Attention News/Health Editors:

Health Organizations Urge Finance Minister Ralph Goodale to Close Loophole for Roll-your-own Tobacco, Increase Cigarette Taxes

    OTTAWA, Jan. 14 /CNW/ - National health organizations today released a
report to federal Finance Minister Ralph Goodale urging him to close a
loophole that allows roll-your-own tobacco to be taxed at one-third the rate
applied to cigarettes. The organizations also recommended a Canada-wide tax
increase of $5 per carton of 200 cigarettes.
    "Higher tobacco taxes are a highly effective means of reducing smoking,
especially among teenagers, while at the same time increasing government
revenue," says Rob Cunningham, Senior Policy Analyst at the Canadian Cancer
Society. "Implementing the recommended tax increases would reduce the burden
of tobacco-caused disease, including cancer, heart attacks, strokes and
    The tobacco tax recommendations would increase federal government revenue
by an estimated $930 million per year, and even more if GST were counted.
"This new revenue could be of crucial benefit as Minister Goodale considers
possible expenditure cuts and new program priorities in his first budget,"
says Neil Collishaw, Research Director at Physicians for a Smoke-free Canada.
    The health organizations emphasize action is needed on roll-your-own
tobacco, which is taxed at a much lower rate than a comparable quantity of
cigarettes. Tax rates for roll-your-own are based on the outdated notion that
1 g of tobacco is needed to make one cigarette. Tobacco companies have "puffed
up" tobacco so that today as little as 0.45 g is needed to roll one cigarette.
Roll-your-own cigarettes are increasing in popularity due to this tax loophole
and now comprise a significant 11% of the Canadian tobacco market.
    "There is no justifiable reason why roll-your-own tobacco should be taxed
at a lower rate than manufactured cigarettes," says Francis Thompson, Policy
Analyst at the Non-Smokers' Rights Association. "The federal tax on 200
cigarettes is $15.85, but the tax on 100 g of roll-your-own tobacco, enough to
make 200 cigarettes, is only one-third this amount, at $5.40. This loophole
impedes health and revenue objectives and should be closed immediately."

    The health organizations are also recommending :
    -   closing another loophole that allows a product known as "tobacco
        sticks" to be taxed at a lower rate than cigarettes;
    -   ending the income tax deductibility of tobacco advertising and
        promotion expenditures;
    -   increasing the surtax on tobacco manufacturer profits.

    Tobacco use is the leading preventable cause of disease, disability and
death in Canada. Almost 48,000 Canadians die each year because of tobacco
    Youth are among the most likely to benefit from the tax increases. Teens
and pre-teens are among the most price-sensitive smokers, therefore a
significant tax increase on cigarettes would undoubtedly lead to fewer of them
becoming addicted to this deadly product in the first place. The overwhelming
majority of smokers begin as teenagers or pre-teens. Since one-half of all
lifetime regular smokers will die from tobacco-related diseases, the
government has a fundamental responsibility to do all it can to prevent
children from starting to smoke.
    Both the World Bank and World Health Organization recommend high taxes on
cigarettes to help curb consumption. High prices motivate smokers to quit or
reduce the amount they smoke.
    The report, entitled "A Win-Win: Enhancing Public Health and Public
Revenue", is endorsed by the following organizations: Canadian Coalition for
Action on Tobacco, Action on Smoking & Health, Canadian Cancer Society,
Canadian Council for Tobacco Control, Canadian Dental Association, Heart and
Stroke Foundation of Canada, Non-Smokers' Rights Association, Ontario Campaign
for Action on Tobacco, Physicians for a Smoke-free Canada, Coalition
québécoise pour le contrôle du tabac, and The Lung Association.
    The full report is available on-line at http://www.nsra-adnf.ca.

For further information: Francis Thompson, Non-Smokers' Rights 
Association, (613) 230-4211, cell. (613) 355-6532; Rob Cunningham, Canadian 
Cancer Society, (613) 565-2522, ext. 305; Maurice Gingues, Canadian Council 
for Tobacco Control, (613) 567-3050, ext. 329; Neil Collishaw, Physicians for 
a Smoke-free Canada, (613) 233-4878; Louis Gauvin, Coalition québécoise pour 
le contrôle du tabac, (514) 598-5533

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