Smoking, vaping, cannabis use and gambling can result in serious health and social consequences, including death, especially for those who are prone to addiction.
Despite all the lip service governments spew out about how unhealthy smoking is, or how much they advise responsible gambling and drinking, they have not taken the needed steps to reduce the harm from these products and activities.
Why?
Because governments are addicted to the tax revenues from these products and activities.
Federal and provincial tobacco tax revenues are declining, which is a good thing because, in part, it reflects decreased smoking rates; however, tax revenues remain substantial. Federal and provincial governments cashed in on tobacco tax revenue to the tune of just over $5.7 billion in 2024-25, according to Physicians for a Smoke-Free Canada.
Add to this a $32.5 billion settlement against cigarette makers TI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. to be divided and paid out over decades to provinces, territories, smokers, legal teams and a foundation to fight tobacco-related diseases.
This monumental settlement is principally based on tobacco-related harms to smokers and associated health-care costs to the system.
Canada’s three largest provinces – Ontario, Quebec and British Columbia – will receive a total of $7.1 billion, $6.6 billion and $3.7 billion, respectively.
Despite this settlement being based on tobacco-related health-care costs, there is no legal obligation for provinces or territories to earmark this money for their health-care systems for smoking-prevention programs.
For example, the Manitoba Centre for Health Policy estimated that smoking cost the Manitoba health-care system $244 million in 2020-21 (The Cost of Smoking: a Manitoba Study). During the same period, Manitoba collected $198 million in tobacco tax revenue – revenues that go into general accounts that can be used for anything, including leveraging global budget deficits. This issue was recently highlighted in Healthy Debate – Medical students call for prevention and cessation initiatives with tobacco settlement monies.
A reasonable person would conclude that it’s hypocritical to sue tobacco companies over a product that causes so much harm and continue to allow the sale of the product.
In fact, Canada has a Consumer Protection Act with explicit language that should protect Canadians from harmful products such as tobacco.
Section 3 of the Act reads: The purpose of this Act is to protect the public by addressing or preventing dangers to human health or safety that are posed by consumer products in Canada, including those that circulate within Canada and those that are imported.
However, the devil is in the details. Section 4(2) of the Act reads:
This Act does not apply to a tobacco product as defined in section 2 of the Tobacco and Vaping Products Act, except in respect of
(a) the ignition propensity of that product; and
(b) the devices and parts referred to in that definition
Essentially, if you are harmed because the cigarette or vaping paraphernalia burns you or causes your house to burn down, the act may apply to address the burn or fire hazard. But if you are harmed due to the product itself, say you get lung cancer, the act does not apply.
How convenient. Tobacco sales can continue and taxes can continue to be collected.
This smacks of regulatory capture.
Recently, there has been exponential growth in vaping, the use of e-cigarettes, despite growing evidence about associated harms. “Scientists still have a lot to learn about the short- and long-term health effects of using e-cigarettes,” according to the U.S. Centers for Disease Control and Prevention (CDC).
Why would Canada’s regulatory bodies allow the sale of vaping products before we have assessed health risks? Perhaps because of the $486 million in tax revenue collected in 2023-24. In fact, vaping-related tax revenue is making up for lost tobacco-related revenue from decreased smoking rates. Unfortunately, a good proportion of vapers, 15 per cent, are youth aged 15 to 19.
Next comes tax revenue from cannabis products. Canada has collected $5.4 billion in cannabis taxes since legalization in 2018.
According to Health Canada, the long-term health risks of smoking cannabis may be similar to the risks of smoking tobacco (e.g., chronic lung disease and cancer). Why not only license edibles or oils versus combustible cannabis products?
In 2023-24, gross liquor sales were just under $20 billion, with a net income of approximately $13.5 billion. However, the estimated total cost of alcohol-related harm in Canada was $19.7 billion (2020 estimate). These costs go beyond health care and include lost productivity, criminal justice expenses and other costs.
In fact, alcohol has the highest cost burden to Canadians, with tobacco ($11.2 billion), opioids ($7.1 billion) and cocaine ($4.2 billion) coming in second, third and fourth.
These four addictive substances amount to a staggering total cost of $42 billion!
Last, but not least, is gambling. Canadian gambling revenue has been progressively growing and is expected to have reached $15.59 billion by the end of 2025.
When added together, these potentially addiction-related taxes account for a substantial share of total provincial and territorial ($208 billion in 2023) and federal ($400 billion in 2024) tax revenues.
Some would argue that most adults gamble or consume alcohol responsibly. That the economic benefits, say from provincial lotteries and casinos, outweigh the societal costs.
However, there must be better ways for governments to raise revenue than on the backs of activities in which the risk of societal harm is high, making the economic benefit to society a somewhat perverse argument
Governments are addicted and need an intervention.
