa, ,e eee a• •oml• •• • Date: ................................. D .. Time: ............................ . .. III Delivery Details Checked By: ..... ....... Date: ................ ... . eooo ~eeeeeoe ooe~I moo•o• e Sent By: ....... Date: • •.ol*oeeoe6•*e~oeoeoooeo• oe* e D a' eo(* emeo..eee.oooe ••co•o• BATCo document for PFSFC 1 March 1999

BRITISH-AMERICAN TOBACCO COMPANY LIMITED TO: SUBJECT: BATCo Board. General Managers. Regional Finance Controllers, Reads of Department Canada - Cigarette Smugoling and Tobacco Taxes It is four months since the Canadian Governmem announced a sub.stantiaI reduction in Federal excise taxes in an efforz to eliminate smuggling of cigarettes into Canada from USA. Further to my note of t4 Febr.-ars', I can now advise some more information and consequences of this action. Incirec: :axes on tobacco products in Canada escalated enorrnousiy in the late 1980's and early 1990's. eg. taxes rose in the period I98t-199I by 575% and Federal and Provincial Governments co!let: ..'..ore than CS 7 biiiion per annum However. the Quebec Government for example collec:s less money than it did in ~gss as so many smokers were purchasing smuggled cigarettes. The highest incidence &smuggling from USA is into the provinces of Quebec and Ontario through Indian reservations straddling the border This illegal "rade had built up into a major, organised and hig.hiy profitable business, it was also provoking other c.,iminal actixitv It was estimated that about 2 million Canadians consumed t5 billion contraband cigaretzes in 1993. in Quebec province the market share was around 60~ o. Federai and Provincial Oo,,'e.'w'n, ent losses were estimated at C$ " billion per annum. Before :he reduc:ion a t.',-gical (Quebec) RSP was C.~ 23Z;miIle o:" which C$ 176 ,.,,'as taxes, after the reductior.: the fi~res are RS? C$ 118 and taxes CS 5.'?" Quebec and Ontario foi!owed the Federal lead anl reduced respec:ive!y by CS l I and CS 9,,60 cents per car.on. Nova Scotia and New B,-answizk by CS ? and .-'.nZiv Pl by CS 9 25. Other provinces have not followed and so the reductior, there is only the Federal CS 5:'canon. The reduction m cigarette smuggling has been dramatic. Quebec pciice authorities estimate a decline o/90" 0 Duty paid cigarette sales have cor'r, espondingi.v increased, it is too soon to say whether consumption has increase~ cr whether consumers have simply :ra~sferred to legai product. The impac: on the smugglers' business has been severe, bur some increase in non-tobacco illicit trade is possible The pre'5ous enormous price differential between USA and Ca.':aS!an duty paid product has gone, bur there are now wide in:er Province prices which does encourage some degree of inter Pro'.ince 'trade' So!ling price examples are (Canadian S per canonic USA {average.! (23 00). Que'=.ec (23.75). Ontario (24.961. Mani:o'=a (45 S3), New Brunswick (33 49). Alberta (40.87), Saskatchewan (~6.63). British Columbia ,,4993). The tax reduction has been effective. Of course the other measures announced, e.g. tighter policing and packer print markings will have contributed. You have advised that other Governments around the worid have been follovd~g the Canadian situation x~ith interest. You should continue to use this ~lArnple in your lobbying against penal and discriminatory, indirect tax rates. 1 D ,I Bishop 22 June 1994 MILLBANK KNOWLEGREEN STAINE$ MIODLESEX "rWIglDY 0 0 ,,D 0 t.,a ,.0 Co BATCo document for PFSFC 1 March 1999

s ,~, r BRITISH-AMERICA.N TOBACCO COMPANY LIMITED TO: BATCo Board General Managers "-'--" Regional Finance Conwollers ~ Heads of Department ,.. . . ? ! /.. FROM: David Bishop ~ . w • .." DATE: 14 Februa~' 1994 ; s SUBJECT: Excise Tax Reductions -.,,-----" ......... Canada - lower excise taxes were announced last week. see attached note This result follows a len~h.v, sustained and consisten: lobbying campaign by the tobacco induslr'y "m Canal- It is the strongest evidence to da:e that the economic reality of'the income from tc.:.acco taxes remains paramount. The Fedora[ Gove."nmem accepts ".hat the punitive ;eve! of tobacco taxation was a ma)or factor in ,he increasing and ih.~h level of smug~.!ing At the same time it is evident "ha,, the Government does not beiie,,'e that its plan z¢ "educe cigarette consumption by increasing" ..-ices was effective. (I: .'n, av even have e.'.couraged an increase) The Ca.~adian example sh0ul5 certairdv be borne in. rr, i nd when developing !zbbying argume:',:s against excessive or unrezsor.a'_':ie taxation demands. The Fe~_=rai Government still remains ostensibly ami-tobacco, as proved bv its imposi':cn of the ne~ expor: tax and sur:zx. To d~-te the Canadian manufa,::urer~ have not ye: i.'.crezsed p,ices to c~ve,-', .- this cos: ~,,~/-"h'3 [ Z..~ 1.-.I" DJ Bishop 0 0 0 ~0 ~0 .MILLBA.NK KNOWLEGREE.N 5TAI"NES MIDDLESEX TWI8 IDY BATCo document for PFSFC 1 March 1999

1DC ALERT! ,, Canada lowers tobacm taxes to fight maus~.i~ Caradz's pr~-'~e minister, Jean CY.r~ts~, has ~~-*d a cmaxpr~--,-tsive national a~on ?ia.',. t~ combat smuggRr~ which tr~.lu~ a reduction irt f~2eral cigarerm tax~. T.~e l:n'o'c~'~ee of ~.u~b~. has a.-a~et, d ~ measu.,~ ~a~. c~mplzmertt t2",ct, e cff t~e federal goverzuaa~t. As of to_-'.crr:'.ow, 9 r, ebrua.ry, the ~ ~g'as-m~ tax w-~ rid2 by C$5 (b~-dd.75") • ca.-=n ~-. ~ ?rovincss. Moreove-, the federal ~t will marc2 any provi.ndal tax reCu~on greater than C$5, to a ~um/ecleral reductmn of C$I0 (US$7.50). x--~,e p!~r. ~ ~pula~s, however, an ~ tax of C~ (L~6) a carton to be p~d by cc~ac'c~ mar:~acturers, and a three-year he.sl~ prm'mion r~'tax ti~t will increase ~% t.he rate ~ fed~'ai ta~ paid by t~acm manuiacv.n-m~ on ~ numufacm~g ~c~,=. 7"he es~,anamd CS21X) million fU~l.50 miliimO in revenue gzr~-amd by this =e~u:e w21 be used m band a major pu~c educ:a~on ~~ md ~ Nm.lth L-. a.nr~,~v,=r~ the mea.vm~, Chr~em ~tat~,: "SmuggLing is ttu'~mning the saft~ of o~ ccr~,~,~-~ieies axtd la~ liv ~eLi~<:~:l of law-al~dd~g ~ It ~ a tha-~t t~ re.-:" feb.-'.: of Ca.uadian society. We ~ tak£ng d~.siw ac'd~n tc~iay to st:~p it." I~. Quebe,:~ the prime zni,'Rster annc~.mc:~i that ~e prm, in~ was Imv~a'tg i~s tobacco tax "m/~11 (T.,~-,C&20) per ~ c~ 200 dgzretms a.,ad by C$4.~ (U$$3.50) per pack o.~ 200 g~-u-aes of smoking tobacco. The tmal reduction c~ dg~'eme taz~ in Quebec • ,~',2 t.h~."e.~re be C~I CdS$15.7~) l~r C~er e2e_-,en~ of the fect~'al goverv.m~t's anti-smuggling plan incl~.a m~,Sed erdorc~..,v.e.,,.t a: targeted smuggling areaz and a ~ent t.ha*, man~acvan~ dezz!y rr~k individual dg~'t~ ~ diffzr~Ram those man~taer, az-~. f~r dcznm~c and ex~.,-: use. I.~o'.dadve and r~,ff.:.lam~ c.l~n.g~s awe also pLarmed that ~ r~a:t ac~ by minor~ to c~a~eV~; L"t~a~e fines a1~ restrict the ]ocaflgm of tobacco v~2x~ la'ta~; "i~.~rove ~,e effec~Lveness" of health w~ on tobac~ ~,ac.ks and prolu'bi.t pa£~.,s ~t?, fewer cigaret'~, which "may appe£ m youth~ buy~',s because of low prk~'. 1",,e gove.,,rtnaen: will a/so assess the f~asibRity of plain packasmg as • way of redu~ng ~k/a~g among yourtg people- National ac~¢m plan to c~mbat smug~ Of~we of th~ Prb~ M/n/~" ['Pr.~ss release] (8 February 1994) 2 pp. ['EngSsh and Fz~mch] P,e.b. 0213OO Quebec prend les moyens pour ~rayer le c:mmm'~ iIM,gal des prodaits du mbac, de rotator: awe t,, gou~t f6d~s~l. C,~u-~n~,nt a. ~u/bec [Press ~e~se] (8 r-ebrmry 1994) 7 pp. Ref. O213O1 -=-"L ~'.-.. _'2 C~ CD ,,.D C~ G CD BATCo document for PFSFC 1 March 1999

FROM: TO: DATE: SUBJECT: pot_ ~;'- / MEMORANDUM c"c ~,,_:,~,~ .:,~,~. ;.'0 ~ .,~q.& ROGER S. ACIGMAN ..~., L Messrs. S. Potter, L. Barnes, R. Carew, T. Grivakes, C. Irving,iIC "/!] / E. Cherniak, R. Schwartz, K. Wells, P. Clarke / December 8, 1993 "How politically correct policy decisions are made without considering the facts" - Globe & Mail (Nov. 27/93) For ,.'our information. I am attaching hereto a r~ent article which appeared in ",.he Globe & Mail on November 27. L993. The article is by James Blackburn. Professor of physics at Wiiffid Laufier University in Waterloo, Ontario. i found the ~":.icle to be of particuiz.r interest and wonder whether Professor Black',".:m or this a_"z!c!e may c.e of any use in our ongoing debate. I- you '.nave ar.y though's, please do not hesitate to communicate with me. .//" j~ ~7,. ,2 ¢j1 O L~ O O O BATCo document for PFSFC 1 March 1999

TH= GLOBE AND MAIL Saturda.',. November 27, 1993 Page D8 MIND & MATTER JANIES A. BLACKBURN How polin'cally correct potic,; decisions are made, wishou; considering I ;he facts TEE r.:emrs:a::e= zfdata in matters of social ; it-.: :r'ad~ -- suzr. as enviro.".menL hcahh. e"2:z:}on, e:,~nc.-..;c policy -- often suffers i if:..-. :he inPuen:.e ofhldden .~gend~ wish- i fu~ :hink:-~ r.C pre-u~g.-..e=:. ,. Oebat-"s ::.- ffecuer.:i': con:roiled by ;.~ose who ~- sen mos: :: ::.=.'ally "hal '.;:=dies show." But the orig- , real data ,~r., ":por:s c;:ed .;re rarely gr,'en critical ap- praisal. C::i failure to ~.".sult primar: sources can t allow un.;-r:anted in:e~-.-ta=ons te be repeated ; endlessly L :::mat::'.,. :.'::'.. cake on the force ofundis- ;u~ed tru:,-. T'ne he:.:."..":sks associaie~ with sccor.dhand smoke ien~iron.-. :r.:a. tab',dec" ~oke. or PTS. in =overn- men: ar~c: s - ~e i,* ~::nt. Just '~ha: is tile sofid icientific..-.. :=nee =onze:r..:'.~ ,he danc'.rs? I rote.n:.? -eked :h: C::.~.:han Cana:r Society. the Lung Ass,'< .~;;on and "~: Non-SmoKe:-s" Rights As- see:arian C~.':aCa~ the foiiowinc, auction: How many d~:=- a ":ear :n C-'.'..~.;a can be a't:ributed m the e:T~ ts of .~,:: ~dhan~ stuck: ? The answer ",,,'as 330. When [ asked FOr :he st=roe of the m,qmate, l was -'iiree:et~ :." z _-".'.-,or by 5, E Collisha~ and K. Leahy ,Jr ...... -:.;:~::, .-M.:r:~.:,~bie to Tooa-cco Use in Canada. ':~- push:re.e,: n !he Jui.~ August. 1991. :S$~'-" O1" ~''.'~;" O~s¢~.s,~': ~ C~fiada. ~ :he bottom of Table ' .-.,.ze av. v,e :'L':a :he retevant entr',': "Pas- s:"e smok:-;. ,oaths: S-:,.:ng .Attr;b":able Mortal- ,t.', = 3.:3 :'-" .;89." A rcfcr:r.:: at the end z: :h:s paper reveals that this figure -,'as ,::'.,, n Fro,-...~." ::her arucie :;tied "Deaths :n Canada from Lung C~naor Due :o Involuntary. Smoking." .'~ Donald T Wigte. Neii E. Collishaw, . John Klr~,:-'~: and Ya.-.g Mao. oubiisned in the Ca- nadian Met:;.a! Asset:an:an Journal m ~ts May l, ~9S"~. issu: ,''m'~e= 9".~-'35 ;' In the 2b::-2c-. the ,.":.'.ars state: "The total num- iber o/'dea:~.i from iun~ -'~rz:- attributable to egpo. sure to :e.':'acco smoke :':am spouses and omer sources (mz:.-.iy the wor~:~!a~l waS .. about 3't0 i -.." The.'. ~'.so state "ha: :no estimat.,: of 330 annual ' deaths "ma~. ~ conned:r:: an upper timtt [my italics] sine.= it it ."as¢c on 'he ass=mption tha" all of the dif- ; Fcrence '.n :.riG-caner r:s.,, found bet~n ~','¢nth- Day .&dven::s~ (SDAs: -',~c had never smoked and non-SDA; ~-:" hue no;.'" .=-~oked ',,.'as due to differ- " e.".:lUi !n: .:" ." ~-r'." ¢~ok '" .C " Wha~ ha~c '~.e ~'~Cr:' I: Z;:ad s~m~hat ~hc risk t'ac- ;or :.!a:mcd For C,.,nad.. 's :~ased on a stud; of Sev- enth-Do:, Ad~,en,:s:~ F.:: ..more information on th)s point, i turned :o ..:, pa~:" :;:ed by Wigle e: el.: "A Quant;:at:~e t~t:mat¢ j:" ",'onsmokers" Lung Cancer R~sk From Passive 5w.o~mg" by J. L. Repac= and A H. Lowre}. ~.h~ch a.=~ared in the journal En~*- ronment In:ern:qtona~:",'oL I I. 1985. pages 3-22L The stud~, o1" Sc',cn:,',-Da> Advcntzsts ~mentionecl on pag~ 7.9 of the ..tr:.:ic b.', gcpace and La~rey and d:sc'~sed ,n Ap~nC:x C. ~:: :o an est,mate of 4.700 U.S. lung-cancer ~c::ns from passive :~garctte smoke. The Canadian fic.':e of 330 was generated from this by some pro.=,or~onai scaling. gepa~ and Lo~re" _~::: as the primary reFcren~ for ~he Seventh-Day i-x.,~cn!.=st study two papers by R. L. Phillips and =o-v, orkers that "appeared in the Journal of the N'at~ona! Cancer Institute and m the American Journal of E.=':d.~miology. both in Igg0. The source data ~.er: :oiiected during the period 1960-1976 From a ~_rouz of Seventh-Day Adventisls it,. Soutr.:rn Calife.,'."~a. ' "l%us. after Fo!lov..~g :'v~ .on~ '.rag; ofc~:ations and references, begir.n;ng '~,i:~ :he ~dclv ouoted ."hzure of i 330 lung-cancer deaths from seco*'~dhanc smoke in Canada :n !9S9. '.~e fin4 :no: this claim has i:s orl~,in : m extrapolations fro.-., dea:h rates in a relio~ous i group in the sour.hem Ln::e~ States more ~an a qua:t~r era century u~. The policy measure,, :,".-: r_~sult from such nonsense ! -- sv.ee..-,:ng proh:bi:;cns on smoking in public pieces, for exampie-- shz"id serve as a warning. ! On." addition~', pain: Repute ane: Lowr~z also us~ a second m::hoc ."or ::edicqng the re!ationship of seconehand smoke "=.-.i',ung cancer based on ~ti- , mates of {he a,,era.~: nu.-.,:~: of milli,,rams per day to : v.hicn a typical L'.S. non-smoker was exoos~. This ! aiterna:e me:hod yielder z figure of only 555 lung : ~n~r deaths per year- :nz: :s. nine times fewer• For Canada ;his '~,ou.,~ '.gold about 40 oredicted deaths f.'om s~ondhanC s~..oke oer year/This tar sn',.ati:r ~gure is eonven:en:?., ig,~oredb )lshe anti- s.-..o k mg Forces. Morecver. :he exposure figure was ob:ained from U.S. daP- in the sese.",:ies xhen :here were ai,-,os; no restrict:cns or, smok:-; :n ::e ',,,'orkoiac= These stud- ! ies otter no proof :nat'.-,,:.-. - fingie'ETS.~tributable : death '.,,raid oczu: in aS= '.;ork~lace in Canada andcr i the simp:,~ :ondi::on of res'..-.c:mg smoking :o desig- nated, ventilated areas, l The ~ser:ions by ~af=sso." Phiilio Rush:on of the University of V,~tem On:aria cbnccrmnv racial :haracter:sti~ of Or:,'n:a.s. Caucasmns and blacks dre,x a f::~:c .r~.. of c.':;'.::.:'~ :entrino on .'.he =redibii- it)' and imerpretauon ,.~:" ?.:., ~a'~. Yet"an equally weak case concermng :he n-.'~s s~sociaced w~ti-, second- hand smoke :s v.~de!; a:ce::::, and even teats to sig- niflca~: go~emment'ant:-s-oking initiative. The degree of m::;',,:.~.-'!og~cal scru:iny ~evelled against poliuca3y incvrr:c: research is wa:ved en- tirely in the :ase o f po~it:~2.,, corr~t issue, propelled :n ~his ins:an~ by the ~r.*,u,qces of the an:i-smoking '.obby. arl¢ supported b.,, ?o'.::~::ans who .stem less in- terested :n truth than ~n :~,e a..'v.pearanc~ of being on the right side of the right causes. James .4 8lackb:~rr, ~; u ."ore-ear o.rohvstcs =: Wil[- I nd L,.tur:ee L'm~e,s;t) in .t~}e'/ou. O~.t." • : ".t e. ~" ,j ou~' sou I s:u: ".-'ur';-'I pay. u!~.,Ud ~ ¢ ....... ~" ' ( i~;;.,;:d ~: :~o.~ s pOO.',',:V "ibN =°u~s '~'"': q~.: nsP "~ . - ' ~.,,..,,,,,,,,e. :o s~o= 'ms ~.'.~ ~.:. ,.,:eVe./, . ,'--~..,e, .~- Z0#060£0S BATCo document for PFSFC 1 March 1999