EVIDENCE

[Recorded by Electronic Apparatus]

Monday, December 9, 1996

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[English]

The Chairman: Order, please.

Good morning, everyone. We have a long day ahead of us. Let me give you an indication of how I see the day unfolding. As you can see on the sheet before you, we have a number of witnesses slated for today - about 16 separate sets of witnesses - and we will probably be adding to that.

We're going to hear the witnesses before us in a moment, and then once our other regular member arrives - Mr. Scott is en route right now - at around 10:30 the chair will put to the committee a proposal respecting how to handle the balance of the witnesses. But I'd just as soon hold that in abeyance until we have the full committee here.

Mr. Hill, is somebody else coming from your caucus this morning as well?

Mr. Hill (Macleod): Not until later on today.

The Chairman: Okay. When we get to Mr. Scott, we'll proceed with the matter of business.

In the meantime, let me remind members of the committee and witnesses - not only the ones before us now, but those who may be in the room who will be heard later today - of the purpose of these hearings.

I say this in the context of the stream of faxes we got during the weekend, in which I got several lectures about democracy, etc. I enjoyed them all, but some of them were really off the point, because anybody who reads this Bible of ours here - the rules of procedure and so on - will find that the purpose of our exercise here today is not to give a forum to witnesses. As important as that may be, this is not, as such, a forum for witnesses. It's a study by the committee. In the course of its study, and in trying to satisfy itself that this is the best possible legislation under the circumstances, the committee has the prerogative of calling witnesses if it so desires. The committee has elected to do exactly that.

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I again put it in that context for both the committee and the witnesses in order that they understand that this is not a place for witnesses to come in feeling they ought to give a three-hour speech. It is a place for witnesses who accepted our request to come in to give us their best advice as to the details of this particular legislation.

Given that we have sixteen sets of witnesses and a half-hour timeframe for each, I give notice to the committee and to the witnesses that I shall use at this meeting what I call a very short gavel. At the end of the half hour, you're done, because in fairness we have to get on to other witnesses. If witnesses have something to say and it doesn't get said, please feel free to fax us any other ideas that you may not have had an opportunity to get off your chest in committee today.

Finally, let me say to members of the committee that given that we have half an hour for each of the witnesses, and given that it's presumed each witness will want to make some opening statement, there will remain less than half an hour for questioning. We have three parties represented here, and

[Translation]

for that, I need the attention of the Bloc Québécois.

[English]

I need your attention for a moment because I'm about to make a suggestion that's going to directly impact on you.

Since each segment lasts half an hour maximum, and since each witness may well have an opening statement, it's going to leave the committee members with less than half an hour for questioning. I'm going to suggest that you authorize the chair to just divvy the time equally, three ways. If there are twenty-four minutes left, you'll get eight each. If there are eighteen left, you'll get six each by party. At the end of that time, I would just cut you off.

Because they are looking at the witnesses most of the time, I ask members who are asking questions to occasionally cast an eye this way. I'll give you a signal if you're running out of time. I will give it in a way that doesn't interrupt your flow too much, but just look in my direction.

Is all that agreed? Is everyone comfortable with that?

Then on your behalf, let me now welcome our first witness. With us from Ontario Place is the general manager, Max Beck.

Good morning, Mr. Beck. Maybe you could introduce your colleague and make a brief statement, and then we have some questions for you.

Mr. Max Beck (General Manager, Ontario Place): I have also brought Bill Boyle. He's from Harbourfront Centre and is a close colleague and ally of ours on the waterfront of Toronto.

Since we started late, I hope this doesn't all come out of our time, Mr. Chair.

The Chairman: You have half an hour.

Mr. Beck: Great, thank you.

Perhaps I could tell you a few things about our relationship with Benson & Hedges, particularly around the Symphony of Fire. We've hosted this event at Ontario Place for ten years, largely without any public complaint whatsoever about the fact that there's a tobacco company sponsoring it. In fact, the largest number of complaints we received this year, to be honest, were from a public constantly wondering why the federal government no longer funded fireworks on Canada Day - which in itself is unfortunate.

Over the past years, we have provided wholesome summer fun and entertainment to roughly 20 million visitors. The waterfront, right from downtown Toronto to Oakville, is full of people. This is the busiest day in the summer for harbour traffic. Virtually every charter boat in the city of Toronto is already booked for this coming summer. There are thousands of reservations made. The beaches are lined, rooftop restaurants are fully booked. Ontario Place and Exhibition Place grounds are full to capacity. There are major traffic jams with this event. Even the Gardiner Expressway grinds to a halt for a few minutes during the middle of the fireworks.

We earn $2 million a year on this event, and we already are doing our advertising and have thousands of seats sold for the event. I think this event is very important to this country in that it brings roughly 750,000 tourists to Toronto each summer. We had the Niagara Institute do a study of the event a few years ago - I can leave you a copy - and they estimated that the total economic impact of this event for Canada is about $61.2 million. There are about 818 jobs at stake; having a job and being able to feed your kids are health issues too, we believe.

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Benson & Hedges provides $5 million to produce and promote this event. Ontario Place puts $150,000 into it, which will give you some idea of the relative balance. We have a couple of other sponsors for the event and they're all in the range of about $100,000 to $150,000 too. So about 90% of the expenditures of this event are provided by Benson & Hedges.

We procured a good deal with Benson & Hedges, but we have to negotiate hard for good deals to survive in these days of government cutbacks. Ontario Place has gone from receiving at one time roughly 60% government subsidy to being down to zero government subsidy this year. We generate $9 million in taxes back to all levels of government, so we think we make a fair contribution.

The federal government's proposed legislation will not only severely impact this event but it will likely have a major negative impact on Ontario Place itself. Ontario Place will no longer have television or radio ads, billboards, bus shelter ads and banners over Lakeshore Boulevard, all advertising vehicles that we use to get those 2 million people to the event each summer and another 2 million visitors to our place itself. We believe the advertising for this event has a spillover on our total summer attendance.

The event will suffer largely through loss of attendance and revenues. The sponsorship with Benson & Hedges is definitely at risk, and we believe all these restrictions to our event will not make an iota of difference in the number of young people who take up smoking. All of our ads are tasteful and not directed at youth or lifestyle advertising.

I brought a videotape, which unfortunately I'm told I'm not able to show to you today. This is a plaque; our poster a few years ago looked like this. We had these up around the province. And for the United States this is one of the ads. I don't think you could call this offensive lifestyle advertising; I hope you can't. This is the advertising we are using this year. Again, I think it's tasteful and I don't think it's lifestyle advertising. This is what we used extensively.

Without that kind of advertising, television ads, without being able to advertise off-site, there is no way you're going to get 2 million people to the event, there's no way we will be able to continue making the contribution we make to the economy. As far as we know - and I did bring lots of copies of this for you - we have a brochure we've distributed to 2 million locations and homes. We've put it in all the tourist brochures; we distribute these widely in the United States and they bring a lot of visitors to this country. I believe we will no longer be able to do this kind of pamphlet, or at least certainly we won't be able to do what we've done in it about Ontario Place.

In regard to the consultation question, I used to work for the Liberal government back in the 1970s, and consultation was the way we did business then. I'm outraged by the sham that we have called consultation on this.

As soon as we saw the blueprint, we wrote to Diane Marleau requesting a meeting. We have what we believe is the biggest sponsorship in Canada. We thought they might have in fact called us, but nobody did. We asked for a meeting, but we did not receive a response from her.

When Mr. Dingwall became the minister, again I immediately wrote to him requesting a meeting. Again, there was no response except that eventually with the assistance of the GTA minister's office I did manage to get a brief meeting with one of Mr. Dingwall's staff. It was very clear from this meeting - which was very late on, mid-summer sometime - that our input was not wanted.

Learning that many of my colleagues were also finding it impossible to get a meeting, we decided to work together to put pressure on the government. In late August I and others across the country formed the Alliance for Sponsorship Freedom and we began to work together to seek meetings with federal members who were prepared to meet with us. We signed up 370 concerned members in just a few weeks. We've had a very good reception from many ministers and members, but most of them seem as frustrated as we are with this particular bill. To be fair, some were supportive of the bill, but I think most we met in the Toronto area for sure were very concerned about this bill.

On October 4 Mr. Dingwall did meet with a small group of us for about 40 minutes. We left the meeting feeling that he and his staff already had their minds made up, but we sent along some suggestions, I think a very thorough set of suggestions, about a compromise position we thought could save our event. That letter was ignored except that we got a very curt response last Friday afternoon, just a few days ago. It was backdated about three weeks, I see, but we just got it Friday.

For almost a year we've been trying to meet with the government to find practical, workable solutions that will deal fairly with both the health issues, which we believe must be addressed, and the critical social and cultural issues. It could have been done and it can still be done. However, throughout this time not a single official from Health Canada has ever met with anyone from my organization. We've never had a meeting despite calls for meetings.

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I want you to know that both Tourism Toronto and the Board of Trade of Metropolitan Toronto are also very opposed to this legislation. In your rush to push it through, I don't think you'll have time to hear from them or to consult with them.

I don't know what the alternatives are, frankly. I think the only thing you can do is send it back for redrafting - in consultation with people like us, we hope - or take out all those restrictions on things about television, newspapers and off-site advertising. I don't believe events the size of this one will be able to survive and make the contribution to the economy we do without being able to use television and other media. I must say, all the Toronto newspapers seem to be opposed to these severe restrictions on sponsorship.

At the end of the day, I think the committee members have to ask themselves what's the primary purpose of the legislation - to restrict the number of youth taking up smoking, which we think is a laudable goal, or to punish the most entrepreneurial of Canada's arts and sporting presenters and major events organizers? I don't think this kind of advertising is directed at youth and makes one iota of difference in terms of whether a young person would take up smoking. My board doesn't believe that.

I hope you'll modify this legislation to let our events survive and flourish. If not, I hope your members will tell me what sort of message I'm going to give to 2 million angry visitors next summer, who are going to be enraged to find out the federal government's been responsible for cancelling the biggest, and clearly one of the best, events held on the Toronto waterfront each summer. What shall I tell the tour boat operators, who already have thousands of bookings? What should I tell our hotel partners, or the restaurants we work with?

We thought the government might have learned from the Harbourfront debacle, but you seem intent on cancelling good events, jobs, tourist attractions and events that attract jobs and generate millions of new revenues and new taxes to the province and to the federal government.

So we hope you'll take another look at this and will somehow be able to expand this legislation so that events like this, which I think have always operated within the best intents of the law and have always tried to make sure our advertising is totally on side, will be able to survive.

Thank you, Mr. Chair.

The Chairman: Before Mr. Boyle speaks, I'll tell you that you have consumed about 9 minutes of your 30. We do want to leave some time for witnesses from all three parties.

I'd encourage you to be brief, Mr. Boyle.

Mr. William Boyle (General Manager and Chief Executive Officer, Harbourfront Centre, Toronto): Thank you, Mr. Chairman. I'll try to be as brief as possible.

I'm the chief executive officer of Harbourfront Centre in Toronto, which is one of Canada's largest centres promoting contemporary Canadian culture. It attracts more than 3 million people each year to celebrate what makes us Canadian.

Eighteen months ago, Harbourfront Centre had a near-death experience when the Minister of Public Works, David Dingwall, eliminated all federal assistance for the federally owned waterfront site. The Toronto and Canadian public spoke loud and clear about the importance of the centre to their lives. Mr. Dingwall's successor negotiated a plan to ensure that our doors would not close. That plan dramatically reduced the federal investment and hugely increased our reliance on private sector sponsorship.

Our volunteer board agreed that we could achieve the goals for the next five years, but now with Bill C-71 our optimism seems to have been premature. The federal plan was based on the continued support of du Maurier Ltd., our corporate partner for more than a dozen years, which provides between $650,000 and $1 million of assistance each year, approximately 35% of our corporate fund-raising total. In 1990 alone they provided $2.8 million, with the approval of the federal government, to renovate and name the federally owned du Maurier Theatre Centre. They've supported it to this day, but that now could end. A theatre that showcases performers from across Canada could be dark.

In addition, our World Stage Festival, which pits the best of Canadian theatre against the best of the world, could vanish.

I'm not an alarmist; I never have been. I'm a realist. The restrictions on sponsorship in Bill C-71 make working with us a bad business decision for tobacco companies. It's not just big organizations like Harbourfront Centre but more than 370 smaller events and activities across Canada as well.

For example, the loss of the du Maurier sponsorship to the Danny Grossman Dance Company in Toronto will precipitate the lay-off of the entire staff for three months next year. This is just one example among hundreds. All these groups would like to have been here today to tell you their stories, but they have not been permitted to speak.

Sponsorship dollars do not grow on trees. Believe me, I've been shaking these trees for more than two decades. The very last apple that ever falls is for contemporary Canadian culture.

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Now we are told our events encourage young people to smoke. I don't buy that, and neither do the Canadian people. Do you really believe that attending a theatre performance at the du Maurier Theatre Centre makes a 15-year-old light up? Not likely.

Health Canada tells us they have data to show this link. Well, where is it? If they had it, they could help sports and arts groups all over North America who have never - and I underline ``never'' - been able to show potential sponsors any link between their name on an event and the sale of their product. Whether it's milk or Coca-Cola - and those are both big sponsors of Harbourfront - the evidence just isn't there.

And let me put one other myth to bed. New sponsors are not lining up to pick up the slack when the tobacco companies depart. If you believe that, you're smoking more than tobacco.

The Minister of Health has an important job to do, and we support him in that role. Where we part ways is on his methods. He says he's not banning sponsorships. We say that's like telling us we can drive the car while taking away the keys and our licence and stripping the engine at the same time.

None of us in the non-profit arts and sports sector can survive in the 1990s without the maximum potential for private sector dollars. Please leave us the freedom to fulfil that potential.

Thank you.

The Chairman: Thank you, Mr. Boyle.

I listened with interest. I hope and I believe that most parts of your presentation are more factual than one particular part that I want to come back to.

You mentioned that people have not been permitted to speak here today. Maybe you could get me a list, because I'm looking at a list, and I want to tell you what's on my list. I'm looking at a list that I had the clerk prepare for me on Saturday of organizations and individuals who had requested to appear before the committee whom we haven't fitted into today's schedule. The list consists of seven or eight. Judging by the phone numbers only, there are three in the Toronto area, the 416 area code. One is an individual and two are what you would call anti-smoking groups.

You may know about some people who were not permitted, in your words, to speak here, but we haven't heard from them, as a committee or as a clerk, at this point in time. So when you make statements like that, be able to support them.

Mr. Boyle: With respect, Mr. Chairman, most of the organizations like my own all across Canada received word of this on Friday afternoon, and they were madly trying to find how to even get to speak. They presumed there would be several days of hearings, not just one on Monday. So for people coming from Vancouver, Halifax, etc., it's very difficult, if you receive word on a Friday afternoon -

The Chairman: Mr. Boyle, we can settle that one for you. If they found out on Friday afternoon and if they were still scrambling to find out how to do it, they didn't read their mail on Thursday, because on Thursday we put out a general release and we went to organizations directly affected with the information as to the timeframe during which we would be hearing witnesses.

With respect, anybody who is in the kind of business you're in shouldn't have trouble finding a number for the House of Commons in Ottawa and tracking down the clerk of the health committee. It's not a difficult proposition.

Mr. Boyle: With respect, Mr. Chairman, these are non-profit arts organizations all across the country. They have very small staff, if any, and they're run by volunteer boards of directors. They're not sophisticated organizations.

The Chairman: Bill, you and I are not going to convince each other, except I wanted to say for the record that as a committee, we are not aware of the armies of people out there that you're talking about who were prevented from appearing before the committee. We have tried to accommodate, and as you'll hear from our brief business session later this morning, we will do some more accommodating.

We want to hear from various people, but I put in context what I said at the beginning of the session. This is not a forum for people. It's important you have a forum. Go out and have a press conference, put out a press release and have your own meeting. This is our meeting, in which we're trying, as a committee, to determine whether or not this is the best legislation. It's in that context that you're here to assist us, not to exorcize what you're upset about with the legislation. We understand you may be upset, but you've chosen the wrong place to vent your feelings.

Before I go to the members of my committee, I want to say one more thing. I heard out the first set of witnesses, but I have to say to witnesses in the room and those who are coming throughout the day that the purpose of the hearings is to allow committee members to pick your brains, and if you sit there and harangue us for 20 minutes, we're not going to have much time to put those questions. I promise not to harangue you much more today either, but I appeal to witnesses to be brief in your statements so that members can have a genuine exchange with you during your half hour.

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[Translation]

I will now give the floor to the Member for Lévis.

Mr. Dubé (Lévis): We will not have a lot of time, but I appreciate the work done by our chairman to try to convince the witnesses of the difficult circumstances the committee had to deal with. Basically, there is one thing that has to be kept in mind. The committee takes its orders from the House and the latter, through the majority vote of the government members, decided that the process would be very short and that there would be only one speaker for each party at second reading. Therefore, that was the decision of the Liberal majority in the House of Commons, and the committee is simply following the orders of the House.

I agree with you that the consultations were sabotaged. However, last Friday the minister met with the committee to talk about sponsorship. In fact, his press release covered only one point. He tried to discredit the figures provided by those bodies responsible for organizing events.

I know that you are non-profit organizations, but in Montreal, the services of a firm by the name of SECOR were used to conduct studies on this issue. Could you table any information today confirming what you told us?

I have taken note of the economic impact of those decisions, and it is considerable. We in the Official Opposition share your opinion that advertising in adult events does not have the effect of increasing smoking among young people. I would like your answer to my question. Do you have such studies? Are you able to provide them to us by this evening at the latest?

[English]

Mr. Beck: As I mentioned, I have a study done by the Niagara Institute. It was done two years so it's a little out of date, but it looks at our event in particular. It's the one that I said mentions that the total economic impact for Canada is $600 million. There are roughly 800 jobs at stake throughout the province, so it's a major impact.

The thing that I think should be of interest to you is that this event draws major numbers of tourists. You don't get tourists by sending out a newsletter or advertising in a local paper. You get tourists by television advertising, by sending things like this down to the States, and by working very hard.

[Translation]

Mr. Dubé: How many jobs?

[English]

Mr. Beck: The total economic impact is $60 million, and 750,000 tourists come to see the event. That generates an awful lot of hotel rooms and meals and brings an awful lot of revenue to the country.

[Translation]

Mr. Dubé: How many jobs are threatened?

[English]

Mr. Beck: About 818 jobs have been identified - this was a couple of years ago, so it would be a bit higher now.

[Translation]

Mr. Dubé: There are two aspects. There is the possibility that tobacco companies could advertize on site, but you also said that publicity would be prohibited on television. Which of these two is the more threatening for you?

[English]

Mr. Beck: I think losing the television would have the most impact. This event is actually simulcast on radio. The only way it works is for thousands and thousands of people to actually hear the music. It is fireworks set to music. It is broadcast on radio and millions of people in their boats and other places pick it up. It gets piped into restaurants. Losing all the billboards and the ability to put up posters like this... I've checked with people in the minister's office since this meeting.

We're fortunate that we're on a major thoroughfare. I asked if we could put up a billboard on our side, our property, but showing onto the Lakeshore so at least people could see it. I was told no, we wouldn't be able to do that, we'd only be able to have small posters on our site looking inwards, not anything that looked out to the main traffic byways. There is no way you get 2 million people to an event just by having some posters on site, a few ads in the paper, and handing out some flyers to people whose names you already know. We do not have the list of 2 million people.

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The Chairman: The member for Macleod.

Mr. Hill (Macleod): Gentlemen, you've both said the advertising you'd be allowed to do would be ineffective and would not attract the people who you have. Do you have specific information in writing that you will lose your sponsorships if this bill goes through?

Mr. Beck: No, I don't have specific information that says I'll lose the sponsorship. And we may not totally lose it. What will happen, though, is it will become less and less valuable as time goes on. The reason the sponsorship is valuable now is because the number of times they get their name out is one of the reasons why they provide you funds. The other thing is how big the event is. If the event has 2 million people, it's worth a lot more money than an event that has 200,000 people. I think what's going to happen is that the event is just going to wither away and we may still have a sponsorship but it will be a very small sponsorship in proportion to the type of event. It will not remain as big.

We have to find another $1 million this year in sponsorships anyway without having to get this hit of $5 million.

Mr. Hill (Macleod): If I could just pick up on your phrase, it's the number of times the company can get its name out that is the reason they sponsor.

Mr. Beck: Yes, very much. The value of the sponsorship is based...we have never denied that there is a benefit to the sponsor. That's why the sponsor pays.

Mr. Hill (Macleod): If you went back to the previous testimony on the bill that preceded this, I'm sure you would find the same argument was used that sponsorship was going to be reduced. Could you make a comment on what has happened since the last act to your sponsorship with these companies?

Mr. Beck: The previous act was actually the best of all possible worlds for us, I think. In fact, the tobacco companies could advertise no other way except through sponsorship. So, frankly, a lot of us took advantage of this and used it to work with companies to build up the sponsorship, whereas now companies will be legally allowed to do some advertising. They'll have virtually the same advertising rights as we have. So that will further erode the benefit of the sponsorship.

Before I assumed the government at least knew what they were doing with that. They said, if this is going to happen, at least make sure some social benefit sticks to this money as it goes through the system. It's worked very well, and we have taken very good advantage of that legislation and made it work in our favour. I think we're been entrepreneurial about that and have made it work.

This bill puts us very far behind, because we have the limitations on ourselves and anything we can do the tobacco companies seem to be able to do on their own without us. So why should they even support us?

Mr. Hill (Macleod): And you are presuming that for your event, which you've said is a great event and attracts lots of people and has a great economic benefit, there is no other sponsor available to you in the event that this sponsorship went away.

Mr. Beck: I wouldn't say there's no other one available, but I don't think there's a hope at all that in even two years or three years I could replace the $5 million. My next largest sponsorship at Ontario Place is General Motors of Canada. It's a large corporation. They give us $250,000. In terms of the banks, which are presumably rolling in money, we have a bank like everybody else and we get about $100,000 to $150,000 from them. There aren't very many people who will step up to the plate and put millions of dollars down to promote an event. The cigarette companies certainly have been prepared to do this.

Mr. Boyle: I would add that in the contemporary arts or culture field across the country it's even more difficult. Fireworks is one thing. To support a theatre or a theatre festival or a dance company is next to impossible. I know we are beating the bushes all the time for sponsors and there are no sponsors we can find that are lining up to help with contemporary arts sponsorship except du Maurier Ltd. It's frankly the only sponsor that is interested in contemporary new dance, theatre, music, etc.

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Mr. Beck: I'm already looking for another $3 million, by the way. The federal government may have it, but apart from whether I get hurt on this, I have to find another $3 million this year.

Mr. Boyle: And Harbourfront has to find an additional $1 million from the private sector.

Mr. Szabo (Mississauga South): I understand your concerns. The tobacco blueprint came out in December 1995, and your primary issue is sponsorship promotion. The blueprint, which is about a year old, recommended restrictions to limit lifestyle appeal while leaving some incentive for sponsorship. The current Tobacco Act proposal with the 10% rule seems to be in the ballpark of what was recommended in the blueprint.

If you concur with that, why would you conclude that this is being somehow rushed or you didn't have a chance to respond?

Mr. Beck: I don't concur with it. We think the government - and we've tried to tell them this but we've not had much of a hearing - should deal with some of the lifestyle issues. I don't think that is a terrible lifestyle ad. I don't think it has a bunch of young people in it, hanging out, encouraging young people to smoke.

I applaud the government in its effort on that. I don't think our organization has ever offended sensibilities around lifestyle advertising. We gave the minister an 8- to 10-page letter that talked about how you might address some of those lifestyle things. I don't think the current legislation totally addresses the lifestyle question.

The big concern for us is why we should be forced to take that ad or not put that poster up around the country or around the province. Why can't I send that thing around? Why can't I attract 2 million people to the fireworks, and another 2 million a year? This poster helps my organization year round, not just then. Why can't I put an ad on television?

Mr. Szabo: I'm sure you're aware of the strategy of the tobacco companies. I'm sure you've considered where their new market is, where their new customers are. I suspect you would agree that they're looking at new smokers, younger smokers, and I think the numbers bear that out.

I'm curious that you have this particular event that you are talking about, a fireworks display, and an exceptional one that I've seen myself, that does attract and is focused on children.

Mr. Beck: Families, for sure.

Mr. Szabo: Families, particularly those with children. Of any event I can think of, this would be the kind of event you would want to be most careful not to associate tobacco with, directly or indirectly. From my perspective, and I don't know how you feel about it, we're treading a fine line here when we suggest to kids that this wonderful event that generates $60 million in benefits is linked to a company that sells a product that could hurt them.

Mr. Beck: I don't get the link. I heard the best response on an open line program that I was on the other day. I heard a young man there - he was in his late twenties - saying that since the age of about six he been a motor sport racing fan, and that for some reason or another he got totally fixated on Rothmans and started collecting every single piece of memorabilia he could get his hands on. Apparently he has a huge collection of Rothmans memorabilia and has been a Rothmans fan and a Rothmans motor sports fan. As he said, if anybody should have been convinced to take up smoking or to smoke Rothmans, it was be him.

He said that when he was 15 years of age, around the time his friends started to smoke, he made his decision about smoking, and for whatever reason, he's a non-smoker. I'm a non-smoker too. I do not believe this event -

My board has talked about this. I think it should be left to businesses and boards to make these decisions. I don't think our board believes that just because the name Benson & Hedges is on there anybody says ``Gee, let's take up smoking'', or because they come to our fireworks, they decide to start smoking.

As Bill says, if I could prove that every time somebody came to Cirque du Soleil they immediately rushed out and bought a Canadian Airlines ticket, we could get tonnes of sponsors. We could pick and choose among sponsors. But we can't seem to prove to any other company that coming to our event means they're going to go out and buy their product tomorrow. So why does it work in this case and only this case?

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Mr. Szabo: My final question has to do with the economics of it. I'm sure that Harbourfront and Ontario Place have for a long time been working at the economics of their operations. You tabled the $60 million figure with us in terms of economic benefits because of jobs, the other spin-offs or ripple effects, etc. When you consider that the cost going in to Benson & Hedges at some $5 million and there is other supplementary funding from government -

Mr. Beck: None from government whatsoever.

Mr. Szabo: Harbourfront does.

You have described to us a function that clearly has a net large economic benefit, and a lot of people, and it's a good thing to be associated with. Please tell me why the hotels, the City of Toronto, Tourism Ontario and similar groups who could get an advantage out of this kind of public relations haven't gone after this funding if it's such a great event?

Mr. Beck: The department I report to is Tourism Ontario, and they are cutting, not increasing, our funding. That's why I'm looking for another $3 million, despite what happens to this.

Governments have to cut nowadays. Governments are in a pressure situation and they're reducing their funding. I don't mind that. We're prepared to go out and raise that money from the private sector. I believe my organization will be fully self-sufficient this year, but I can't do that if the government keeps pulling the rug out from under our feet on some of the legitimate sources that I can currently get funding from.

The Chairman: Mr. Beck, something genuinely puzzles me. You've said very persuasively that this whole business makes no impact on the would-be smoker. We can only extrapolate that the tobacco companies are doing it out of the goodness of their hearts. What makes you think the goodness of their hearts wouldn't continue with the new restrictions?

Mr. Beck: I don't believe they do it out of the goodness of their hearts. Those were not my words. I acknowledge that they get exposure, but there are still 7 million smokers in this country. I believe there is still a genuine and valid fight for brand recognition among those 7 million smokers, and I think this contributes to that, although marginally. They clearly want to get their names out there, and we do facilitate that.

The Chairman: We're out of time. Thank you very much.

While we make the transition to our next set of witnesses, I want to thank members for helping me stay reasonably within time. Members, be careful when you tell me you have a short question. Make it really short, because if we lose a few minutes each time, we're going to be well behind at the end of the day.

Could I have the attention of the committee for a suggestion? I indicated a few minutes ago that we have been able to accommodate most of the people who had indicated a desire to appear before the committee. We've been able to accommodate most, but not quite all. I would like to accommodate as many as we can. If you look at the list before you, you'll see that we've tried to strike a fair balance.

My instruction to our staff on Friday was to recognize not only the anti and pro groups in this debate, but to recognize six or seven stakeholders. The so-called antis would be one, the sponsorship people a second, the corner stores a third, the vending machines another, the tobacco manufacturers as another, and the growers as another. We identified about six stakeholders and have tried to provide a balance among those six. If you look at your list you'll find that balance reflected.

Notwithstanding that, we haven't yet been able to accommodate eight or nine groups or individuals who would like to appear. We've told some of them to be on standby pending your reaction to the suggestion that I'm now going to make to you.

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The committee will be aware that tomorrow we are scheduled to deal with other issues - the final report on the child health study and hearing witnesses on the drug review. My suggestion is that we dispense with the hearings on the drug study and postpone them until after Christmas, and that the child health report be dealt with in a special meeting to be convened this Thursday at 9 a.m. It would probably be a fairly brief meeting of an hour or an hour and a half.

If you agree to those two suggestions, we would do the following insofar as the present hearings are concerned. We would meet until 5:30 p.m. or 6 p.m. this evening, and then recess until tomorrow at 9 a.m. We would hear other witnesses in addition to those on the list before you. We would hear those other witnesses until about 12 p.m. or 1 p.m. or however long it takes to accommodate the remaining witnesses who've indicated a desire to appear, and then early tomorrow afternoon we would go into clause-by-clause analysis of Bill C-71 with a view to finishing it some time tomorrow.

If you're comfortable with all that, I would like a motion to that effect.

Mr. Volpe: I so move.

[Translation]

The Chairman: The Member for Drummond.

Mrs. Picard (Drummond): I am sorry, Mr. Chairman, but are you telling us that the committee will not sit this evening? We were supposed to begin clause-by-clause consideration this evening.

It is postponed until tomorrow afternoon?

[English]

The Chairman: I probably gave it to you too quickly. Let me try one more time.

My suggestion is that in order to rearrange our schedule here, we reassign what we're going to do tomorrow morning. We were going to deal with the child health study tomorrow and the drug review. Let's do the child health study on Thursday morning and postpone the witnesses on drug review until the new year. That clears the deck tomorrow morning to do the following: adjourn at around 6 p.m. this evening, having heard the witnesses on your list, hear other witnesses from 9 a.m. until 1 p.m. tomorrow, depending on when we've completed our group of witnesses, and following that go to clause-by-clause tomorrow afternoon. We would not be sitting tonight. That's the suggestion.

I have a mover in Mr. Volpe. Are you comfortable with that?

Some hon. members: Agreed.

The Chairman: We now welcome witnesses from Grand Prix F1 of Canada to the table. Bienvenue, Mr. Legault. Please introduce your colleague.

Mr. Normand Legault (Chairman and CEO, Grand Prix F1 of Canada Inc.): I'm the president of the organizing committee of the Canadian Grand Prix. With me today is Richard Prieur, who is responsible for the international media coverage of the event.

Mr. Chairman, ladies and gentlemen, members of the committee,

[Translation]

ladies and gentlemen, members of the Committee, good morning.

[English]

Let me thank you for allowing us to appear today to share our concerns on how Bill C-71 might impact a great Canadian tradition, the Canadian Grand Prix car race. The Grand Prix is a legacy of Canada's centennial celebrations in 1967. It has grown to become the largest sports event in our country, attracting 228,000 spectators last June. More than 1,000 volunteers from all over Canada have, through their efforts, made it into one of the oldest and most respected events in the Formula 1 world championship, which comprises only 16 highly coveted races.

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Mr. Chairman our Grand Prix is a lot more than just a sporting event. First, it is a unique opportunity for Canada to reach, year after year, a worldwide television audience surpassed only by the Olympic Games. The 1996 Grand Prix was broadcast in 131 countries around the world, attracting a total television audience of 350 million viewers. Close to 300 foreign journalists were in attendance to witness the event and report for their media on all continents.

The Grand Prix also contributes significantly to Canada's tourism industry. More than 20,000 foreigners attended the event last June, visiting from Asia, Europe and the United States, making it the country's largest tourist event, bigger than the Grey Cup final or any business or trade convention.

According to the Greater Montreal Convention and Tourism Bureau, the Grand Prix generated more than $50 million in direct contributions to the city's economy during the hotels' most profitable week of the year.

In addition to the tourists, the event brings to Canada hundreds of representatives from leading international corporations in the fields of aeronautics, computers and automotive industries, to name a few, furthering trade and investment as by-products of the event.

In the medical field, the Grand Prix has allowed local trauma specialists, working in conjunction with their international counterparts, to develop breakthrough treatments for trauma victims, using cutting-edge technology in telemedicine and airborne patient evacuation, all developed by Canadian corporations whose products have thus benefited from worldwide exposure through this event.

Finally, this race has made it possible for two young Canadian athletes to shine on the world scene and represent our country at the utmost level of professional sport - the late Gilles Villeneuve and his son Jacques, who ranks amongst Canada's greatest ambassadors to the world.

However, Mr. Chairman, all of this might be at risk. We did not come here today to discuss the possible withdrawal of a major event sponsor, such as Players, and it's impact on the Grand Prix, but rather to inform you of another very tangible and most serious threat to this event should Bill C-71 be adopted in its actual form.

Some of the cars competing in the next Grand Prix might be partially sponsored by international tobacco manufacturers, even though most of the brands displayed would not be currently available in Canada. The Minister of Health, answering a question from this committee, has indicated that this form of promotion would not be allowed under Bill C-71.

In light of such restrictions being imposed on the participants, or at least some of them, we expect the international sanctioning bodies to withdraw Canada from the world championship, therefore putting an end to a 30-year tradition of Canadian hospitality to the world.

While we understand and support the objectives of the proposed legislation, we respectfully submit to this committee that considering the numerous benefits derived by our country from the presentation of this event, Bill C-71 be changed so that the threat of the Canadian Grand Prix cancellation be lifted.

Thank you, Mr. Chairman and distinguished members of the committee. Merci.

[Translation]

The Chairman: I will give the floor to Mr. Dubé.

Mr. Dubé: When the minister appeared last Friday, I asked him a number of questions, one of which was very specific. I asked him, because he had been quite evasive until then, whether it would be possible to put the name of a brand of cigarettes on a car. He said it would not. What do you think of that?

Mr. Legault: That is the reason for our concern this morning. Since, of the 26 participants in the Grand Prix, there might be about 10 with the names of cigarette brands on their cars. These are primarily foreign brands, including Japanese. With such a prohibition, they would not be able to take part in the Grand Prix. Since this is a world championship, where every stage counts in winning the title, that would mean that the race could not be used for championship purposes.

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Mr. Dubé: I imagine that you heard the Minister's response on Friday. He said that the Formula 1 Grand Prix races in France, England, Germany, etc. - he mentioned them all, had prohibited that, and it didn't cause any problems. What would you answer in that regard?

Mr. Legault: Well, it's important to ensure that the examples you use are similar. In the case of France, for example, with the implementation of the Évin legislation, this kind of advertising is prohibited. The reason why the international Federation did not withdraw this race from the championship is that very many French industrial groups participate in it. I would mention here, for example, the Renault group, the Peugeot-Talbot-Citroën group and the petroleum group Elf Antar France which by themselves contribute more to research and financing involved in Formula 1 races than all the tobacco companies put together.

In the case of Germany, the situation is similar with the Mercedes-Benz AG company, which is a division of the Daimler-Benz AG group. It is this company which, if I may use the expression, gets some of the participants on the track.

In the specific case of the United Kingdom, approximately 80% of the teams taking part in the world championship are based in the United Kingdom, north of London, which is a kind of silicone valley or centre for high tech research in the area of automobile development. As a result, it would be almost unthinkable for these teams not to participate in the British Grand Prix.

There's one case which, I think, is comparable to Canada, namely that of Australia where, following the introduction of the Tobacco Advertising Prohibition Act in 1992, the Australian Minister of Health decided to issue certain exemptions for international events considered important to the Commonwealth and Australia. For example, the exemption applies to the Australian Grand Prix, but also to the Americas Cup, which the Australians won. For the event to take place in Australia, such an exemption had to be provided. This was also the case with a women's professional golf tournament.

These are very specific exemptions.

Mr. Dubé: I don't want to cause dissension between you and other people, but if the federal government allowed the same type of exemptions for the Grand Prix, what would your opinion be?

Mr. Legault: At least, we could then stage the event and try to meet the funding challenge posed as a result of Bill C-71. At the present time, we cannot meet the challenge since the staging of the whole event would be jeopardized.

Mr. Dubé: If you were obliged to change the name of the event, would your main sponsor continue to support you or would they abandon you?

Mr. Legault: If we were to change the name of the event? I cannot speak for the sponsor or his intent, but obviously the monetary support provided to us would be significantly reduced and we would have to try and replace it by some other source.

[English]

The Chairman: Mr. Hill, from the riding of Macleod.

Mr. Hill (Macleod): Thank you, gentlemen, for appearing today.

Just to give you a bit of background, this is a subject of great interest to me. I'm a race car driver myself and have competed on the international level. With respect to your comments about the three countries that have shut down sponsorship...because I follow this so closely, I watch the wings on the cars and I see that Marlboro is gone in the countries you have mentioned. And you're saying to me that because those countries are much more intimately involved in motor sport that they will continue on and Canada will drop off the face of the earth in relationship to this. Are you saying to me that your sponsors will leave you?

Mr. Legault: The event sponsors?

Mr. Hill (Macleod): Yes.

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Mr. Legault: Based on the regulations that are to be published, based on the role they might play, I can't presume they would leave entirely. There might be a role for them to play, albeit a somewhat diminished role, in the promotion of the event.

Mr. Hill (Macleod): You're presuming now, I guess?

Mr. Legault: Yes, I am, sir.

Mr. Hill (Macleod): You have nothing from the companies involved that says if Bill C-71 goes through, forget the Formula 1.

Mr. Legault: Right. Our concern this morning, sir, is more with the team sponsors rather than our sponsors, because we as organizers have no say in what appears or does not appear on the cars. That is left to the international sanctioning bodies.

Mr. Hill (Macleod): I'm sure you know, since you follow this as closely as I, that when events transgress boundaries, such as the significant rally that goes from country to country, in countries where sponsorship is banned, they cover up the sponsorship decals. They cover the decal on the driver's uniform and replace it with something different. What does that do to the overall event? There is a worldwide move towards doing what Canada is doing, and I think you know that.

Mr. Legault: Yes, I do. We have been led to believe that of the two races that will be held in Germany next year, for the 1997 season, the one at the Nürburgring circuit should allow the Formula 1 cars to have tobacco sponsorship, but not the one in Hockenheim, in a different part of the country.

To answer your question on rallies, the situation of Formula 1 racing is more a question of supply and demand. The rallies to which you were referring, such as the Paris-Dakar, for instance, cannot go around some of those countries if they are to preserve the essence of their event.

In the case of Formula 1 racing, being limited to 16 or 17 races per year, there are currently five or six countries that are on what I might call a waiting list, applying for the privilege of presenting such an event. This gives the international federation some choice, if I may say. I believe that is a very different situation from what you are suggesting.

Mr. Hill (Macleod): To finish up, do you believe Canada will lose the Formula 1 Grand Prix race if this legislation goes through?

Mr. Legault: Yes, I do, very strongly.

The Chairman: Harb.

Mr. Dhaliwal (Vancouver South): I want to thank both of you gentlemen for being here today.

One of the concerns that many members have, including me, is what will happen to many of the events like yours and to other events such as the jazz festival, the film festival and all sorts of events.

As someone originally from the business community before I got elected, the decision I often had to make was on whether or not we should sponsor some events. As was said earlier by the speakers, sometimes you don't know, as someone who's sponsoring an event or getting involved, how much revenue benefit there will be to the company. So some of the decisions you make as a sponsor or as someone who wants to support an event are based on your view of the event. If it's a good event, you'll support it. Is that not correct?

Mr. Legault: Yes.

Mr. Dhaliwal: That's what my experience has been, as someone who's had to make decisions on whether or not we want to sponsor, get involved or participate in some way in the event.

I would think a lot of the tobacco industries make the decision in the same way: they support the event because they really are supportive of the type of event. They think it's a good event and they can be there.

Don't you think they'll continue to sponsor and support these events that they feel are good events? That's why they're there, not particularly because they feel this is going to add to their bottom line or add to their revenue, but simply because they pick a few key events. Obviously they can't support every event out there, but they pick a few key events that they support and will continue to support.

Based on that type of decision-making process, do you not think they'll continue to support your event and other events they sponsor?

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Mr. Legault: Yes. We like to think of our event as a quality event, as a good contribution to our local economy. We like to think there would still be support for us from our event sponsors. However, as I mentioned in our presentation, a very direct threat, as we speak now, is the event not even taking place at all. That decision is out of our hands, resting instead with the international automobile federation and the Formula One Constructors Association, the international bodies who sanction and govern that sport.

That is the key area for us this morning. If the event is not allowed to take place, or can't take place, the best intentions from our sponsors will be lost, sir.

Mr. Dhaliwal: Just to move that aside, if the event does take place, do you feel you'll continue to get support and sponsorship from the tobacco industry?

Mr. Legault: We could expect some form of continued support, albeit significantly reduced.

Mr. Dhaliwal: Okay. Thank you, Mr. Chairman.

The Chairman: Since no other persons wish to intervene, I want to thank the witnesses for coming.

[Translation]

Mr. Patenaude, would you please introduce your colleagues.

Mr. Pierre Patenaude (Secretary, REDAC): My name is Pierre Patenaude and I am accompanied today by Mr. Michel Bouliane and Mr. André Pichette, the President of the association, who will speak on behalf of the association. I will therefore give the floor to Mr. Bouliane. He will no doubt be better able to represent us.

[English]

The Chairman: Before you do that, Pierre, in terms of the name of the organization, REDAC is the acronym. What does that stand for?

[Translation]

Mr. Michel Bouliane (Advisor, Regroupement des exploitants de distributrices automatiques de cigarettes (REDAC)): REDAC is a bona fide type of association representing the operators of automatic cigarette vending machines. Since we made our initial representations, there has been a change and today we are no longer operators of automatic vending machines but rather operators of cigarette vending machines.

As you will remember, in 1994 at the time of the first bill concerning tobacco sales to young people, a clause was introduced restricting our machines to bars where at least 80% of the revenue came from the sale of alcoholic drinks and imposing certain limits on the installation of such machines. At the time, we made representations to the department, suggesting that our vending machines no longer be automatic; rather, they would be sales points controlled by the people operating the particular establishments.

We received letters from the department telling us that the ``legislation does not apply to you because your machines have been changed and are no longer automatic''. I shall try to explain the situation here.

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The machine is placed in a specific location, within view of the person operating the establishment, and if someone wants to obtain a tobacco product he or she must speak to the person behind the counter and identify himself. Once that has been done, the customer goes to the machine and makes his selection. The operator then activates the machine, which provides one packet, and no more than one, of cigarettes. Therefore, there is both a visual and manual control system.

It's rather as if there were a cupboard which, instead of being located at the official sales point, was placed in front of it or on the other side. The advantage for the operator is that he or she does not have to keep any accounts. They provide the service to a customer, but do not have to keep any accounts or other such controls. Also, this removes any danger of robbery.

This has been accepted and our members - who provide almost 2,000 jobs in Quebec - have at great cost changed most of the machines in approximately 60 businesses. The machines have now become non-automatic sales distribution points.

We find clause 12 of the bill puzzling. The clause in question reads as follows:

12. No person shall furnish or permit the furnishing of a tobacco product by means of a device that dispenses tobacco products except where the device is in a place to which the public does not normally have access.

We are dealing with something of a tautology. If the public does not have access to the place, there is no reason to have vending devices. Was the purpose to prohibit them? I don't think that that was the purpose of the legislation, since the legislation never contains anything that is meaningless.

The intention of the legislation is to enable vending machines to exist. However, they have to be accessible to the public, controlled by the manager of the establishment, be it a restaurant, a bar, a hotel, a convenience store or anything else.

We would venture to suggest that perhaps the people responsible for the legislation were not aware of the discussions which took place between the inspectors who consulted the legal services of the department and concluded that there was no problems as regards the legislation itself. This change was implemented over a period of two years.

I don't know if there are still some of the old kind around today, but in Quebec the majority of vending machines, except in the case of those located in bars to which minors do not have access in any event, are equipped with a remote control system. Control of the machines is delegated, so to speak. The owner of the establishment has the machine in front of him, rather than behind him and he controls access to it. There is no advertising on the majority of these machines, except the names enabling the customer to make a choice, and such names are indicated very discreetly.

We consider that the proposed legislation, as drafted, is very discriminatory towards our members. We are not encouraging consumption; however, if the people concerned allow someone to have access to a cigarette, they will be taxed and punished because they can be charged with an offence, which is not the case in a drugstore, where people can purchase cigarettes, since it seems that that will be allowed. It's not in the interest of the people concerned to promote sales through such machines, and they don't receive any tips.

We believe that the impact of the proposed legislation, as currently drafted, is far too great. In the case of these vending machines, a sledgehammer is being used to kill a fly. I'm not arguing that smoking is comparable to a fly; it is not harmless. We are not against the spirit of the legislation. However, we are not going to regulate and control highway accidents or deaths by controlling the sale of gasoline.

With the changes we have made, it will be possible for a regulation to recognize this delegation on behalf of the owner of an establishment. There would be a machine under his control or the control of an employee, and no minor or even adults... If the employee is not there, no one can have access to the machine. It can be locked. No one has access to the vending machine.

If you tell me that a ``vending machine'' does not include non-automatic machines, that's fine. If the legislation states that, we will continue on our merry way. We will continue to change our machines, and they will be perfectly controlled.

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In some cases, a ban on smoking is in itself a sufficient deterrent. We have to distinguish between that and difficult access. We have no problem in that regard, because that is the change that we made. What is the point in putting a dispensing device, even one which is controlled, in a place to which the public does not have access? People are not going to hide the dispensing devices in the kitchens, in cupboards or in the cloakroom. That would serve no purpose and would not reduce sales.

The operators pay taxes and the system is controlled. By overly limiting the access, you are going to promote the parallel or underground market, that is the unlawful trade in tobacco on which no taxes are collected.

In conclusion, I would stress that there's discrimination here in comparison with other people who are able to dispense cigarettes but have no better system of control. There is no better system of control. Ours is as effective, if not more effective than the others.

Mr. Patenaude, I have concluded. Would you like to add something?

Mr. Patenaude: I would perhaps like to add that all our members are asking for is to have the same rights as drugstores or even convenience store owners, who must themselves comply with the law regarding consumption by young people. We have the same devices, as Mr. Bouliane pointed out, and they are probably even more effective because convenience store and drugstore owners do in fact make profits, whereas our vendors who use such controls do so simply to provide a service. They will certainly not run the risk of being fined.

It is not in their interest to sell cigarettes to minors, and it's easy for them to ask for ID or other pieces of information. I am therefore asking to have the same rights as Mr. Jean Coutu or even convenience store owners. That's all I wanted to add. Thank you.

Mr. Bouliane: We are available to answer any questions you may have, Mr. Chairman.

The Chairman: Mrs. Picard.

Mrs. Picard: Good morning and welcome to the committee. You said earlier that when the bill regulating tobacco sales was adopted, you made representations to the minister and the minister...

[Inaudible]... the concept of dispensing devices.

I would like to ask you three questions and I will give you time to answer. First, are your dispensing devices only in bars? In which year did the minister accept the concept of your dispensing devices? That was really related to the strengthening of the legislation.

I agree with you somewhat as regards difficult access. The current bill seeks to exclude you from such bars, whereas the legislation is not strengthened in the case of restaurants or convenience stores which still sell cigarettes to young people under the age of 18. Therefore, I agree with you and would like to have your opinion on that.

Mr. Bouliane: First, as regards the 1994 bill, which I have here in front of me, and which regulated access of young people, we did submit a brief. That is the problem with legislation. When you seek to do something, often you go too far and do not need all that.

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Sales were allowed in bars. I'm a specialist in the area of alcohol, as a lawyer and not as a consumer. I represent a large number of bar owners. I told them that it made no sense because, in order to be considered as a bar or tavern to which minors do not have access, there was a requirement: cigarettes could be sold in those locations so long as 80% of the revenue came from the sale of alcoholic beverages. That is ridiculous. Most of the bars are restaurant-bars, and 75% of their sales come from food.

In bars which serve food, up to 30% of the sales can come from food. These are bars where you can lunch at noon, such as the Beaver Club, which is considered to be a bar. You have such establishments here in Ottawa.

It made no sense. They were giving something with one hand and taking it away with the other, by requiring the owners to ensure that 80% of their revenue came from the sale of alcoholic beverages. Whether such beverages represent 10, 50 or 100% of sales, minors still do not have the right to go into them. Someone does not change his or her age or be allowed access to a bar simply because it sells food.

That was the first point. In 1995, we and other groups received a letter from the tobacco product units. I'll provide you with a copy. All our members received that letter, and following that we made our recommendations.

The letter stated that subsections 5.1, 5.2 and 5.3 of the Tobacco Sales to Young Persons Act described the conditions governing the use of dispensing devices. In order to clarify the situation regarding the conversion of tobacco products dispensing devices located in public places - and in this case they were talking about any public place not just bars - we said that the position of Health Canada was that the use of devices requiring the intervention of an employee of the establishment did not infringe on the legislation because such devices were no longer fully automatic. As there is a human intervention, it is possible to check the age of the customer. We said that such devices should be changed or placed in a location out of reach of the consumer so that he or she could not use them directly. When we said ``out of reach'' we meant ``personal reach''.

Therefore, we changed the devices over the last two years. however, clause 12 seems to be telling us now that we have not done our job or controlled the situation properly, which is completely untrue because we have not committed any offences since that time. The only offence committed was when some of our members in more isolated areas forgot to make the change or did not do so quickly enough. We cannot withdraw all these machines; they have to be taken to a plant and the changes made.

The third point which you raised concerned access. As you know, it was specified that in restaurants the device would have to be located at least 10 metres from a place where someone may be eating. Therefore, it would have to be the entrance area. It would have to be visible to the employee.

As a result, whether in bars or elsewhere, there are some places where this cannot be done. But this is no longer a dispensing device within the meaning of the legislation. The legislation does not contain a definition of ``dispensing device''. Perhaps it should have stated that if there is a human intervention or control by the establishment, that does not apply. We would support that.

Mr. Dubé: How much did it cost all your members to make the necessary changes to comply with the old Act?

Mr. Bouliane: We estimate that the change cost at least $200 for each device. I'm not including here losses incurred during the time needed to make the change. There were no sales during that time. The change was made gradually because when you have 200 devices installed, nobody has another 300 in reserve.

Mr. Dubé: How much does a dispensing device cost?

Mr. Patenaude: Approximately $1500, not including the changes that were made.

Mr. Dubé: Therefore, $1500 plus $200. Thank you.

The Chairman: Thank you, Mr. Dubé.

[English]

Mr. Hill, do you have any questions?

[Translation]

Mr. Hill (Macleod): That is absolutely clear.

Mr. Bouliane: Anything which is well thought out can be clearly stated, and it's easy to find the right terms. If you want to make that distinction, I have no objection. It is not clear because they use the term ``dispensing device''. If they had used the term ``automatic dispensing device'', I would say that it did not affect us.

Mr. Hill (Macleod): Might a clarification be needed?

Mr. Bouliane: A clarification to ensure that devices requiring human intervention are not affected. I'm talking here about human intervention by the operator, the owner of the establishment, who can carry out the necessary checks.

Mr. Hill (Macleod): Have you discussed this issue with the Department of Health?

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Mr. Bouliane: We have had one discussion and an exchange of correspondence. We were satisfied and everything was working well. With this bill, this is the first time that we have seen that a dispensing device must be in a location not accessible to the public. If they had told us that the ``dispensing device'' did not refer to those devices where distribution is controlled by the owner of the establishment, we would be satisfied.

Mr. Hill (Macleod): How many such devices are affected by this?

Mr. Bouliane: This affects all of our devices. How many dispensing devices are there in Quebec?

Mr. Patenaude: Certainly between 1600 and 2500.

Mr. Bouliane: Approximately 2000.

Mr. Patenaude: Just in Quebec.

Mr. Hill (Macleod): And in the other provinces?

Mr. Patenaude: We don't know. I think we were the only province to make these changes. I don't know what happened in the other provinces.

[English]

The Chairman: Thank you very much, Mr. Hill.

Mr. Szabo, do you have a question?

Mr. Szabo: Monsieur Bouliane, aside from the vending machine concerns that you have, have you an opinion as to the importance of the issue before the committee with regard to the health impacts of tobacco consumption, particularly by youth? Do you have any opinion whatsoever with regard to the importance of the severity of the problem?

[Translation]

Mr. Bouliane: When we made our representations, two years ago, we said that we were not against the legislation. We were in favour of freedom of consumption and controls, that was when we made our proposal. The majority of our members are in favour of freedom and in favour of controls, but not controls which are so coercive as to completely prohibit access. In that case, we're no longer talking about controls, but prohibition.

Therefore, if the purpose of the legislation was to completely ban the use of tobacco products, the legislation would be different. It seeks to make people aware of the dangers of tobacco. However, it does not seek to remove their freedom from them.

The proposal we made, which we are making today and which we implemented in the past, was totally consistent with that approach. We believe that our products provide better control because, in an establishment, even behind a counter, it is easy to steal cigarettes. There are not many cases of dispensing machines, which are locked with a key, being broken into or taken away, primarily because there are only very small quantities of tobacco products contained in them.

Therefore, the deterrent effect,

[English]

the deterrent effect,

[Translation]

is far greater in the case of dispensing devices than it is for service behind a counter, and even employees who do not receive tips cannot obtain any advantage from this. Neither the employees nor the owner can obtain any advantage from this system. All they want is not to have to deal with cigarettes.

The customer has to stand up, identify himself and give his money to the employee who activates the system. It is far more difficult than purchasing cigarettes at the counter, than asking: A package of du Maurier, please.

[English]

Mr. Szabo: Can you give me an idea of what has happened to the cigarette vending machine business in view of the move towards controls and locking and devices to make them accessible to someone who wants to use them? Can you give me an idea of the number of machines and whether the number of those machines is going up or down?

[Translation]

Mr. Bouliane: We believe they'll be reduced by half.

[English]

Mr. Szabo: Did you say the number has been cut by half?

[Translation]

Mr. Bouliane: Yes, at a rate of -

[English]

Mr. Szabo: By whom?

[Translation]

Mr. Bouliane: By the owners of establishments. For example, for someone who could install one in a bar, there was no problem. Anyone wishing to install one in a restaurant first had to find a location 15 metres from any place where food was consumed. Second, it had to be visible at all times. Therefore, he would say that there was no room. If I cannot put it where I placed it before, near the washrooms, in the dining room or entrance area, I will not do so. There are physical restrictions preventing that from being done in many cases.

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[English]

Mr. Szabo: So they have been going down even before this legislation. I would just ask you that given that one of the major intents of the legislation is to make sure people under the age of 18 don't have access and that those who want to purchase will have to prove their age if there's some question, how do you propose vending machines could be set up and structured so that same level or threshold of care or control can be exercised with regard to vending machines?

[Translation]

Mr. Bouliane: You have to make a comparison here. Take the two systems which exist at the present time. Someone who wants a packet of cigarettes must purchase it at a counter, or some other such place. He is obliged to do that; he has no choice. Therefore, if he cannot purchase his packet there, he will go and get them from a machine. Don't forget that the clause I'm criticizing comes under the part entitled ``Access''. That is very important.

We have to consider whether what we are actually doing at the present time provides more access. That is not the case. I would argue that cigarettes are at least as unaccessible, if not less accessible. A service is being provided to people wishing to use it, but in the case of young people cigarettes are less accessible because anyone wishing to purchase them must identify himself. If you buy cigarettes at a convenience store, the purchase is carried out very quickly because there are ten people waiting in line. Half the time, no one asks for i.d. In this case, you must identify yourself and then the employee asks you for the money. There are a number of steps in the operation. Subsequently the employee ensures that you go to the machine and he or she activates it.

A series of procedures have been introduced making access more difficult for young people. This clause comes under ``Access''. Therefore, the purpose is to limit access, particularly access by young people. That is the purpose of this requirement.

[English]

Mr. Szabo: I have one last question, Mr. Chairman. I read that basically clause 12 of part II is actually prohibiting vending machine sales, actively prohibiting vending machine sales, and that the exceptions here basically refer to those kinds of distributions that would allow others who are in a commercial setting to have access to cigarettes to sell to another third party.

Mr. Richard Prieur (Director, Communications, Grand Prix F1 of Canada): Access to an employee.

Mr. Szabo: Right. But it is prohibition of vending machine sales directly to the public.

Mr. Prieur: No...let's say, in a place where the public doesn't have normal access.

Mr. Szabo: That's right. So it's restricting or prohibiting -

Mr. Prieur: It's not a total... There's a restriction.

Mr. Szabo: Well, maybe that's something we'll have to get clarified, Mr. Chairman, but it appears to me in the reading of it that the section in fact is prohibiting vending machine sales directly to the public.

Mr. Prieur: Where the public would have access in their definition...it comes down to a simple definition. What is a vending machine? Do we fall into that category? I think it should be precise.

Mr. Szabo: Agreed.

[Translation]

The Chairman: One short question from Mr. Dubé.

Mr. Dubé: I would like to ask the witness to table the correspondence he received from the department, and particularly the response by the department regarding the changes made two years ago.

[English]

The Chairman: Yes, we can agree to your suggestion - not as an appendix, but maybe we'll designate it as an exhibit.

Mr. Prieur: Mr. Chairman, do you want that letter today?

The Chairman: Yes.

Mr. Prieur: I can find any...not the request we made but the letter we received.

[Translation]

The Chairman: I'd like to thank the witnesses.

[English]

Mr. Prieur: Thank you very much, Mr. Chairman.

[Translation]

The Chairman: Thank you.

.1140

[English]

I would invite now the group of witnesses from the Canadian Council on Smoking and Health. Dr. Ron Stewart is here. He's the vice-president of public affairs.

Welcome, Dr. Stewart. Maybe you would be so kind as to introduce your colleagues at the table and give us a brief statement, but leave us some time to question you.

Dr. Ron Stewart (Vice-President, Public Affairs, Canadian Council on Smoking and Health): Thank you very much, Mr. Chairman. My name is Ron Stewart, and I am the volunteer vice-president of public affairs for the Canadian Council on Smoking and Health. I'm also a physician and a former minister of health for the province of Nova Scotia and current member of the general assembly there.

With me today is Mr. David Hill, a volunteer past president of the council and a prominent Ottawa lawyer; Ms Janice Forsythe, executive director of the council; and Dr. Pierre Fortin, who is a professor of economics at l'Université du Québec à Montréal and a past president of the Canadian Economics Association, among other honours, and I am delighted to welcome him.

We have a short presentation today, and we will then be pleased to respond to your questions.

Specifically, we are here to extend our support and that of our member organizations and volunteers throughout Canada for Bill C-71. A list of our member organizations has been submitted to the clerk and includes such organizations as the Heart and Stroke Foundation of Canada and the Canadian Lung Association.

We believe this bill is a generally successful attempt at regulating a product that through an accident of history is legal but is responsible for significant rates of death and disability in our country. We also wholeheartedly support Health Minister Dingwall's plan to fast-track this bill, given that we have already had a delay of over one year since the Tobacco Products Control Act was almost entirely struck down.

Ladies and gentlemen of the committee, we cannot afford to allow our youth to go unprotected any longer from the marketing efforts of tobacco manufacturers. We therefore urge you to move quickly and decisively on this piece of legislation.

The tobacco industry would have us believe that there is no proof that tobacco is addictive, no proof that tobacco really disables and kills its users. They say that advertising has nothing to do with getting children started smoking. We are here to present a mountain of evidence obtained from the National Clearinghouse on Tobacco and Health that proves otherwise.

Ladies and gentlemen of the committee, how much more evidence would any government need to take concerted action? Health Minister Dingwall is right when he says none. We need no more evidence. We need no further proof. The over 200 documents, approximately 10,000 pages, we are submitting to the committee today represent but some of the tobacco-related studies, reports, research work and other information that support the underlying spirit of Bill C-71. These documents speak directly to the issue of the tobacco epidemic in our country.

We are submitting them to the committee, you'll be pleased to know, not as background information to be read immediately but rather to support our specific presentation, and also as background to the tobacco control issue in general and for use in any future court case the tobacco industry may well bring against the government.

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We have also submitted to the clerk a list of the documents for your reference. I would now ask Mr. David Hill to continue our presentation.

Mr. David Hill (Canadian Council on Smoking and Health): Thank you, Dr. Stewart.

Mr. Chair, members of the committee, the Canadian Council on Smoking and Health would also like to go on record today with some proposed amendments to Bill C-71. We saw the Tobacco Products Control Act and we saw just how creative the tobacco industry can be in capitalizing on loopholes or legislative flaws. We learned a great deal from that process and we urge you not to let history repeat itself.

The specific wording for our suggested amendments is being submitted to the committee in a document from the Canadian Cancer Society, the Heart and Stroke Foundation of Canada, the Canadian Lung Association, the Non-Smokers' Rights Association, and our organization. The Canadian Cancer Society and the Non-Smokers' Rights Association are scheduled to appear before your committee later today and can also address amendments.

Briefly, the main clauses we feel need to be strengthened include, in dealing with sponsorship, clause 24, the ability to place a ceiling on sponsorship expenditures and promotion; in reference to clause 25, delimit facilities named after tobacco products to those in existence as of December 2; and in clause 2 of the bill, include colour in the definition of brand element.

In terms of regulatory authority, dealt with in subclauses 15(1) and 15(2), we believe the bill should enhance the regulatory authority to provide messages on tobacco packages such as an advice for quitting or a toll-free quit line number. Also, in regard to paragraph 17(a), it should enhance the regulatory authority to control the messages placed on packages by the industry itself.

In reference to clause 22, in terms of lifestyle advertising the bill should enhance the government's authority to prevent the tobacco industry from advertising the intangible image characteristics of tobacco products created as a result of tobacco company advertising and promotion campaigns.

The industry should be required to have its messages about characteristics pertain only to the tangible, physical attributes of the product. This would strengthen Bill C-71 by removing an avenue to advertise what essentially are lifestyle connotations. Making changes to these clauses of Bill C-71 will assuredly increase its effectiveness and significantly reduce the possibility of flaws in the legislation that could be used to the industry's advantage.

To conclude our presentation, I will turn the microphone over to Professor Fortin.

Professor Pierre Fortin (Department of Economics, Université du Québec à Montréal): Thank you very much. I've been asked by the council to join them in this presentation because my grandfather was a doctor, my father was a doctor, my brother is a doctor, and so it's my natural milieu, so to speak.

I'm here to essentially give you a reasonable answer to the question of how many jobs would a 20% reduction in smoking over the next 10 years destroy and create in Canada. The answer to this is that given we currently have about 53,000 jobs in Canada related to the tobacco industry, directly and indirectly, a reduction of 20% would mean 10,000 jobs less in Canada in that sector and related industries, including retail for example, over the next 10 years.

There would be a redirection of purchasing power of the consumer who would no longer smoke to other sectors of the economy, and therefore the right question on the other side is how many jobs would be created by this redirection of purchasing power to other sectors. The answer you get from using Statistics Canada's inter-industry matrix table is that 18,000 jobs would be created. In other words, we would have 10,000 jobs disappearing in the tobacco industry and 18,000 created in the rest of the economy once the purchasing power was redirected by the consumer.

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The reason for that big net job creation of almost 8,000 jobs is essentially that when you spend $1 on tobacco, 62¢ goes into taxes and there's only 38¢ of value-added, whereas if you spend that on other goods and services there's only 25¢ of taxes and you have 75¢ of value-added. In this way you will create a lot more jobs for the Canadian economy than you will destroy.

The last point I want to make here is that of course in this process of redirection of purchasing power governments would lose money, in the sense that if people smoke less they will pay less tobacco taxes. Therefore you wonder how governments are going to finance that.

There are two sources. The first source is that over half of that will be economized by provincial governments in savings in the health sector. The second source would be that given, as the Royal Bank recently issued as a statement, that the fact that we've cleaned up our finances over the last three or four years will create a huge fiscal dividend or the capacity by governments to reduce taxes in the next ten years, that could be absorbed into that fiscal dividend. In other words, government will be able to afford losing something like $300 million across the provinces and at the federal level over those years.

My conclusion is that 20% of tobacco consumption reduction would be a net creator of jobs. Secondly, it would be absorbed financially by lower costs in the health industry and also by tax reductions governments will be able to afford, given that they have cleaned up the public finances, or they are in the process of doing so.

The Chairman: Thank you. We now go to questions from members of the committee.

[Translation]

Mr. Dubé.

Mr. Dubé: Mr. Chairman, first I would like to point out that the Official Opposition, that is the Bloc Québécois, voted in favour of the bill at second reading because what was involved was simply the acceptance of the principle and objectives of the proposed legislation. In that, we were in agreement with the government.

At this stage, our opposition concerns sponsorship. I have read many studies showing the harm done by tobacco.

As regards sponsorship, I questioned the Minister last Friday. I asked him: ``Have you carried out a study, at least one, which scientifically shows that there is a real link between the advertising of a cigarette brand in a sponsored event and an increase in smoking?'' The Minister was unable to answer. I will now ask you the same question. Do you have any documents or a study indicating to me whether such a link exists? I think you have clearly understood the question.

[English]

Dr. Stewart: Thank you very much for that question, which I think is pertinent and also runs very deep in the issue.

One deals with behavioural or social sciences, because addiction is a behavioural problem and we must look at the total science that lies behind particular addictions. There is plenty of scientific evidence on what can influence the addiction of a particular individual. There also are some significant studies that suggest the relationship between the creation of a social milieu, a social acceptance of an addiction, which is what we're really speaking about when we talk about sponsorships...we're talking about the normalization of an addiction. There are studies, some of which we have included, that will point in that direction.

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But one must ask oneself the question, if indeed advertising and sponsorships do nothing or very little to influence behaviour, why in the world is an industry spending millions upon millions of dollars to sponsor and in fact to influence behaviour? If, as some of them will say, they are good corporate citizens, then I invite them to sponsor, but without their influential logos and colours. When one suggests that, one sees the true writing on the wall.

So yes, there is scientific evidence in the behavioural sciences to suggest that indeed, once you create a normalization of addiction, it becomes an increased choice or an increased incidence within the population.

[Translation]

Mr. Dubé: I have a question for Mr. Fortin on the economic impact.

Mr. Fortin, you may think that I am confusing issues here, but coming from the Quebec City region, I know that there was a strong lobby to keep the Nordiques in Quebec City. Some people argued that the costs involved would be recycled in other ways in the economy, but there are some costs which are not recyclable.

For example, we are told that a large proportion of the spectators at the Montreal Grand Prix are tourists. As regards the fireworks display in Toronto, we are told that the spectators are tourists. We are informed that there are some specialists in automobile racing or other areas who come to watch. This is a considerable value added element, Mr. Fortin.

You say that cigarette smoking would decrease by 20 per cent. The purpose of the bill is to ensure that smoking among young people does not increase. Health Canada admits that it is incapable of changing the habits of six million smokers. Some people even say that there are ten million smokers. We hear that 50 per cent of smokers do not manage, for all sorts of reasons, to stop smoking. I find your approach to be very optimistic. How do you think that it may be possible to reduce tobacco consumption among current smokers by 20 per cent? How can this be done? I very much doubt that this can be done through legislation.

I will give you another example, if you're looking for one. Marijuana is prohibited and yet consumption is increasing.

Mr. Fortin: As regards the first question, I would say that the Montreal Grand Prix is the biggest annual sporting event in Canada. It attracts more spectators and makes larger profits than any other annual sporting event in Canada. The figures are absolutely incredible. People are beating down the doors of the Grand Prix in their wish to sponsor it. When you sponsor the Grand Prix, you have an international window and hundreds of millions of individuals will look at the advertising for your product.

Please don't try and tell me that if tobacco companies are no longer able to sponsor this product as freely, the Canadian Grand Prix is going to disappear. There are hundreds of potential sponsors just waiting to replace them. Mr. Legault, the Chairman and CEO will simply have to decide who is going to replace them.

The second question deals with the assumption that there could be a 20 per cent drop in smoking if Mr. Dingwall's bill is adopted. This 20 per cent reduction is simply a standardization. It is an assumption made simply to show that if there were a 20 per cent reduction, there would still be a net creation of 8,000 jobs in Canada and approximately 2,500 in Quebec.

.1200

Mr. Dubé: There's not much chance of that happening.

Mr. Fortin: There will be this net job creation. Obviously, if the figure is 10 per cent, then 4,000 rather than 8,000 jobs will be created.

If you think that regulations, incentives, education and taxes do not have any impact on smoking by young people, you have not been near my driveway. Prior to 1994, when cigarettes were very expensive, one out of every five of my children's friends smoked. Since 1994, four of the five smoke. I don't need Statistics Canada - and I would just add that my calculations are based on the figures provided by Statistics Canada - to tell me that the enormous drop in the price of cigarettes has had a tremendous impact on smoking by young people.

As you know, tobacco is a drug. Nicotine causes dependency, and obviously tobacco companies seek out young people because they fully realize that if young people get hooked between 15 and 20 years of age, they will spend $1,000 a year on cigarettes for the next 40 years, and the companies concerned won't even have to go and try and attract them, because they will already be dependent. Ask Mr. Havel in Czechoslovakia what he thinks about that.

[English]

The Chairman: My problem is that this member has already taken about twice his time, so if you have brief responses, would you go ahead?

I don't want to deprive the other members of their time.

Dr. Stewart: If I may, I will just add in response that this is a question of prevention of and not cessation of the current addiction, and it is targeted towards youth. Youth is the age of choice and the average age in Nova Scotia is 11 years of age. They will choose at that point to become addicted, which occurs fairly quickly with nicotine. That's the issue. This is a preventive bill and will prevent and eventually achieve the 20%, or whatever it may be, but certainly it is a question of youth.

The Chairman: We will hear from the member for Macleod, Grant Hill.

Mr. Hill (Macleod): Mr. Fortin, you've talked about an actual net benefit. What do you think of the study by tobacco companies that said because people die early there's actually a net benefit to society in continuing to smoke?

Prof. Fortin: No, because those guys who would have continued living, of course, would have cost the health sector more. But they would have worked and earned the money to finance it.

So on net what remains is that we do economize on those upfront costs once tobacco consumption falls, but of course there is no evaluation in their study, for example, of the study by Mr. Renaud, a former president of the CIAR. There is no evaluation in that study of what the loss of human life in this calculation is worth. This, we believe, is an indication that their study is totally unacceptable.

Mr. Hill (Macleod): Do you think that by stating that people die earlier from tobacco consumption they're saying something quite distinct from what they have said over the years?

Prof. Fortin: Pardon me?

Mr. Hill (Macleod): They have denied for years that tobacco kills people. In this study they said because it kills people early, it's a net saving to -

Prof. Fortin: I was not clever enough to pick that up. If I had been a trial lawyer, I probably would have picked it up immediately.

Mr. Hill (Macleod): Finally, would it be this panel's view that this bill is more of a preventive for youth rather than a bill directed at those who are already smoking? And we'd all like to quit but -

Dr. Stewart: Yes. Still, I believe that the point must be made that we believe this to be preventive and, in fact, very much in favour of smoking-free youth. We recognize, as have physicians and scientists, that nicotine addiction is tremendously difficult to break. For such a powerful drug there has to be some regulation. There has to be an attention to prevention rather than, at this stage, to cure.

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The Chairman: Thank you. Mr. Murphy.

Mr. Murphy (Annapolis Valley - Hants): Thank you, Mr. Chairman.

Welcome to the panel. I particularly welcome you, Ron, an old friend from Nova Scotia.

I have two things. Are there other interventions you would see to put forward with regard to impeding youth from participating in smoking? That's where the issue is to a great extent for us. We are trying to do something about the preventive thing. I'm just wondering if there's something more - it's not necessarily for enhancing the legislation - you've thought about.

My other question often arises. It's not one I necessarily buy into. This is the relationship between smoking and health care with regard to bypasses, heart conditions, cancer, etc. Some people do not necessarily want to deny smokers access to our health care but wonder whether the people should pay a penalty. I know they're addicted, but it's a question that often arises. It's a question that's very difficult often because of the addiction element. It's very difficult to whack somebody over the knuckles for that.

Dr. Stewart: Let me speak to the first issue, Mr. Chairman, if I might. I thank you for that question, which is whether or not we can do more in terms of youth.

There is good evidence that youth respond to the price of cigarettes by not purchasing them. We believe that taxes are an instrument to reduce consumption among youth.

There is of course a balance that the bill attempts to reach. We have various opinions, I'm sure, around the table about the recent increase in taxes.

When we look at what influences youth most, it is peer pressure; however, peers receive their presumptions about addiction and tobacco from advertising and sponsorships, and there's this creation in society that this addiction is somehow normal. This bill addresses that to an extent, and we support that heavily. So we must take the first step and pass this legislation quickly.

The second one is in terms of penalization. I know you didn't use that term, John, but in terms of additional costs for those who are addicted, may I say that 90% of those who are currently addicted made the decision at the age of 14 or 12, or even 9 in some cases. Are we going to punish our citizens for making that decision when their life experiences would not prevent them from making that choice?

Let us look at the problem, which is the tobacco industry and those who are making profits from death and disability in this country.

The Chairman: Bonnie Hickey, the member for St. John's East.

Mrs. Hickey (St. John's East): I have two quick questions that I want to follow up on from my colleague from the Bloc. I'd like to know what evidence or proof, if any, you're aware of that tobacco advertising and the promotion of tobacco is directed directly at youth. We need to know if there's evidence that these companies are directing their advertising to youth.

Dr. Stewart: You might ask: where else would they direct it? They say they're directing it to brand-switching, but if you look at those events that are sponsored, they're very carefully chosen and there's a broad spectrum of choice. They'll give a little bit of money to a fledgling theatre group in Nova Scotia that will just have a little logo on it. Then you can look at the major sponsorships in which colour and logos proliferate on racing cars, posters and so on.

Social scientists will say, with credible evidence, that sponsorships and the creation of an acceptance that the behaviour and addiction is normal is the issue. There's plenty of evidence to show that youth respond to this.

For example, look at racing cars. Who goes to races with their dads and moms? Their children go with them. Who looks at fashion? Adolescents look at it. In Nova Scotia, 25% of our 15-year-old girls smoke. This is a national disgrace. Are they interested in fashion? Absolutely. Do they read books that are geared to the age of 15? No. They read Seventeen*o. They read adult magazines.

So the social scientists - we have some evidence here - will say that this is very carefully crafted to entrap our youth. Otherwise, why would an industry whose profit motive is well known direct millions upon millions of dollars? Ask yourself that question and you will get an answer. They want to present addiction and their product as a normal thing that youth can pick up and choose, at an average age of about 12 years. That's the answer.

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Mrs. Hickey: I have one quick comment on that. With the amount of evidence that the nicotine in tobacco is addictive, can you tell us who today is saying it's not addictive, with everything we're going through?

Dr. Stewart: Mr. Chairman, I would invite the committee to peruse the documents from the United States that show indeed that when subjected to the question, ``Do you believe nicotine is addictive to a person?'', the representatives of the tobacco companies said no. I rest my case.

Mr. Dhaliwal: I need to clarify one point, Mr. Chairman.

The Chairman: Very quickly. We're out of time.

Mr. Dhaliwal: I want to clarify something on taxes. You talked about a balance. Just for the record, would you propose that we increase the taxes from what they are now? Do you think it's adequate? What would be the view of this panel in terms of the tax hikes we've announced?

Dr. Stewart: We couldn't give you a figure - that obviously would be for the committee to determine - but we believe the balance is between reaching a price of cigarettes that would be deterring... I personally believe - and this is a personal belief - that the taxes are too low and must be raised.

Mr. Dhaliwal: Okay. That's all I wanted to hear.

The Chairman: Thank you, Dr. Stewart and colleagues. We're out of time.

Dr. Stewart: Thank you very much.

The Chairman: We're just trying to be fair to everybody here. Thanks very much for coming.

We now invite to the table someone who's appearing as an individual, Pierre Lemieux.

[Translation]

Go ahead.

Mr. Pierre Lemieux (Economist, individual presentation): Ladies and gentlemen, members, at least those remaining, Bill C-71 cannot be considered without establishing a link between tobacco and a matter that is quite seldom evoked in this august assembly, namely the freedom of the individual.

Let us assume as a hypothesis that tobacco is as harmful to the smoker's health as State propaganda would have us believe. I remind you that as for everything there are some doubts about this hypothesis and if tobacco does cause certain diseases, it prevents others such as Alzheimer's, for example.

Another advantage of tobacco is that it combats obesity. A study published in the New England Journal of Medicine notes that there are almost as many deaths resulting from obesity as from diseases attributed to tobacco. Tobacco is not the only thing that is bad for oneself. There is also a risk involved in drinking, skiing, driving a car, making love, etc. It's a matter of determining whether the State should prohibit pleasure because it's dangerous.

As for secondhand smoke, it's probably the hoax of the century originating in the U.S. and swallowed hook line and sinker by your bureaucrats. The risk factor of secondhand smoke, as calculated by the American Environmental Protection Agency, namely 1.19, is so small that it cannot have any distinct epidemiological significance. Indeed, 80% of the present epidemiological studies show no positive or statistically significant correlation between secondhand smoke and lung cancer.

Furthermore, even if secondhand smoke were responsible for the damage claimed, the rights of private property and contractual freedom, other ideas that are not often mentioned here, should normally allow for some trade-offs in settling disagreements between smokers and non-smokers about their preferences.

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I cannot of course deal with these matters at any length in the amount of time I have available. I would advise you to read my short book to be published in January under the title Tabac et liberté: L'État comme problème de santé publique.

In short, the decision to smoke is an exercise of the individual's freedom of choice. Leave us alone!

I realize that Bill C-71 is not the worst Act studied and adopted by the federal Parliament, in its continuous encroachment on our traditional freedoms which is slowly but surely transforming this country into an administrative tyranny, to use de Tocqueville's expression. But it is just part of this general trend.

We have not given enough thought to one of the consequences of this anti-tobacco legislation, namely reinforcing individuals' dependence on the State. We now consider it normal for the State to determine what is good for the individual to consume, to read and to say. What business is it of yours if I decide in my bedroom to smoke ``a cigarette after love'', as Charles Dumont says in his song? What business is it of yours if I decide to organize a cultural event and a tobacco manufacturer or someone else agrees to sponsor it on conditions satisfactory to both parties?

History shows that dependence on the State is far more dangerous than dependence on any particular plant. The State is the most dangerous of drugs. Excuse me for being blunt, but someone is going to have to speak frankly to you from time to time, ladies and gentlemen who are our legislators - but you have become our number one health problem. Leave us alone!

I'll deal very quickly with the fundamental question of freedom of expression. Although our so-called charters proclaim, admittedly with a great many reservations, the principle of freedom of expression, your legislative assemblies are constantly finding pretexts to establish limits. People must be protected against pornography, hate literature, independent opinions during election campaigns, tobacco advertising and all the rest. What are you going to come up with the next time?

Don't count on tobacco manufacturers to defend the principle of the freedom of the individual. Basically, they are like you, they couldn't care less. But that is no reason why I, like any supporter of freedom, should not defend their right to express themselves in promoting their products either directly or indirectly.

Actually, if there's any type of advertising that should be prohibited, it's the lying propaganda of the State. Paragraph 4(a) of your bill should be seen in relation to what has been described as the Lalonde doctrine. In a publication put out in 1974 by the Department of National Health and Social Welfare and signed by Minister Marc Lalonde, the chapter on science and the promotion of health starts with the following words, and I quote:

Critical investigation and scepticism and particularly the scientific method, all of which are essential for research, at the same time create a number of obstacles for promoting health. Science is based on hypotheses and assumptions whereas the information required to influence public opinion must be clear, precise and unequivocal. But the urgency of several health problems in Canada is cause for remedial measures, even if all of the scientific proof is not available.

In other words, the government is telling us that the caution and skepticism shown by science can prove to be harmful when one wishes to ``modify the behaviour of the population''.

Why don't you just stop modifying people's behaviour to make it conform to your models. Leave us alone!

Another disturbing aspect of Bill C-71 is the new power it confers to a State that already has too many powers. The Governor in Council, that is in the best scenario the party in power and in the worst scenario the bureaucrats, are given huge discretionary powers. The bill is of course full of prohibitions and prison sentences. It will contribute to reinforcing the hold of official ID documents, contrary to Canadian tradition. In some cases, the onus of proof is reversed in keeping with the increasing trend of your legislation. Huge powers are turned over to a new race of inspectors and enforcement cops, to speak bluntly. Leave us alone!

And what is the purpose of all this? To prevent the rape of children and the killing of little old ladies? To protect the freedom and property of Canadians? No, on the contrary. It is to combat the unspeakable scourge afflicting us when individuals decide that the pleasure of smoking Nicot's weed more than makes up for the dangers. Leave us alone!

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Will this act at least have the effect of discouraging young people from smoking? I don't have any opinion on the possible influence of tobacco advertising on young people. Let's assume that it does have an effect for argument's sake. This hypothesis is far from justifying the conclusion that State coercion is acceptable in exercising strict control over the sale and promotion of tobacco.

What the devil is the role of parents if not to teach their children to become free and responsible individuals? Why do you put so little trust in the adults who elect you and the children who will soon be replacing you? In my opinion, a good part of the present legislative and regulatory diarrhea is aimed at taking away young people's responsibility and treating everyone as children; and then the legislator can consider his subjects as imbeciles unable to make enlightened personal decisions. Lastly, I'd like to point out that it must not be impossible to stop smoking since half of non-smokers are former smokers.

In pursuing your holy war against tobacco, you are making your contribution to the advance of the new wave of puritanism throughout the world, just a new expression of the older forms of puritanism. In his book on democracy in America, Alexis de Tocqueville noted that the puritanism of the American colonies took the form of the legal prohibition of blasphemy, adultery and tobacco. I'll spare you the exact quotation.

It's no coincidence that in the course of history various totalitarian States have often fought against tobacco. A popular slogan used in Asia proclaimed: ``German women don't smoke''. Hitler, a former smoker, had a very set idea about what constituted good Nazi morality, including vegetarianism and an aversion to alcohol and tobacco. Hitler prohibited smoking in his office, although he didn't go so far as to forbid it in other people's offices. People should have said the same thing to him, before it was too late. Leave us alone!

Any parent, or anyone with elementary knowledge of human nature, can predict the perverse effects of this new politically correct crusade as represented by Bill C-71, particularly the increased attraction of forbidden fruit for young people. In both Canada and the United States, government estimates indicate that along with governments' hardening moralistic crusades, tobacco consumption among teenagers recently began an upward climb.

Some people even suggest that the State's ridiculous propaganda on secondhand smoke downplays the danger of tobacco, and even the danger of hard drugs, and encourages consumption. But the ultimate illustration of the perverse effect of such State moralizing can be seen in the following phenomenon: forbidden tobacco has now achieved the status of a sex fantasy.

There are now pornographic videos showing clothed women in the process of sensually inhaling and exhaling cigarette smoke. There is an Internet news group called alt.sex.fetish.smoking. The editor in chief of an American fetishist magazine states, and I quote:

Smoking is the sex fantasy of the 1990s.

Only the State could have managed this extraordinary feat, imposing simplistic views that have the effect of transforming tobacco into forbidden fruit and a sex fantasy!

In conclusion, I believe that if members of Parliament still have some respect for the individual freedom and dignity of those who elect them, they will reject Bill C-71. Not only are the terms and conditions of this bill impossible, but its very principle is unacceptable. Moreover, it is impossible to conduct with legitimate means the moral crusade against tobacco that the government has embarked upon like a bull in a China shop.

In three or four words, depending on the official language you prefer: Fichez-nous la paix! Leave us alone!

Ladies and gentlemen, members of the committee, I thank you.

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[English]

The Chairman: If you don't wish to speak, I can go to Mr. Hill. I thought you had indicated -

Mr. Dubé.

[Translation]

Mr. Dubé: Mr. Lemieux, your reputation precedes you and we recognize that you express your views on freedom frankly and clearly. We won't get into another debate here. It is usually claimed that the Official Opposition is there to oppose and criticize. In this case, Mr. Lemieux, except as regards the reversal of the burden of proof, to which we are opposed, this does seem to be the purpose of the legislation. We will try to reword it so as to make it clearer and satisfactory to you.

Moreover, this was the whole issue before the Supreme Court: individual freedom vs. collective rights, or the right of other individuals not to suffer the consequences of one person exercizing his or her individual rights. You haven't dealt with that, and I'd like to hear your views on that subject. We are in a room where smoking is not allowed; if a few people started smoking, I think that individual freedoms would not then be respected.

I can understand your example of the bedroom. As you no doubt remember, Mr. Trudeau referred to this in 1968, but you haven't dealt with that. I would like to hear your views on this issue. To what extent can we allow the individual rights of some people to infringe on the rights of others who do not share the same views?

Mr. Lemieux: That is a very good question, and I could easily take three hours to answer it if I were given the time. I will try to give you a quick answer which, however, is dealt with in the small book to which I referred, which will be published very soon. In fact, the book deals primarily with the type of question asked by the member.

The basic idea is as follows. Life in society requires that we reconcile the preferences of certain individuals with those of others, since individual preferences will be different. Tobacco is a good example of this. What happens when the State does not come clumping into this area?

What happens is what happened in the past. The individual is free to go to a smoking or strictly to a non-smoking restaurant. If there are enough non-smokers demanding such places where they will be protected from those nasty smokers, there will be private entrepreneurs, inspired by some base profit motive, who will provide such places. If the smokers have sufficiently strong preferences to persuade business people or restaurant owners to provide them with places where they can smoke, they will find them. Why should the government interfere in this process when there are private ways of reconciling individual differences?

I realize that my answer is not highly developed. There is a new movement in the United States against perfume and toilet water, with the following slogan: Perfume pollutes. These people don't like toilet water. They don't like the smell of toilet water and they want it to be regulated in public places, which in most cases actually means private places which the state has defined as being public. A restaurant is a private place, as is an office.

The problem with perfumes or unpleasant body odours can be resolved as a normal part of human relations. Nowadays, there are people who are allergic to all sorts of things, except of course to the power of the State. If in fact there are people who are allergic to perfumes and toilet water, restaurant owners will come along with the idea of providing them with restaurants or sections of restaurants where such products will not be allowed.

A recent article in the Wall Street Journal stated that in certain major restaurants the maître d' is especially trained to pick out the strong scents of certain clients and, if necessary, isolate them. All this is done as a normal part of human relations, with acceptable levels of tolerance, and also through rights of ownership allowing me to prohibit or allow smoking on my property. Anyone who doesn't agree can simply not come. The same thing applies in restaurants, offices, businesses or any other location.

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[English]

The Chairman: Members, I think we've taken sufficient time to know the views of this witness. If there is a burning question, put it. Otherwise I think we should move on.

A voice: Move on.

Thank you, Mr. Lemieux.

I now call on the Alliance for Sponsorship Freedom.

While we're making the transition, I want to mention to members of the committee that if you are contemplating amendments, it would help the process if you got a copy of your amendments to the clerk of the committee. I understand some of you may already be dealing with the legislative clerks over drafting, but the legislative clerks, of course, have a confidence with you and they can't transmit them to the clerk; only you can do that. So if you wish to alert the clerk of the committee of your intention to put amendments and what these amendments might be, it would help the process we're going to be into tomorrow if you would do that at some time today.

I welcome now to the table, from the Alliance for Sponsorship Freedom, Mary Moulton.

Would you be so kind as to tell me who you are? That is to say, since you are from an alliance, I know you're from particular organizations within that umbrella. Will you tell me who you are in terms of position and who is with you at the table. Give us a brief statement but allow some time for questions, please.

Ms Mary Moulton (Alliance for Sponsorship Freedom): Thank you very much, Mr. Chairman, members of the committee. I'm an executive committee member of the Alliance for Sponsorship Freedom and I am from Neptune Theatre in Halifax.

I am joined today by several people representing the alliance: Léon Méthot, from the players Grand Prix de Trois-Rivières; Michel Létourneau, from the Quebec Festival d'été; Andy Nulman, from Just for Laughs in Montreal; Christine Matton, from the Symphony of Fire event in Montreal; and Mike Smith, who represents the Molson-Indy. Michel Létourneau will be joining me and making a brief presentation before our question period following.

Over 370 organizations throughout Canada receive tobacco company sponsorship. These organizations are in large cities and in small towns. All of these organizations are struggling to keep actors, musicians, dancers, fashion designers, entertainers, and athletes employed. And it's working. The sectors that we represent are some of the fastest-growing sectors in the Canadian economy. But this isn't being done just to maintain and create employment. It's being done to improve the vitality of our communities and our very quality of life. As the government's red book correctly indicated, these sectors are, and I quote, ``the essence of our national identity''.

So why are we here today? We're here today to tell you we cannot do what we do without funding from the private sector and we think Bill C-71 will jeopardize that funding.

As you know very well, the funding from governments to our organizations has been declining steadily for over ten years now. No finance minister in Canada has told us to expect anything different in the future. It's actually quite ironic that we're here to defend sponsorships from the private sector when all the advice we've ever been given was to develop these partnerships ourselves. The tobacco companies are the largest corporate sponsors of arts and sports events in Canada, $60 million dollars in direct funding and close to $200 million in additional promotional support.

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The legislation of Bill C-71 will, in effect, create an environment that is no longer attractive to our tobacco company sponsors, resulting in reduced or no funding support at all. The reduction or elimination of this funding will have an enormous impact, and this impact will be felt right across this country, in the big cities and in the small towns.

Most of the people you're going to hear from today represent large organizations, so I'd like to take a few moments to talk to you about some of the smaller events in Canada.

In Vancouver, as an example, Bard on the Beach Theatre Society has been able to create three original theatre performances because of their tobacco company sponsorship. This has created employment for Canadian writers, directors, actors, a choir of 30 people, and 17 musicians.

Decidedly Jazz Danceworks, in Calgary, creates new programming because of their tobacco company sponsorship, which amounts to over 40% of the total sponsorships received for their performances.

The tobacco sponsorship of the Winnipeg Fringe Festival represents 36% of its total corporate sponsorship and enables 12 theatre companies to present their plays.

Danceworks' tobacco sponsorship in Toronto represents 24% of total corporate sponsorship and covers the artists' fees for ten dancers and for one of their five annual performances.

Arts Theatre Company in St. John's uses its tobacco sponsorship to create new plays, one of which employed four actors, and du Maurier is the largest corporate sponsor for this organization.

In Halifax, Neptune Theatre receives sponsorship funding from du Maurier for our studio series, which employs about 15 artists and production personnel. This sponsorship covers 15% of the cost of these 3 productions. We've had sponsorship from du Maurier for over 12 years, and our artistic director believes strongly that alternative corporate sponsorship funding for this experimental series is simply not likely.

Before I hand the rest of this presentation over to Michel, who will focus on Quebec in particular, I want to make one last point. We're here today because we are all worried; we're worried that there are thousands of jobs in this country at stake if this bill passes as it is today.

Equally important is that what we're doing in our communities is creating opportunities for Canadian artists and athletes to develop their talents and showcase them to their fellow citizens. At the same time, we are showcasing Canada to the world. This is what we're doing. We're not encouraging young people to smoke.

Michel.

[Translation]

Mr. Michel Létourneau (Festival d'été de Québec): There are a few figures which must be appreciated. In the case of the Tennis Open, sponsorship by a tobacco company accounts for 40% of the event's budget and 80% of its sponsorship portfolio; in the case of the Players Grand Prix of Canada, 20% of the revenue comes from tobacco sponsorship, which is probably equivalent to 25 to 30% of its sponsorship portfolio; as regards the comedy festival ``Juste pour rire'' (Just for Laughs), 10% of the budget comes from tobacco sponsorship, representing 50% of its sponsorship portfolio; in the case of our summer festival in Quebec City, tobacco sponsorship represents 15% of our budget but 50% of our sponsorship portfolio; the Montreal International Jazz Festival receives 12% of its budget from tobacco companies, which represent 45% of its sponsorship portfolio; the figures for the Benson & Hedges Internationals, held in Montreal, are 80% of the event's budget and 100% of its total sponsorship portfolio. You can therefore appreciate the undeniable importance of the support provided by tobacco companies in the area of culture and major events.

I would also say in response to the Minister of Health that the symphony orchestras of Montreal and Quebec City have received significant amounts, enabling them to develop new markets and organize regional tours, thus bringing cultural events to the regions of Quebec and other parts of Canada.

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If the bill is adopted as currently worded, our festival and many other events will lose the benefits resulting from the promotion of our site, city, region, province and country, in other parts of the world. This will have an impact on the degree to which we are known and recognized, and will also affect the economic spinoffs provided through tourism.

When I see that the paper prepared by Health Canada states that this will still be permitted, I really wonder how carefully the people concerned worked in drafting this bill. Health Canada acknowledges that the influence of friends is by far the most common reason given by young people when asked why they began to smoke. Please leave our events alone. Thank you.

[English]

Ms Moulton: Mr. Chairman, in concluding our official presentation, I would indicate that a couple of documents have been tabled today. One is research project results from Insight Canada Research concerning the perceptions of the Canadian public on tobacco sponsorships; the second is the economic impact of some 20 events in the country; and the third, some clippings that have been in the media concerning the views that our media have concerning this subject.

The Chairman: Thank you.

[Translation]

Ms Pauline Picard.

Ms Pauline Picard: Good morning and welcome to the committee. I am very pleased to see you here. As you mentioned, you were only just able to attend these hearings, given the speed with which the bill was referred to the committee. We are pleased to be able to hear your testimony today.

I would like to ask you a short question. The representatives of the Canadian Council on Smoking and Health told us that the tobacco manufacturers targeted only young people in their sponsorship activities; because such cultural and sports events attracted only young people.

I am thinking here of the Just for Laughs Festival, the Montreal Symphony Orchestra and the du Maurier tennis tournament. I would like to know what you think about the statement that these cultural and sports events attract only young people, although the tickets for them are very expensive. What do you think of that answer?

[English]

Mr. Andy Nulman (Alliance for Sponsorship Freedom): That is a very - how do we put this? - complex question, but let me answer as it pertains to my event, today at least, the Festival Craven A, Just for Laughs.

I wish we had the youth you say we reach. We don't reach youth. We reach adults. The majority of our shows are in clubs, which are for 18 years of age and over. The other big parts of our shows are in theatres, where we're really aiming upper crust, where people are spending $30 to $50 a ticket. So show me where the kids are.

I know where some of them are, and I can't lie and I can't hide it. Yes, we have kids on our outdoor site. But these are kids under the age of six. The majority of kids who come there come with their parents, and they're pushed around in a stroller. Now, they can't recognize anything; they don't know what a tobacco logo is. They don't know what the words ``Just for Laughs'' are. So where are the youth we seem to be getting?

I look at the statistics that permeate all our events, and each and every one of them has a majority adult audience. So where are the kids? They're not with any one of our events. But it's funny; the more I hear about this, the more enraged I get, because the government won't expect 7 million Canadians to quit their dependence on tobacco cold turkey, yet they expect it from us.

I hate to keep saying this, but I keep saying it over and over again because I really do believe we are the only loser in this whole debate. The government tax increase, $140 million coming in sales, will remain stable. Do you think sales are going to diminish because of 20¢ more to a pack or these restrictions you're putting on us?

They don't care. Tobacco companies are thrilled. They'll say, hey, we won't have to give money to theatres and cars and other stuff; we can save this money, put it into our coffers. The money will still be there for anti-tobacco groups, funded by government. Hey, what happens to us? We're the sacrificial lambs.

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We're the only losers. There's no talk of replacement funds, no transition period - nothing. Why? It boggles my mind. People keep asking us what we want here, but all we want are the same rights as you. We want the right to take money from the tobacco companies. It's your biggest partner, and as Michel showed, it's my biggest partner.

Why am I after tobacco companies in the first place? It's because Bell cut me. Bell was our main sponsor and gave us $850,000. Then the competition came in and Bell cut my sponsorship in less than half. Suddenly I was out in the marketplace having to find another sponsor. That's why we went to the tobacco companies. They didn't come to us. Nobody comes to us - that's really unfortunate.

The fact is that tobacco gives us money the way they give you money. At least the money is well spent on us. Actually - that sort of came out wrong. At least, they're making two good things with the money when they're giving it to the arts and cultural groups.

Eliminating our events will not eliminate smoking in kids. I don't know why that keeps coming up - putting us and youth together.

The Chairman: Grant, did you have a question?

Mr. Hill (Macleod): Who funds you?

Ms Moulton: The alliance is funded by a combination of respective organizations - the tobacco industry and some other corporations that believe in the principle of freedom.

Mr. Hill (Macleod): What percentage would the tobacco industry put into your alliance?

Ms Moulton: I don't have full budget number for the alliance.

Mr. Hill (Macleod): Do you have a ballpark figure?

Ms Moulton: I can't even give you a ballpark figure because I honestly don't know. I know the amount of time and contribution each of us is putting into it, which is the most significant.

Mr. Hill (Macleod): Who funds the faxes you get regularly and what not?

Ms Moulton: The incoming faxes are funded by us ultimately and our outgoing faxes are funded by us. I don't have a number for you, I'm sorry.

Mr. Hill (Macleod): Are there no dues or amounts of money you put into the alliance as individual groups?

Mr. Mike Smith (Alliance for Sponsorship Freedom): We each pay our own way to meetings like this. We all send out our own letters. We are a partner with the tobacco industry. It helps sponsor our events. We're participating with the tobacco industry to work on this legislation to make sure it's not as restrictive as it has been.

Mr. Hill (Macleod): You said you're partners with the tobacco companies.

Mr. Smith: Just like we are with our own events.

Mr. Hill (Macleod): Have any of you been told officially that your sponsorship will be lost from a tobacco company if Bill C-71 goes through?

Mr. Léon Méthot (Alliance for Sponsorship Freedom): We receive 25% of our budget from Players, which means $500,000. We started the Grand Prix in Three Rivers in 1989 and we've been able to start it back again because of Players. If it hadn't been for Players we wouldn't be here, because we wouldn't be in existence.

Mr. Hill (Macleod): You missed my question.

Mr. Méthot: No. What I'm saying here is it makes sense. In order for us to be successful, we have to advertise on many fronts; we have to use TV and radio and distribute pamphlets and posters. This will be out if we want to include our sponsor in it. We won't be able to do it because of this legislation. If we can't do it, will the tobacco company still spend $500,000 on our event and get nothing out of it? I guess not. It won't be back, and there won't be a Grand Prix next year.

Mr. Hill (Macleod): Have you been told by the tobacco company that you will lose your sponsorship? That's what I'm asking - yes or no.

Mr. Méthot: Any intelligent person will make that deduction from what I just told you.

[Translation]

Mr. Létourneau: I have spoken with du Maurier, and they told me that if the bill is adopted in its current form, our contract will have to be renegotiated.

[English]

The Chairman: Mary, go ahead.

Ms Moulton: I have not had a conversation with du Maurier about the studio series.

Mr. Nulman: I've spoken to Craven A representatives and they said everything right now is on hold until they see the outcome of this. That's it.

[Translation]

Ms Christine Mitton (Public Relations Director, Société du parc des Îles (Benson and Hedges Symphony of Fire), Alliance for Sponsorship Freedom): As regards the Symphony of Fire, I have spoken with my sponsor, namely Rothmans-Benson & Hedges. They are not interested in sponsoring an event such as the Symphony of Fire where they would have only 10% of the promotional and advertizing space.

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[English]

Mr. Smith: I've spoken with representatives of Players and they have the same sort of comments that it will be drastically diminished if they don't have on-site, on-TV signage - and their signage on site is one-tenth of what it used to be. The rights fee would be greatly reduced.

But I have another problem. Indy Car over the weekend told us something very similar to what Formula 1 has said - that as the legislation is planned, they don't see the viability of racing in Canada. So that means the Molson Indy in Toronto and Vancouver would be at risk. It would not come to Canada if tobacco advertising on the cars is not allowed. It has contracts with international tobacco manufacturers, and if they're not on the cars, it will not be coming to Canada.

The Chairman: Mr. Murphy.

Mr. Murphy: Thank you, Mr. Chairman.

Mary, I have a question for you. My understanding is that maybe the tobacco industry puts about $25,000 to $30,000 into Neptune Theatre, which I like very much, by the way.

Ms Moulton: Actually, it's closer to

[Inaudible - Editor]

Mr. Murphy: Yes, but you talked about 15 persons being attached to that money. I happen to know that ACOA put a great deal of money - several million dollars - into theatre. From a specific point of view, I'm really concerned that the by-product of what we're talking about, namely employment and economic growth, is that we're pushing kids into the cigarette mode and then, of course, pushing them into addiction.

Let me really play hard ball. If the government really supports some of the arts like Neptune Theatre, and we believe in this legislation, and you want to carry on with the tobacco companies, should government back out of supporting the arts? I'm having difficulty with government supporting the arts and saying also that we support this legislation. Should we be supporting the arts? You know what I'm getting at.

Ms Moulton: First of all, with respect, I would say it's a bit bizarre to think that government would pull back from support of the arts in this country. Certainly, Neptune Theatre aside, I represent a much broader group of organizations in Atlantic Canada and we rely very much on the public sector to help us.

More particularly, to the point of youth smoking, I think it needs to be said that all of us believe the initiative the federal government is taking to address youth smoking and prevent it is admirable. We all believe in that and we all think that's appropriate action for the government to be taking. However, to use Andy's words, I don't think we want it to make us the sacrificial lambs. Let's not throw the baby out with the bathwater.

These events we're talking about are adult events. They are marketed to adults, for adults. That's our primary audience and I think we must be able to continue to do that. We require private sector partners in order to allow us the opportunity to continue showcasing this work. I think it's extremely important that the two be easily married and there is a win-win solution. We've offered it to the Minister of Health.

The Chairman: There are three others who'd like to intervene. If you'll do it quickly and briefly, we'll do it in this order: Mr. Scott, Mr. Dubé and Mr. Volpe.

Mr. Scott (Fredericton - York - Sunbury): Thank you, Mr. Chair.

Mary, I'd like to distinguish between the current bill and some of the literature that I think predates the bill.

It was anticipated there might be a total ban on advertising. I'd like to use that as an explanation for the reference in a release that was sent out on November 4. It talks about other events that could be cancelled as a result of the federal cabinet's decision, and I assume that's a decision for an outright ban, because it includes Neptune Theatre and Theatre New Brunswick.

I'm a former director of fund-raising for Theatre New Brunswick. I know how hard it is to come by money, and I'm a big fan of the theatre, not just in Fredericton but across the country. I'm quite sympathetic to the dilemma this exercise may place you in, but I have a hard time imagining that -

I know in some years du Maurier's sponsorship might be as high as $30,000 and other times it might be $20,000 at TNB. I know its budget and I know that's not going to cancel Theatre New Brunswick. I wonder if in fact there is some explanation for this by virtue of the fact that this anticipated an outright ban, but this bill doesn't do that.

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Mr. Nulman: You are 100% correct that this bill does not have an outright ban, but we all see it more as a back-door ban. To draw an analogy, it's like there's a great open field with landmines planted in it. You've covered it with barbed wire and thrown a couple of attack dogs in. You'll say that you didn't say one couldn't walk in the field.

That's what we are being faced with right now. Yes, it's not an outright ban. That was very crafty and brilliant on your part.

However, here's the thing. Without the possibility to promote Just for Laughs on radio and television, how am I going to bring people in? So essentially, if I can't do that in the regulations right now, then the sponsor is not willing to ante up its money. Essentially, that's why we look at it as a back-door ban.

Mr. Scott: With respect, though, I'd like Mary to answer the very specific question.

Ms Moulton: Yes, that's fine. I know you're speaking more about the smaller organizations that receive small amounts of money. That's right.

I believe our corporate sponsors respond in Atlantic Canada in the same way, except on a different scale, as in the rest of the country. Our markets are not as large. Corporate sponsors of all sorts come to the table to partner with us on the basis of what kind of exposure they will get for their organization. Whether it's $20,000 at Theatre New Brunswick or $5 million for Ontario Place, the same decisions are made on the same basis.

Mr. Scott: Could it be cancelled? Do you honestly believe that?

Ms Moulton: In the case of Neptune Theatre, I can say that our artistic director has made it very clear to me that they tried to seek funding for the studio series in a number of places, and du Maurier is the only organization that would go out on a limb to support experimental theatre. I can only speak to what I -

Mr. Scott: Just to finish the thought, this says that other events that could be cancelled as a result of the federal cabinet decision include the Neptune Theatre in Halifax.

Ms Moulton: It's the studio series at Neptune Theatre.

Mr. Scott: It doesn't say that; it says it would cancel Theatre New Brunswick.

Ms Moulton: It is the event that is sponsored by the tobacco companies at those organizations that we're speaking about.

A voice: From the motor sport side, do you understand the issue we're faced with?

A voice: Oh, yes.

[Translation]

Mr. Dubé: Mr. Chairman, I would appreciate it if the three studies quoted by Ms Moulton earlier could be tabled with the committee. I found that interesting, as well as the percentages given by Mr. Létourneau for the events within his group. These percentages concerned the budget and sponsorship support.

I have one last question. I have been given to understand that this piece of legislation not only threatens current events, but completely compromises the future of new potential events, such as regional tours.

I also have a question on a third point which you were not able to discuss sufficiently. There are small cultural and sports events organized in the regions, not in Quebec City or Montreal, but rather in Abitibi, Lac St. Jean, and other parts of Canada. I would not ask you to answer immediately but rather to provide us with a list of all the... You mention the major events but, Mr. Létourneau, I know that the smaller the events are, the larger is the contribution of sponsorship to the overall budget. I am very concerned about you, but even more so about small events in the regions, because generally major sponsors are not very interested in promoting activities in the region. Therefore, I'd be grateful if you could provide us with those figures.

I will just give one small example. During the weekend I was invited to the School of Music at Laval University. It was sponsored by du Maurier. I am convinced that many events of this type could not be held if sponsorship were removed. I would be grateful if you could provide the committee with these figures by tomorrow. Before it is too late.

Ms Mitton: I understand your concern regarding small events and small sponsors. You are quite right to bring that up today.

One other point was not mentioned. We represent major events. On the international scene, these major events are number one; they are not the best events.

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I would mention here the festival ``Just for Laughs'', which is the only major humour event in the world. I would mention also our fireworks festival, which is among the best event of its kind in the world. It is the biggest firework festival in the world. All the best producers of firework festivals come to see our event. People from Disney no longer go to other countries. They come to Montreal to see what is being done in that field and then plan their Walt Disney season after that. The same thing applies to the Montreal Grand Prix, the tennis tournament and the Atlantic Grand Prix.

Montreal therefore has a value-added element based on its high quality international events. If sponsorship by tobacco companies were to disappear, the impact would be dramatic on our events. The size of the events would be reduced by 50, 60 or 20%. This is a point I would like to make.

Furthermore, the City of Montreal would no longer be the same next summer if sponsorship from tobacco manufacturers were to disappear now. The bill does not stipulate any timeframe or set a date. If the bill were adopted as it is currently worded, it would come into effect next summer, in 1997. We are in the course of preparing our events. It would therefore have a very dramatic impact on the events of next summer.

[English]

The Chairman: Joe Volpe.

Mr. Volpe (Eglinton - Lawrence): Thank you, Mr. Chairman.

All of you have painted a picture that's very pessimistic. I suppose we can agree to disagree on the philosophical or ideological position of what would likely happen in the event that the legislation passes as it is written. Your sponsors may or may not withdraw.

All of you use figures that suggest a particular percentage, a high percentage, of your sponsorship comes from the tobacco companies. But in fact all of those figures, when matched up against your revenue, are really reduced to a very small portion. There's a study - one of yours, I think - on tobacco sponsorship in the arts, and it indicates that your sponsorship goes down to as low as 0.4 of 1% of overall revenues. I went through them and I couldn't find any higher than about 3%.

Is that an unreasonable amount for you to raise, to replace, if we look at a worst-case scenario?

[Translation]

Mr. Létourneau: Where do these figures come from? What are you talking about?

[English]

Mr. Volpe: I'm talking about your sponsorship moneys as a percentage of your overall revenues.

[Translation]

Mr. Létourneau: The overall proceeds from the Quebec City summer festival amount to $4.5 million, $550,000 of which come from sponsorship by du Maurier. What percentage does that represent? You can calculate that yourself. Mr. Volpe, your statement is incorrect. I don't know where you got those figures; they're not accurate. Of course sponsorship accounts for 3% of the overall budget for certain events. However, it accounts for 80% of the budget of certain other events. We are a very long way from your 0.4%. I'm sorry, but I don't know where you got those figures.

[English]

Mr. Volpe: I suppose you may be right. I'm willing to concede that you might have figures that are more up to date than mine. I guess we're both engaging in the same kind of exercise.

You're coming forward as a group and conveying an impression that's general and applies to everyone. That's the impression you're conveying.

When we go down into the detail, I'm looking at, as I said, items where some of the sponsorships are 0.4 of 1% of total revenues. You've indicated one where you have 80%. I haven't found any in here. If we want to look at the details of each individual one, we will probably get a different impression.

As long as we're going to agree that you're trying to convey one impression and I'm trying to convey another one, I'm still going to come back to my question. Is it unreasonable to expect that, as a general principle, you might in fact be able to replace some of those revenues?

Mr. Smith: Maybe I can address that.

As an example, in the Formula 1 Grand Prix event in Montreal, Molson this year decided to step down as the title sponsor, after about 10 years of being the title sponsor in that event. It went to the market and there was nobody else ready to step in. Coke, McDonald's, even Labatt, another competitor to Molson, didn't step in. It was Players that stepped forward.

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We're out there every day on the market looking for sponsors. There's not a line-up to replace tobacco if they get pulled out.

As you're suggesting, it may not be a high percentage, but it's millions of dollars, and it's hard to replace that these days.

Ms Moulton: If I could, Mr. Chairman, I'd like to add to that.

It's one thing to look for significant dollars for major, high-profile events. When you have events or organizations operating out in the regions and in communities that don't have that kind of market, raising $10,000 is a huge challenge. We don't have people lining up at our door for that sort of funding.

The Chairman: Thank you, Mary and your colleagues, for coming. You've been most helpful.

I was hoping, Andy, that you would provide a moment of levity here this morning for all of us.

Mr. Nulman: All I can say is, for levity, tonight at 8 o'clock on CBC national TV is the Just for Laughs Comedy Festival.

The Chairman: We'll be there. Thank you very much.

We now invite to the table, from the Conference of the Arts, Keith Kelly, the national director.

While we make the transition,

[Translation]

I would like to invite my colleague, the Vice-Chair of the Committee, Ms Pauline Picard, the Member for Drummond, to take the chair for a few minutes.

The Vice-Chair (Mrs. Picard): We would ask Mr. Kelly, from the Conference of the Arts, to make a short statement, following which the members will ask him questions.

[English]

Mr. Keith Kelly (National Director, Canadian Conference of the Arts): Thank you, Madam Chairman and committee members, for making time for the Canadian Conference of the Arts to participate in this important discussion.

We have been involved in the discussion of tobacco sponsorship for over 14 months. Over that time we have conducted extensive consultations, not only with our own members and artists from all parts of country but also with health organizations, to talk about tobacco sponsorship. What has become very clear to us is that this is a very emotional issue where logic is often eclipsed by the visceral reaction formed by people, as they have seen loved ones die or suffer from tobacco-related diseases.

For us, this has been a discussion about funding of the arts. However, it has become increasingly clear as we have progressed in this discussion that it is impossible to distinguish the issue of funding of the arts from the consumption of tobacco.

We have heard, time and time again, people from our own community and from the health community talk about what they have identified as legitimate public health concerns associated with tobacco sponsorship. It is for this reason that the board of governors of the CCA has come to the position where we have encouraged the Minister of Health to retain tobacco sponsorship but to develop a package of restrictions that would address those public health concerns, namely measures that would not see the use of sponsorship to promote smoking consumption or behaviour among children and young people.

From the limited time we've had to review Bill C-71, we are cautiously optimistic that the message has been heard by the minister. However, we have some serious reservations we would like to express.

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The details of the legislation are very vague. We understand that the day-to-day rules governing sponsorship will be developed by public servants working for the Department of Health and the Department of Canadian Heritage. It will unfortunately not be a public forum such as we have here today. We are not going to be very comfortable that perhaps overzealous bureaucrats will try to achieve, through regulations, the course that the minister has laid out in the legislation.

We believe there must be a strong assurance from the Minister of Health that affected communities will be consulted throughout the drafting of the regulations, because this is really where the future of tobacco sponsorship will be determined - not necessarily in the passage of Bill C-71.

We concerned that our members, when they accept sponsorship from tobacco interests, not be restrained in their ability to promote their events or activities to the Canadian public. If we can't let Canadians know what we're doing, if we can't attract audiences, that is a double blow to us.

So we're very concerned that the regulations be carefully crafted to ensure that sponsorship activity is not a tool to promote smoking and consumption to young people and children, but will not constrain unreasonably the normal activities of arts organizations in all parts of the country.

Today you're going to hear a wide variety of opinion on this topic, some of it from within our own community. I would be dishonest to suggest to you that there is unanimity in the arts community on this issue; there isn't. You'll be meeting with the Artists for Tobacco-Free Sponsorship later today. The divide, in our view, is characteristic of the creative tension that exists in the arts community at all times.

But there's also another divide. The producing organizations, whom you saw in the alliance and who are members of the CCA, are acutely concerned about the financial viability of arts activities in this country. We have faced ten years of cutbacks not just by the federal government but now by provincial governments, now by municipal governments. We're having a very difficult time finding the resources to keep the 1.2 million Canadians working in the cultural sector gainfully employed.

When you study the issue of sponsorship, we hope you keep that in mind. It's imperative that we have the tools available to us to promote our activities, to attract financial support not only from the government but from other private sector sponsors. The impact of a punitive regime of restrictions on tobacco sponsorship will mean that other sponsors will be considerably more reluctant to consider investing in the arts.

There was a question earlier about the percentages that tobacco sponsorships represent. I would like to say that in the wonderful world of statistics, you can come up with those... Okay, maybe I'll wait and answer that one.

We are concerned about, in the legislation specifically, the definition of ``promotion'' and ``lifestyle advertising''. We think those have to be looked at very carefully. We're also concerned about the enforcement provisions, which potentially impose steep penalties on the boards of arts organizations for breaches in the legislation, and add another potential financial burden to a beleaguered sector.

We would like to propose that you consider the model in use in Ontario right now for alcohol advertising, where in any breaches of the rules the responsibility is transferred to the sponsor and not to the sponsored organization. I think we can agree that the tobacco industry is quite capable of absorbing those costs; we are not.

We'd also like to recommend another revision. We can argue about how effectively sponsorship promotes smoking behaviour and health. What is more worrisome for us, however, is the continuing ability of tobacco companies to donate money to federal political parties. I would say that as an example to all Canadians, perhaps Bill C-71 should preclude the ability of tobacco companies to give financial support to political parties.

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This still is, for us, an issue of funding of the arts. We can make this discussion and all future sponsorship discussion go away by a strong political will to have a reasonable and adequate level of public investment in the arts. Until we have that, the CCA will continue to defend our ability to develop financial partnerships with the corporate sector in a responsible fashion.

Thank you.

The Vice-Chair (Mrs. Picard): Thank you. Mr. Dubé.

[Translation]

Mr. Dubé: The Conference of the Arts represents various artistic disciplines. I have often wondered about the benefits for tobacco companies in sponsoring certain artistic events, particularly in the vocal arts such as singing, opera or theatre. I equate these artistic activities with an olympic discipline such as track and field.

I would like you to give us some statistics. If you don't have the answers immediately, perhaps you could provide them to us later. I presume that a singer, in opera or some other area, would not smoke. I have not asked her the question, but I am sure that Céline Dion does not smoke. Young people admire these stars. Therefore, as regards tobacco companies, what is the point in financially supporting events of this kind?

I would like you to provide us with some statistics. Perhaps through such a partnership, tobacco companies are trying to improve their image as corporate citizens. That may be challenged in certain aspects, but I find it strange that you are so dependent on tobacco companies for sponsorship.

[English]

Mr. Kelly: I don't find it curious at all, in fact. I think it's a natural consequence of the failure of political will to provide adequate financial support to the arts. I must say we feel like a bit of a hostage in this discussion. On the one hand we have the tobacco companies, who have been generous supporters, who are very concerned about this legislation and are threatening to pull out. On the other hand, we have private member's bills such as Mr. Clifford Lincoln's saying that if you do take tobacco sponsorship we're going to consider you ineligible for any federal funding.

How do we put forward the interests of the arts in a very straightforward way? When does the health of the Canadian arts community become an issue of great importance for a society in and of itself, not related to tobacco, and not related to tourism, or whatever? We feel a bit pushed and pulled on this one.

There are many people in our sector who are not comfortable with tobacco sponsorship. I will be the first one to tell you that, and I hear it every day. However, failing a realistic substitute, we're going to have to make the best of the situation and try to develop an approach that allows us to address the legitimate public health concerns and, at the same time, make sure that the arts community is alive and well in all parts of the country.

[Translation]

Mr. Dubé: This in fact leads me to focus on what you almost just stated. In fact, you defend the policy of the lesser evil. Given that all levels of government in Canada are reducing the financial support they provide, you really don't have any choice if you want to ensure that the arts survive. But if you did have a choice and the government, through the Minister of Canadian Heritage, were to provide you with compensation to enable you to forego the sponsorship by tobacco companies, how would you respond?

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[English]

Mr. Kelly: Well, first of all, it's very important, when we talk about replacement funds, to acknowledge that if tobacco sponsorship were outlawed right now, that would not be the only money we would be looking to replace.

The government might say, we're going to make it impossible for you to accept tobacco sponsorship, and it shouldn't be a hard job to replace 0.3%, 0.4% or 4% of your budget. But the simple reality is some organizations have had 40%, 50% or 60% budget cuts from government. That's where we're working to replace revenue right now. We would consider a replacement program for all of the lost government revenue, but certainly not just tobacco.

In the world of natural justice, the people who cause you damage rarely get to assess the damage and the terms under which that damage will be paid to you. That's certainly how we would look at the question of replacement, if a total ban were included in the legislation or were the result of the regulations, which would make it impossible for arts organizations to assume the risk of accepting sponsorship or else make sponsorship so unattractive to tobacco partners that they would no longer be interested in putting the money there.

So the answer is it's a broader problem and we have to have a broader solution.

[Translation]

Mr. Dubé: I had other questions, but I will not go over the time allocated to me.

The Vice-Chair (Mrs. Picard): Yes, Mr. Dubé, because you have already gone beyond the time allowed.

Mr. Dubé: My apologies, Madam Chair.

The Vice-Chair (Mrs. Picard): Mr. Szabo.

[English]

Mr. Szabo: Thank you.

Mr. Kelly, I want to share with you a speculation. I'm looking down the list of witnesses here, and not one tobacco company is going to appear before this committee, not one.

Do you know what? The last time we dealt with tobacco on the plain packaging issue, not one tobacco company appeared before our committee. One sent a lawyer, who acted on their behalf, but not one appeared. It makes you wonder. It makes you wonder.

The tobacco problem has been before legislators in North America since the early 1970s and even before. Strategically there's no question that the pressures, because of the health concerns, have been to the extent that tobacco is an albatross.

Eventually tobacco is probably going to have to be totally banned or we'll stop its use just by the actions we've been taking in our society. What I see happening here - and it's really dreadfully tragic - is in terms of a long-term strategy, the arts, culture and entertainment have been set up as the front people for the tobacco industry to come and fight their battle for them.

It puts us in a terrible dilemma, because we're not against the arts or culture or recreation, but you are here defending the tobacco industry. If 10% of the population of Canada died every year from tobacco consumption, would you or any of the other cultural communities even accept dollars - blood money, as it were - from the tobacco industry to fund your things, or is there a point at which you would say no?

I guess that's the real question. It seems to me it's unfortunate, but you wear two hats.

Mr. Kelly: No, I'm not. I am only wearing one hat, I can assure you.

Over the last 14 months of this discussion the CCA has been criticized by the tobacco industry because it supports the public health objectives of the tobacco blueprint, and we've been criticized by the health community because we're defending tobacco interests.

The simple reality - and it's been the constant theme throughout our entire intervention - is we are concerned about the arts community. I don't give a fat fig about tobacco profits or tobacco promotion. I do care a great deal about the health of the arts in this country.

We have said in every representation we've made that we support the public health objective in Bill C-71 and also the blueprint that went before it.

I am not wearing two hats. I'm wearing one.

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Mr. Szabo: I believe you, sir. I would just then ask, do you think it's possible - ?

[Translation]

The Vice-Chair (Mrs. Picard): Do you have a second question? It will have to be short because there are other members wishing to speak.

[English]

Mr. Szabo: Knowing what the future holds for tobacco, would you agree with me that it's possible - just possible - that the tobacco industry has in fact sought you out, rather than your seeking them out, over these last 20 years, as part of a strategy?

Mr. Kelly: Well, if they have sought us out, they haven't been very good at it. We have had to go to them with hat in hand and proposals. There are many more people seeking funding than receiving it.

For us, the long-term strategy of most importance is a healthy arts in Canada. We're not going to be acting on the tobacco companies' behalf. As I said, when we say we support the public health objective, we get flak from the tobacco industry, that's for sure.

The Vice-Chair (Mrs. Picard): Mr. Scott.

Mr. Scott: Thank you very much, Madam Chair.

I can assure my colleague, Mr Szabo, that I'm one of those people who have called sponsors on behalf of, in my case, Theatre New Brunswick, and not very many people actually call you up and say, ``I have some money''. It just doesn't happen that often.

Having said that, I want to commend you on your intervention. We are trying to find some way to address a public health concern that we share and at the same time recognize there is a substantial community that would be negatively affected.

To some extent the ultimate bill reflects that a little bit, or at least an attempt at that. I know the fear three weeks ago was that we were going to see an absolute ban. To some extent the concern you expressed has resulted in something different from that. I appreciate the fact that's been recognized.

How close are we?

Mr. Kelly: That really can't be determined until we see where the regulations are going. We have some very large questions about the restrictions it will put on the organizations to promote their activities, with or without recognition of the tobacco sponsorship. We really have to have a very close look at not only the provisions of the legislation but also the regulations.

We participated once before in a legislative project that was considered to be of such great public importance that time was of the essence, and that was the child pornography bill. At the time we expressed concerns about some of the provisions and said it might be applied to legitimate artistic productions.

Harvie Andre, who was then government House leader, assured us they were taking proper care and this bill would never be used against artists. The first person charged under the bill was a professional artist exhibiting work in a gallery in Toronto, work that had been selected by a peer assessment on the basis of artistic excellence.

We're very concerned that when we look at this bill, we look at it very carefully so there aren't ticking time bombs for all of our mutual discomfort and inconvenience. The fundamental approach of maintaining sponsorship with reasonable restrictions is the right way. It's too soon to say, when we put the bill and the regulations together, how close we are to that point.

Mr. Scott: Thank you.

The Vice-Chair (Mrs. Picard): Mr. Hill.

Mr. Hill (Macleod): Thank you for your representation.

Do you feel you've had enough time, from the start of the process to now, to review?

Mr. Kelly: We have certainly been very actively involved in the whole blueprint discussion. We worked with Physicians for a Smoke-Free Canada and the Canadian Cancer Society to bring together representatives of the arts community and the health community in six Canadian cities to try to find compromises where we could both agree.

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However, this bill was just tabled last Monday, and we haven't had a chance to go over it very carefully. We haven't had a chance to get the kind of quality legal advice we would want to have to ensure that the interests of our members are going to be respected.

As I say, we have the great unknown, which is the regulations. We will certainly want to be closely consulted. As a matter of fact, I met the Minister of Health two weeks ago and he promised we would be consulted on the drafting of the regulations. That's very reassuring.

If we had the luxury of another two or three weeks to really look at the bill in a thoughtful, considered way, it could result in much better legislation, rather than sending it through warts and all.

Mr. Hill (Macleod): Along with the consultation with your groups on the regulations, do you think there should be a vetting of those regulations with elected individuals, so we're certain the Governor in Council cannot just ram things down that weren't expected?

Mr. Kelly: That's certainly been one of our concerns. Much of the regulatory process - and as you know, Bill C-71 has a very lengthy list of regulations that will be developed as a result of its passage - is not involving the direct scrutiny of Parliament. We find that very regrettable.

Public hearings such as these are a very important part of responsible public policy-making. The heart of this bill is going to be crafted behind closed doors and then it will be published in the Canada Gazette and we'll have 60 days to comment on it. There's no way of really actively engaging the public policy process as we would have if all of the provisions were actually in the bill.

Mr. Hill (Macleod): Do you have a preference for which committee would be that reviewing committee?

Mr. Kelly: I would say it should be a joint committee. For the regulations touching on the arts community, it should be a joint health-heritage committee that has responsibility for examining the regulations.

Mr. Hill (Macleod): Thank you.

Mr. Kelly: Thank you.

The Chairman: Thank you, Mr. Kelly. Your evidence has been helpful to the committee, I'm sure, and we thank you.

Now I invite to the table, from the National Association of Tobacco and Confectionery Distributors, Luc Dumulong and some colleagues.

I'm assuming that at that end of the table you have a pecking order. Whoever is the boss down there, would you start talking, tell me who you are and introduce your colleagues, please?

Mr. Luc Dumulong (Executive Vice-President, National Association of Tobacco and Confectionery Distributors): Hi. My name is Luc Dumulong. I'm the executive vice-president of the National Association of Tobacco and Confectionery Distributors.

Mr. David Crauch (President, National Association of Tobacco and Confectionery Distributors): I am David Crauch. I'm the president of the National Association of Tobacco and Confectionery Distributors.

Mr. Mark Tobenstein (Chairman, National Association of Tobacco and Confectionery Distributors): My name is Mark Tobenstein. I'm a distributor from Montreal and I'm the chairman of the National Association of Tobacco and Confectionery Distributors.

I feel a little funny here, sitting at microphone number 13. I hope that's not unlucky for me today.

Mr. Volpe: In eastern Europe and the southeastern Mediterranean basin, that's a lucky number.

Mr. Tobenstein: I hope you're right. I usually don't take row 13 when I go on a plane.

Some hon. members: Oh, oh!

Mr. Dumulong: I would like to present what the organization is and make a few comments on Bill C-71. After that we will take questions from the distinguished panel.

Established in 1955, the NATCD represents independent wholesale distributors from coast to coast. The variety of products handled by our members goes beyond tobacco and confectionery, as our name indicates. Our members also distribute groceries, health and beauty products, paper goods, lighters, food services, produce and fresh meat.

The NATCD regroups over 140 distribution outlets in Canada. Last year our members serviced over 43,000 retailers from coast to coast, for total annual sales exceeding $14 billion. Thousands of jobs depend on the activities of our members.

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We're also an integral part of the legitimate tobacco distribution channel and an indispensable link between manufacturers and retailers. For most of our members, tobacco represents a substantial part of their annual business. And last year, as you know, the government collected $5.9 billion worth of tobacco taxes.

We'd like to point out here that we do not push or promote tobacco use. We only distribute it.

Bill C-71, in its actual form, will have serious negative financial impacts on the retailers and wholesalers we represent across Canada.

The first point I would like to make to the committee - and this is a concern of all of our members - is on the intention of the government to operate by way of regulations that will not be available until after legislation is passed. Since there's no parliamentary consideration for regulations or requirement for consultation while the regulations are being drafted, and the consultation being very short, we feel this unnecessary type of approach would deprive us of a legitimate opportunity to take part in the process and explain our views. This could result in regulations that could hurt businesses and employment.

A ban on product advertisement at retail will result in a tremendous negative impact on wholesalers' clients, the retailers. These promotional activities are an important source of revenue for the distribution channel. These elements do not affect the decision to smoke or to use tobacco.

The display of packages at retail are not known yet and are to be determined by regulations here again. The potential of negative consequences resulting from reduced display are very serious for wholesalers and retailers. Without the $60 million paid by manufacturers to retailers, profitability would be seriously affected for very many retailers across Canada.

One of the hardest hit by these measures would be small, family-owned, independent retailers. With a modified display layout - and that seems to be the direction in which the legislation is going - retailers would have to reconfigure their displays at their own expense. Here again, small independent convenience stores, having limited resources, would be the hardest hit by the measures.

Reporting requirements by wholesalers single out our members and result in costly administrative burdens, not only for us but also for you. With the highly competitive nature of the trade these days, updates would have to be done on a daily basis, which would necessitate important allocation of resources and energy.

Unnecessarily high penalties can jeopardize the very existence of a business. The aim of a sensible legislation would be to deter people from violating the law, not to put people out of business.

An approved retail outlet concept is being introduced in the legislation and is yet to be defined by regulations. What will be the criteria designating an approved retailer?

Considering the importance of the tobacco category at retail, especially to small independent convenience stores, for which tobacco represents up to 45% of their business, will the requirements be positively met by the actual operators?

The worst impact of Bill C-71 will be on small businesses, as you can see. Since the majority of our members are independent, family-owned wholesalers servicing the majority of independent convenience stores in Canada, many would lose clients, resulting in job loss at both the retail and the wholesale level.

Now we'd like to invite questions, if you have any.

The Chairman: Mr. Dubé, Dr. Grant Hill and Mr. Szabo.

[Translation]

Mr. Dubé: You make a number of recommendations on the last page of your brief. I know you did not have much time. Did you list your recommendations in order of priority?

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Mr. Dumulong: No. They have virtually all the problems we see in Bill C-71.

Mr. Dubé: If I were to ask you whether you would like us to focus particularly on one or two of them, which ones would you choose? You have covered a lot of ground.

Mr. Dumulong: We did, because there was a lot of ground to cover. We discussed this with the members of the board. One of the things that seemed to disturb them the most was the lack of consultation and the short length of time everyone had to express his opinion and help the government introduce legislation which, while supporting a health policy, also takes into account the priorities of people who are in the field daily. We're talking about the little independents.

Mr. Dubé: So it is the way this was done.

Mr. Dumulong: Yes.

Mr. Dubé: If the government still plans to pass its bill through third reading before Christmas, I must almost force you - or let's say encourage you, because I don't want to force you - to tell us quickly which points you think we should concentrate on particularly. The fact is, we have to do the clause-by-clause study of this bill tomorrow afternoon. I confess that my attention may have wavered since we began our work this morning, but since you cover a lot of ground in your recommendations, I would like you to tell me which ones are essential in your opinion.

Mr. Dumulong: They're all pieces of legislation.

[English]

You guys can jump in whenever you want.

Mr. Tobenstein: I understand this bill is all about stopping people, specifically young people, from smoking. I can't seem to understand what taking away advertising at the store level is going to do. It's not the solution.

I made a specific point of stopping at a retail outlet when I bought gas. I asked the young girl there if she thought the advertising in the store was getting people to smoke, and she said no. I asked her if she smoked, and she said no. She said she does a lot of sports and she doesn't think smoking is good for you and she doesn't want to damage herself.

She said she works at the store all day long and the cigarettes are all around her, and it doesn't make her smoke. So why would it make other people start to smoke? This is the whole point.

I'm not against what the bill is trying to do; I just think you're going about it the wrong way. I don't see what this has to do with getting people to smoke or not smoke.

Advertising at the store level, which we have, is basically just to try to get the 10% of the smokers who aren't loyal to their brands to switch. This is the only opportunity, perhaps, for a tobacco company to get any kind of market share. I don't think it causes people to smoke.

I think if you asked people, you'd find this out.

[Translation]

Mr. Dubé: Let me ask you a rather sneaky sub-question. As far as losses go, the fact remains that some retailers or convenience stores said, during the informal consultations, that their interest was chiefly financial in nature. In Quebec, apparently they get $5,000 on average to keep a display in their convenience store. Is that just a rumour? Is there any basis in fact?

Mr. Dumulong: This is negotiated individually by the retailers and the representatives of the tobacco manufacturers. I could not give you a specific figure for each individual or each operator. However, the amounts are substantial. Quebec has the most independent retailers and convenience stores per capita, and thus will be affected more than the other provinces.

People who are part of a corporation, such as Provisoir, will be able to cope with the negative impacts better. The independents will disappear. So this contributes to the trend towards larger and larger corporations, and away from independents.

Mr. Dubé: Thank you, Mr. Chairman.

[English]

The Chairman: The member for Macleod.

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Mr. Hill (Macleod): Thank you, Mr. Chairman.

Many of us are concerned about the regulations, and you spoke of the regulations being undefined and broad and not coming back to Parliament at all, and the consultation process, in your view, not being sufficient. Could you describe to me how you would like to see the regulations changed, so that there was some better scrutiny?

Mr. Dumulong: I guess the ideal situation would be to have everything included in the law so that we can discuss it and bring forward and present our views to the committee, so that sensible regulations could be put in place, with both the aim of the government and the worries of the retailers and wholesalers taken into consideration. We feel that we were totally disregarded in this whole process. I see no -

Mr. Hill (Macleod): Obviously the regulations aren't in this bill. How, when the regulations come, can we make sure that your concerns are addressed?

Mr. Dumulong: We'd love to take part in some form of consultation, as I think we have a very, very important point to bring. We represent a lot of people, creating a lot of jobs, and a lot of the small operators that should be taken care of by the government.

Mr. Hill (Macleod): There must be consultation, and then who should look at the regulations? Should it just go to Governor in Council? Should it come to elected officials?

Mr. Dumulong: I think it would have to come back to the elected officials, because that's what they're elected for - to make sure that all the laws voted by the government are in line with what the people elected them for.

Mr. Hill (Macleod): Which committee would you see as that review...?

Mr. Dumulong: I would like to see - and correct me if I'm wrong - a joint committee with finance or revenue and industry and commerce being included in that, so that we'd have a much wider scope than just health. Health people are specialized in the sphere of health activities. We must bring more people in to make sure we have as wide angle a view as possible when we look at this, and that we don't take a tunnel-vision approach.

Mr. Hill (Macleod): If that happened, and you had that sort of opportunity, would the bill be less worrisome to you?

Yes, go ahead, Mr. Crouch.

Mr. Crouch: If we knew what some of these proposed regulations were going to be, I think we'd -

Mr. Hill (Macleod): We won't. I mean, I don't know what they're going to be.

Mr. Crouch: No. I guess this is my first time through this, but it seems very frustrating to me to look at something... We can see a lot of potential problems for our own businesses. We're all independent wholesalers; we represent independent wholesalers and we service independent retailers.

We see a lot of potential problems out there...to correct a problem, which we all agree on. We don't want to encourage young people to smoke. But the government seems to be putting a lot of pressure or potential problems...moving it onto people down the ladder, for which there is no need. I guess if that's the only solution it would make it a little easier if we were consulted, but we'd really like to see the whole package first.

Mr. Hill (Macleod): Thank you.

The Chairman: We are now going to switch sides and have brief interventions by the member from St. John's East, Bonnie Hickey, followed by the member from Vancouver South, Herb Dhaliwal.

Mrs. Hickey: Thank you, Mr. Chairman.

You were saying that tobacco displays will be affected by Bill C-71. Right now your average corner store and your small average store often display the big showcase directly behind the counter. This display itself shows a great deal of distance in promoting tobacco use to youth. How would you change such a display, to discourage people from smoking?

Mr. Dumulong: Actually we were discussing the issue, Mark, earlier, with the warning sign.

Mr. Tobenstein: I don't understand your question. You're saying the displays - what were you saying? You say the displays encourage people to smoke?

Mrs. Hickey: Yes. You've got your displays behind the countertop in every store. They're huge.

Mr. Tobenstein: How does that encourage people to smoke?

Mrs. Hickey: Because it's there in front of you. It's right there. You're looking at it. You see it.

Mr. Tobenstein: Are you a smoker?

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Mrs. Hickey: I was.

Mr. Tobenstein: I'm not a smoker. When I go into the store and I see the cigarette display, that doesn't encourage me to smoke. Anybody I've asked the same question to said the same thing, that it doesn't encourage them to smoke.

Mrs. Hickey: I don't agree. If I go into a store and I forget that I went there for something, and I see a picture of a loaf of bread, for instance -

Mr. Tobenstein: Yes, but a loaf of bread is something different. If you go into the store and you see a display of candy, you may decide to pick up a bag of chips or a chocolate bar. Those are impulse items. Tobacco and beer are not impulse items. If you don't smoke or drink, there is no way you're going to pick that up because of the nice packaging. I don't believe that at all.

Mrs. Hickey: If that space wasn't so valuable to the tobacco industry, why would they pay store owners to display this advertising if it didn't promote the product?

Mr. Crouch: The manufacturers are trying to encourage the consumer to switch from one brand to another. We live in a market economy, where we have companies competing against one another. They're not competing for the non-smoker out there; they're competing for the person who has already committed to the smoking decision, who has already made the smoking decision. So they're trying to improve their market share. I think everybody realizes, at the manufacturers level, that there is some profit to be made by the manufacturers. They're obviously trying to maximize their profit, which is their right in our society.

Statistics have shown that candy, as Mark has said, is an impulse item. If I see a display of candy, I may purchase it. I'm not a smoker. I've seen displays of cigarettes, but I've yet to purchase one. Peer pressure and a lot of other things may influence a smoking decision or why somebody takes up smoking, but it's not the displays.

Mr. Tobenstein: We had a survey done for our association. What we found out from the manufacturers - a lot of candy and tobacco manufacturers support us - is that the candy manufacturers want more displays and more points of sale, but the tobacco companies want less. If what you're saying is right, that people are going to start smoking because they see the cigarettes out there, why wouldn't they want more points of sale. Why would they want fewer?

Mrs. Hickey: Maybe as adults you can go in and look at the sign and tell yourself it's not promoting smoking, but I think that display helps a child or youth make a decision about smoking.

Mr. Dumulong: I think Health Canada did a survey about a year or a year and a half ago with youths. They were asked to rank what brings them to smoke, and the first item on the list was peer pressure. Advertising wasn't even part of that list. A lot of societal and economic factors would be more in favour of producing a new smoker - stress, family problems and so on. It's a societal problem. It's not simple. It's highly complex.

Mrs. Hickey: Thank you.

The Chairman: Mr. Dhaliwal.

Mr. Dhaliwal: Thank you, Mr. Chairman.

When I was a youngster pumping gas I was always told there really isn't much money in selling cigarettes, that the profit margins are very slim. One of the reasons cigarettes are sold is to bring people into the store. It's not so much for the profits. One of the reasons the tobacco industry pays people to sell them is because of the tight profit margins, and they provide them with a display to put all the cigarettes out.

What you're saying is that this will cause an inconvenience to the store owner. Right now he has a display and he has du Maurier and Rothmans and whatever. Let me try to understand this. Under this legislation they will be required to remove that display, use a reduced-size display, and maybe have the cigarettes stored in a different location.

You have the storage and the advertising all done together to make it convenient for them. What you're telling us is that under this legislation they would have to remove the present shelving and storage facility, along with the advertising. Is that what you're telling us?

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Mr. Tobenstein: They'd have to change the configuration of what they have now, because it couldn't be left the way it is. So that would be an expense. We're also saying the stores are getting money - we figure about $6,000 a year on the average - and that's helping them too. The way the economy is going, they're all holding on by a shoestring right now. What happens if they lose this money? Maybe in the long term something will happen, but how many of them are going to go out of business?

There's something else too. When we had the high contraband problem in Quebec, where 70% of the tobacco was sold in schoolyards and on the street, our retailers didn't sell any confectionery - that impulse purchase we were talking about - because no one was going into the stores.

Mr. Dhaliwal: I have one final question.

We all understand the health effects of smoking. The stats show that if you don't start smoking between 16 and 19 years, there's a 90% chance that you'll never smoke. In order for the industry to survive, it has to have new smokers. Otherwise it won't exist. I think there's a general trend away from smoking, and we hope this will continue. Has your group looked at the long-term fact that there will be fewer smokers out there? Are you trying to deal with that? What solutions do you have? Are you trying to deal with the fact that there will be fewer smokers and lower cigarette sales in the future?

Mr. Tobenstein: We've been trying for years to diversify into other products. When I started in the business over 27 years ago, we were mainly selling candy and tobacco, and some soft drinks and a few paper products. Now we're into groceries, wine, and cheese, paper products and all kinds of other products. We're trying to diversify so that in the event tobacco does go down - we're planning for that.

Mr. Dhaliwal: Thank you.

The Chairman: Thank you.

Luc and your colleagues, thank you very much. You've been helpful. If there's something further you want to say to the committee, feel free to fax us on the subject. We've had to limit the time for each because so many witnesses have wanted to appear. Again, thank you.

[Translation]

I would now like to welcome the Coalition québécoise pour le contrôle du tabac and its coordinator, Louis Gauvin, and a number of his colleagues. Welcome.

[English]

While we're making the transition to the new set of witnesses, I should mention that the clerk has been working very diligently and has put in place a list of witnesses for tomorrow morning. It appears that we will be hearing witnesses from 9 a.m. until approximately 1:30 p.m., at which time we will go to clause-by-clause analysis.

[Translation]

Mr. Louis Gauvin (Coordinator, Coalition québécoise pour le contrôle du tabac): Mr. Chairman, ladies and gentlemen, members of the Standing Committee on Health of the House of Commons, the Coalition québécoise pour le contrôle du tabac has come to tell you that 312 organizations in Quebec support the bill that was tabled in Parliament.

With me today is Mr. Mario Bujold, the director of the Conseil québécois sur le tabac et la santé. Mr. Gilles Lépine who will be with us in a few moments - he is here already - represents the Fédération du sport étudiant, Quebec City region, and Dr. Laurent Marcoux is the director of public health in the Lanaudière region, which is a tobacco-producing area.

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The Coalition québécoise pour le contrôle du tabac was created in June, almost six months ago, for the purpose of encouraging government to pass effective, strong anti-smoking legislation. At the moment, our group is made up of 312 organizations from all regions of Quebec and all sectors of society. In addition to health institutions and anti-smoking organizations, our members are also from areas such as education, young people, municipalities, environmental and community groups, and our Coalition is growing every day.

The Coalition has established a number of demands for legislation, which can be summarized in the following five points:

1) a ban on tobacco sales to minors;

2) a ban on tobacco promotion, whether advertising or sponsorships;

3) effective control over the manufacturing of tobacco products;

4) elimination of tobacco smoke in public places, the workplace and educational institutions;

5) support for smokers who want to quit.

The last two points are not covered in the bill we have before us.

Dr. Laurent Marcoux (Coalition québécoise pour le contrôle du tabac): As a public health representative, I would like to mention four points that make the situation regarding smoking in Quebec different from that in the rest of the country.

First of all, there is the issue of death and suffering. Quebec pays very dearly for smoking. According to the latest figures, smoking is responsible for the death of close to 12,000 Quebeckers every year, many of whom are non-smokers.

The second point is the number of smokers in Quebec. The latest study from Health Canada shows that Quebec has the highest number of smokers in Canada, not only among the population generally, but also, among young people aged 11 to 14 and 15 to 19, which is a most disturbing trend. The text we tabled gives the statistics that back up these statements.

The third point concerns tobacco sales to minors. Two independent national surveys carried out at almost the same time last year, one for the Office of Tobacco Control at Health Canada, the other by the Canadian Cancer Society, both reached the same conclusion: namely, that the province in which it is the easiest for young people to get cigarettes is Quebec. The study showed that the percentage of retailers who sell cigarettes to young people vary from 75% to close to 100%.

Fourth and finally, the sponsorship of tobacco products is everywhere in Quebec. Increasingly, since the Supreme Court ruling on advertising, there has been a marked increase in traditional advertising of tobacco products.

The Quebec Public Health Network therefore recognized the need for strict legislative measures that will function in harmony with other measures. Thank you.

Mr. Gauvin: Since Mr. Gilles Lépine has not yet arrived, I will speak for him as the representative of the Fédération québécoise du sport étudiant. He was going to say that he is particularly in favour of the proposed restrictions on the sponsorship of cultural events, and particularly sport events.

The sponsorship of sport events by the tobacco industry is an aberration. Sport exalts physical performance, promotes health and increases the quality of life. Smoking, on the contrary, reduces performance, destroys health and reduces the quality of life.

For all these reasons, the representatives of student sports in Quebec have chosen never to accept tobacco sponsorships.

We turn now to the bill itself. The steps it sets out are similar to those advocated by the Coalition - we stated them at the beginning of our presentation - and we see them as tremendous steps forward for public health. Of course, they do not go as far as far as we would have liked, but that does not change the fact that we support this bill.

In fact, we support fully and without reservation the spirit of the bill as described by the Minister of Health in the House of Commons and to the media. However, after reading the bill, we have found a number of weaknesses in its wording that will doubtless undermine its spirit.

We would therefore like to point out the most serious of these weaknesses and hope we can convince you to adopt the amendments that will correct the wording that runs counter to the intentions of Parliament. To the best of our knowledge, these improvements are consistent with the positions expressed by the spokespersons of all parties that commented on the bill.

We have identified a list of desirable amendments which you will find in appendix A of our brief. For the time being, we will simply mention the main improvements we are calling for regarding sponsorship, advertising and labelling.

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First of all, we are asking for a ceiling on sponsorship to prohibit the sponsorship of new events and facilities and to limit the expenses related to sponsorship to the amounts spent in 1996. This would protect events that are sponsored at the moment.

Second, we are asking for a ban on all types of promotion of tobacco products on all products other than tobacco.

Third, we are asking that advertising be restricted to what the Supreme Court considered appropriate, by removing any reference to ``brand-preference'' advertising, and by strengthening the word ``characteristics'', with adjectives such as ``physical'', ``quantifiable'' or ``tangible''.

Finally, we are asking that the restrictions on labelling be strengthened to include messages about aspects of smoking other than exclusively health-related issues, so as to prevent a possible variation the industry might concoct.

Let us start by looking at promotion, which is discussed in clauses 24 to 27. The Coalition is opposed in principle to any tobacco sponsorship but encourages the establishment of a compensation fund for events that are sponsored at the moment.

However, the proposed restrictions are an improvement, and, while allowing certain types of sponsorship, do not require a compensation fund. The context within which tobacco-related sponsorship is permitted is in keeping with what other countries already consider normal, for example the drug companies. The provisions prevent the exploitation of a sponsorship for promotional purposes that go beyond the event in question. Take, for example, the announcement of the Formula 1 Race, which is sponsored by Rothmans; it is a local weekend event, but advertising for it can be seen throughout the province all year long.

Nevertheless, there are some weaknesses that should be corrected. First, it is strange that only sponsorships for events, activities or personalities that young people find attractive or that are associated with a lifestyle are subject to the restrictions set out in the bill. It does not provide for any restriction on the sponsorship of other types of activities. The tobacco companies will therefore be able to establish an event some day that will not come under the criteria provided for in this legislation. I'm thinking of a summer solstice festival, which could be promoted through year-long sophisticated, alluring advertizing campaigns using their brand of cigarettes.

We think this concession is completely pointless. That is why paragraphs(a) and (b) of clause 24, which establish the criteria for promotional materials, as well as subclause (4) of the same clause, which allows for other types of sponsorship, should be eliminated.

In its ruling on advertizing, the Supreme Court clearly stated that ``lifestyle'' advertizing and sponsorships could be completely prohibited, but by placing restrictions on sponsorship rather than banning it, the government seems interested in dealing with the concerns of the cultural and sports events that depend on tobacco sponsorship and fear they will lose this source of funding.

Although we are prepared to accept this compromise, we would like to emphasize that this generosity will definitely be exploited by the tobacco manufacturers. They will increase the number of sponsored events and will intensify the promotion of their brands through these events.

While protecting the events that depend on industry funding at the moment, we have to ensure that the problem does not get worse with time. As a result, we recommend that a ceiling on advertizing be created to prohibit the sponsorship of new events and limit sponsorship-related expenses to the amounts spent in 1996.

The second point deals with promotion through products other than tobacco, which is covered in clauses 25, 27 and 28. The bill provides that no product other than tobacco should be used to promote brands of cigarettes. A provision of this type could prevent a manoeuvre such as the Marlboro train in the United States. That is why we are requesting this amendment.

I would now like to introduce Mr. Gilles Lépine from the Fédération québécoise du sport étudiant, Quebec City region.

There should be a ban on all new facilities or all new names of existing facilities linked to tobacco companies. The criteria defining the products for which signs are banned should be eliminated.

The third point concerns promotion and advertizing. The Supreme Court ruling suggested that the industry should be able to give customers some information about its products, such as their physical characteristics, the Ph, the percentage of tar and nicotine, ventilated filters, and so on.

The concept of ``information advertizing'' is in keeping with this approach. It authorizes the provision of information for consumers about their products, without promoting them through ideas that have nothing to do with tobacco, such as lifestyle or social success. We fully support this objective.

However, we think there are weaknesses in the bill's definition of the type of information that would be allowed. We think this definition must be strengthened to restrict the information in question while authorizing the inclusion of quantifiable, tangible or concrete physical characteristics which distinguish one brand of cigarettes from another, for example their size or nicotine content.

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The word ``characteristics'' in the definition of ``information advertizing'' should be qualified with adjectives such as ``physical'', ``quantifiable'' or ``tangible''.

In addition, any reference to brand-preference advertizing should be eliminated to prevent the use of characteristics advocated by the industry, but which could be considered real characteristics of the brand. I'm thinking of the feminine attraction of Virginia Slims, the traditional nature of Export A, the sophistication of du Maurier or the courage associated with Rothmans. Hence, any reference to brand-preference advertizing should be eliminated.

Finally, there is the question of labelling. Cigarette packages are the main components of the tobacco industry's promotional campaigns. They give the various brands their distinctive image and are inextricably linked to the advertising campaigns.

In addition, they are advertising mediums in themselves, and reach millions of smokers every day. Consequently, it is essential that the messages that appear on these packages be controlled. This should apply not only to health warnings, but also to messages which go beyond health to include areas such as the social and economic consequences of smoking, which are also significant.

Moreover, we should be trying to prevent the appearance of messages drafted by the industry, messages that would seek to offset the health warnings, for example.

That is why the reference to information on packages should not be limited to health warnings, but should be broader in scope. There should also be provision for prohibiting other messages.

I would like to add a point that is not in our brief. In the definitions, colour should be included among the tobacco brand elements. That is in clause 2 of the bill.

Mr. Mario Bujold (Coalition québécoise pour le contrôle du tabac): In closing, both the Conseil québécois sur le tabac et la santé, which I represent and the Coalition think the bill is far from being an extreme measure which would violate the Charter of Rights and Freedoms, as the tobacco industry claims.

In fact, this legislation gives the government the same power and imposes on the tobacco industry the same regulations as those imposed on the drug industry or the food industry several years ago. Both these industries, which are much more regulated than the tobacco industry, are dealing with these constraints very well.

The fact is that tobacco manufacturers have always enjoyed exceptional treatment, given the toxicity of their product. Through this legislation, the government is finally setting the record straight about tobacco and giving this product a status in keeping with its harmfulness. Do we need to remind people that tobacco kills three times as many Canadians as AIDS, alcohol, illegal drugs, highway accidents, suicides and murders combined? It is high time tobacco got the treatment it deserves. Thank you.

Mr. Gauvin: Mr. Chairman, we apologize for going over our time a little.

The Chairman: Thank you very much. Mr. Antoine Dubé will start the questions.

Mr. Dubé: I would like to start by congratulating you on your brief. You presented a summary, but I looked through your analysis quickly, and through your proposed amendments, and I noticed that despite the brief time you had, you did a very good job.

I would like to mention once again that the Official Opposition, the Bloc Québécois, voted for the bill at second reading, because in second reading, we were voting on the objectives of the bill. We have some reservations, and we will mention them during the clause-by-clause study. You know we have some reservations about sponsorship.

Moreover, I get the impression that you are not insensitive to the money that sports and cultural events could lose. You are not insensitive to this, because you suggest that a compensation fund be established with the financial support frozen at current levels. That indicates that you are not unaware of the problem.

You acknowledge the resulting disadvantages for the victims, to use your terms, but at the same time, you know that the government has said on a number of occasions - and the Minister repeated this on Friday - that it did not intend to provide compensation. The Minister of Canadian Heritage also said that she did not intend to provide compensation.

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We will see what happens at third reading, but that is a fact we cannot ignore. Thus, given the firm position of the government at the moment, will you maintain your position? You are assuming that the government will accept your proposal, but that will not be the case. Do you maintain your position nevertheless?

Mr. Gauvin: In fact, Mr. Dubé, our recommendation is not directed at the government. It is a response to the threats by the industry. The industry said that if the restrictions on sponsorship were maintained, it would reconsider its investments in sponsorship. Mr. Andy Nulman and the gentleman representing the Formula 1 race came to tell us that their events scheduled for next summer could be in danger. You heard that as well as I did, this morning.

Our answer to these groups which expressed their concerns is that, in order not to penalize them, we are suggesting that the government amend the regulations to provide that the industry may continue to subsidize existing events. However, once the bill is passed, there would not be any new sponsorships. We think this would be an acceptable compromise.

We are not asking the government to set up a compensation fund. We say that the current funding for events could be authorized provided no new events are added. Consequently, we recommend that there be a time restriction on sponsorship, that there not be any new events sponsored and that there be a ceiling on the amounts invested by the industry. We think this is an attractive compromise.

Mr. Dubé: I am with you in this search for a compromise. We will see what happens later on.

You added a final point which I found very interesting. I, together with the Official Opposition, agree with you fully on this matter. I am referring to the support for smokers who decide to quit. We can go much further than what the government is planning to promote the quality of life enjoyed by non-smokers.

My next comment is perhaps for someone from the world of amateur sport. As I was saying before, an olympic athlete, such as Mr. Bailey or Mr. Surin, definitely does not smoke. So-called ``amateur'' athletes also benefit from sponsorships. I don't know whether any of them accept tobacco sponsorships. Mr. Villeneuve does not smoke, nor does Céline Dion and so on.

You are aware of the fact that the government has developed a positive enough approach with respect to the benefits of not smoking. I've done some running, not a marathon, but the ten kilometres, and I knew that smoking was not compatible with running. I think people should notice how paradoxical it is that the government is cutting all grants to amateur sports, to many olympic disciplines. For example, Myriam Bédard has a great deal of difficulty getting financial assistance to go and represent Canada internationally. Don't you find this approach rather contradictory, Mr. Lépine? Are you as aware of that as Mr. Gauvin is of the issue of sponsorship?

Mr. Gilles Lépine (Coalition québécoise pour le contrôle du tabac): I am just as aware of the issue, sir. There are two paradoxes here: on the one hand, we are trying to educate our young people, and you know how difficult that is sometimes. We invest the little money we get from the government or from other financial supporters. In student sport and in many schools I represent, we are trying to educate young people to a better sports ethics, better health, a better philosophy, but we try to do so with the resources we have.

If companies have thousands of dollars to spend to portray an attractive image of smoking, conveying the message that smoking will make you seem older, or improve your image as an adult, I think that trying to fight against that is like trying to fight against Goliath.

I understand the tennis people. I'm a tennis lover myself. I understand what can go on. If, on the one hand, I value some tennis players who are sponsored by firms like du Maurier or Players for the duration of an event and, on the other hand, I project a very positive image for cigarettes, I am neglecting those people.

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At the end of the day, even if it's said that the hostages, the sponsored organizations, are being dragged to the stake, I would not want to forget those 13,000 Quebeckers who die of this each year. If there are 32 people dying as we speak and if, by trying to limit this image of the cigarette as a normal thing we can decrease this number by a few lives, that would already be progress. That's what we have to fight for.

If I'm working for ethics in sport and, on the other hand, hockey encourages fighting, I have problems convincing the kids to stop fighting. The same thing goes for cigarettes. I can work for health all I want, but if on the other hand all this is presented as normal and the kids watching TV see the Just for Laughs festival or... I am sorry, gentlemen, if I've been rattling on.

Mr. Dubé: I don't think your support -

[English]

The Chairman: I'm sorry; you're well out of time. We do have to leave some time for others.

Mr. Hill indicated he'd like to ask something, but he's not here. Is there anybody else? No?

Okay, go ahead.

[Translation]

Mr. Dubé: You have another element in your summary, point 4, which is eliminating tobacco smoke in public areas. What do you mean by public areas? Is that what Quebec seems to have forgone, especially with bars and restaurants?

Mr. Gauvin: Of course, that's not part of the goal of this Act. The government already has laws concerning public areas, whether they're government areas or others.

To answer your question specifically, our platform, for Quebec at least, is to broaden the definition of ``public areas'' to include any and all areas accessible to the public whether restaurants, schools or hospitals. You know as I do that it's possible to smoke in schools and hospitals even under the present non-smokers' protection legislation. That is actually happening as we speak. That was the objective of the platform but specifically for Quebec.

Mr. Dubé: You won't mind if I raise one last point. I'm a member of a federal Parliament that, two years ago - I was critic for youth at that time - passed provisions to limit the use of tobacco by youth.

There was also legislation prohibiting smoking in federal buildings and this legislation is still in force. In these Parliament buildings, right where you are - you have to realize that life is sometimes full of contradictions - there are no areas set up for smokers inside which means that everyday and many times a day, I see people going outside, staying outside in minus 30 degree weather which might lead to health problems. I find that contradictory.

It's that way because, however it's done, the legislation isn't totally enforced. I am not saying we should encourage smokers, but they do exist and they'll keep on smoking. Doesn't non-enforcement of the legislation also concern you?

Government proposes legislation but, basically, it doesn't bother having it enforced. You yourself have told us that 75% of all corner stores in Quebec are still selling cigarettes to children under 18 without any problems. Doesn't that worry you? You can legislate all you want, but if there's no education, if there is no solidarity or cohesion which means that the general public as a whole agrees on the legislation, then finally it won't be honoured. I find that this goes in the same direction as the others and it probably won't be completely enforced.

Mr. Gauvin: You're quite right, Mr. Dubé. Quebec has legislation to protect non-smokers. Last year, people were asking us if it was still in force, because they weren't hearing anything about it anymore.

The important point is implementing and enforcing the Act. In any case, in Quebec, over the last few months, the federal Department of Health has been proceeding with inspections and it would even seem that they are handing out fines. We can feel a movement or an awareness right now in the ranks of the merchants and retailers of tobacco products who know that the Department of Health is becoming more and more vigilant in this area. So we can feel that the legislation is doing its job of educating.

Mr. Dubé: Do you sincerely think that 40 federal inspectors will be enough to enforce the law across Canada?

Mr. Gauvin: I couldn't really answer that question, Mr. Dubé.

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Mr. Chairman, I would like to add some information to a question Mr. Dubé has already put several times to preceding witnesses concerning the link between sponsoring and the consumption of tobacco by youth, if you don't mind.

The first thing is that if no study has been tabled, it's probably because studies that would establish a direct link between the presence of a young person at a cultural event and the fact that that youth will start smoking doesn't exist. On the other hand, presumption does exist. The Supreme Court recognized that in its judgment, Mr. Dubé, and I would go so far as to ask you to refer to it. When it talks about changing behaviour, the Supreme Court tells us: In the area of changing behaviour, we're not asking for the kind of evidence that we can ask for in other cases because that evidence is extremely difficult to obtain, but one can expect that the link that can be established using common sense, reasoning and logic in this case may prevail.

I would be very astonished if the tobacco industry, in this matter, were the only industry in the world not to obey the laws of marketing. Any industry in the world knows what kind of a return they get from their present and future consumers thanks to their sponsoring. Sponsoring consolidates your present consumers and gets you new ones in the long term. Sponsoring is not something that gives immediate results.

I would just like to remind you that 90 per cent of all smokers are faithful to their brand. People who smoke or who have smoked know this. Generally speaking, they stick with their brand and 80 per cent of the people who start smoking are under 18 years of age. Those kids who start smoking, you have to recruit them somewhere.

I wanted this point of information on the record, Mr. Chairman.

[English]

The Chairman: We want to thank the witnesses from the Coalition québécoise pour le contrôle du tabac.

Thank you so much for coming today. Your evidence has been helpful.

Since we are ahead of time, we're actually going to take a three-minute break.

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The Chairman: We're now going to resume the sitting. We welcome the president of the Canadian Tobacco Manufacturers' Council, Robert Parker, and some colleagues.

Bob, maybe you'd introduce yourself and your people and then give us a statement, but give us some time to put some questions to you.

Mr. Robert Parker (President and Chief Executive Officer, Canadian Tobacco Manufacturers' Council): Thank you, Mr. Chairman.

My name is Robert Parker. I'm president and chief executive officer of the Canadian Tobacco Manufacturers' Council, or CTMC, which is the industry association for Canada's three major tobacco manufacturers: Imperial Tobacco, Rothmans-Benson & Hedges and RJR-Macdonald.

With me are Marie-Josée Lapointe, director of communications for the CTMC, and Mr. Colin Irving of McMaster Meighen, a lawyer specializing in constitutional law who has been retained by the industry.

I will try to summarize as quickly as I can our main objections to Bill C-71 and to the process surrounding it, and then I'll ask Mr. Irving to speak briefly to the legal and constitutional issues raised by the bill.

At the outset, I want to make the industry's position absolutely clear. There are health risks associated with smoking. For that reason we believe the decision to smoke or not to smoke is one for informed adults to make. We will support, as we have over the years, any reasonable and workable proposals to discourage smoking by under-age Canadians and to limit their access to tobacco products.

I want to make seven points about this bill and what the committee and Canadians have been told about it.

One, it's been stated that the introduction of this bill was preceded by full consultations with affected parties, including this industry. That simply is not true. On behalf of the industry I tried on numerous occasions over the past year to arrange meetings with the minister on the main issues of this bill and their practical impacts on the industry. Those efforts were unsuccessful.

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You have been told that this bill respects the decision of the Supreme Court of Canada in striking down the TPCA. In fact, the bill contradicts the recent ruling and is unconstitutional in several other ways. Mr. Irving will speak to those points in particular.

You have been assured that Bill C-71 is not a total ban on product advertising. Our preliminary legal advice is that in fact it puts a legal chill on any such activity. Last week Health Canada officials themselves could not provide us with a single example of an advertisement that might be approved or a publication that would qualify under this legislation.

You have been told that the intent is to preserve tobacco company sponsorships of cultural sports and community events. Yet the bill creates conditions and, most importantly, so much uncertainty that cancellation is virtually guaranteed for many of these sponsorships, along with the millions of dollars and thousands of jobs they create.

On that point, Mr. Chairman, I'd like the record to be clear. If these events are in fact ended or significantly diminished, it will be Bill C-71 that did it, not the tobacco company sponsors or event organizers. We want those events to survive.

This bill is an extraordinary abuse of regulatory power. Fully 19 key areas of the bill delegate away from Parliament virtually complete control of what is permitted and what is not permitted in five associated industries and all of their suppliers and put it in the hands of unelected officials and cabinet. We believe that is absolutely unprecedented.

The bill promises chaos if it takes effect. At the same meeting I referred to earlier, less than 48 hours after the bill had been tabled for first reading, Health Canada officials told us that in several important areas it does not mean what it says. It contains no transition provisions; it depends at every turn on regulations that no one has seen; it threatens absurdly heavy fines and even imprisonment to people who cannot know with precision what is permitted and what is prohibited.

Most important of all, there is not one scintilla of direct evidence that the bill will be successful in achieving its stated effect, which is reducing the consumption of tobacco. To put it bluntly, the rhetoric says one thing and the bill says another. No factual evidence has been given to you or to anyone to explain how this bill will accomplish its announced objectives, but the facts of the past decade in regard to smoking prevalence among Canadians tell us first that oppressive legislation does not work and has not worked, and secondly, that every single forecast to the contrary has always been wrong.

While it will not reduce smoking, Bill C-71 will cause extensive harm: thousands of jobs and hundreds of millions of dollars lost.

Mr. Chairman, we appeared before this committee two years ago on the specific issue of plain packaging of tobacco products. You deemed that subject worthy of 8 days of public hearings over a month, with more than 37 witnesses appearing and sufficient time to prepare a thorough brief. It has now been concluded that, as we told you then, plain packaging would be illegal and unworkable.

Today, on the basis of an hour's debate in the House of Commons and less than two days - it's actually three because of the change this morning - it says here that you plan to approve tomorrow not just the policy suggestion, but actual legislation that is equally illegal and unworkable and far more complex and confusing.

At this point, we have no amendments to offer to you. We simply have not had sufficient time to study and analyse a very complex bill, to consider its implications, and therefore to decide what changes might be possible to correct a proposed law so flawed in so many important respects. We would need adequate time, at least ten days, to do that. Given the fundamental issues at stake, we do not believe that is too much to ask of the committee, especially when it will take months for the consequential regulations to be drafted, approved, and published.

Finally, Mr. Chairman, I'd like to return to the reason we're here today, which is the decision of the Supreme Court in September of last year to overturn the advertising ban and related sections in the TPCA. We might have thought that Parliament would have heeded the words of the majority opinion. Freedom of expression, even commercial expression, is an important and fundamental tenet of a free and democratic society. If Parliament wishes to infringe on this freedom, it must be prepared to offer good and sufficient justification for the infringement and its ambit. This it has not done.

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I would submit to you, as we begin with a new piece of legislation banning advertising, that this has not been done.

I would now ask Colin Irving to comment in more specific terms on the legal and constitutional aspects.

Mr. Colin Irving (Lawyer, McMaster Meighen): Mr. Chairman, I will say right at the beginning that, having only had this bill for a rather short time, anything I say is necessarily somewhat preliminary. It's a very complicated piece of legislation. It takes quite a long time to read it with any degree of understanding. The drafting in many places borders on the incoherent. I simply underline what Mr. Parker has said. This is very swift dealing with a rather complex piece of legislation.

In my opinion, there are three areas in which it is open to very serious legal questions. The first is that there is a principle in Canadian criminal law that when a crime is created, it must be drafted in language that people can understand. You'll easily understand why that should be. Criminal law carries very serious consequences. People must know when they are breaking the law and when they are not. In this case, there are several areas in which crimes that could lead to imprisonment or heavy fines are committed, and it's almost impossible to understand what is really meant.

Let me illustrate with one or two examples. There is, as you all know, a ban on all forms of tobacco advertising in the bill, subject to a permissive clause, which is clause 22. This allows certain categories of advertisements in certain categories of publications or in mailings. Those exceptions do not apply - and I'm reading now from subclause 22(3). These exceptions do:

not apply to life style advertising or advertising that could be construed on reasonable grounds to be appealing to young persons.

Let me just underline that:

advertising that could be construed on reasonable grounds to be appealing to young persons.

The result of that is that if a poster is put up in a bar in which young people are not permitted by law to be present and that would therefore be within the exception... If it could be construed on reasonable grounds that it was appealing to young persons, the person who has put it up has committed an offence for which they face two years imprisonment for every day the poster is there and a $300,000 fine. I think everybody here can decide for themselves whether any advertiser could ever make a decision that they were or were not within that section.

Just to illustrate it - because I was involved in the challenge to the TPCA... The witness from the Government of Canada who came to that trial to speak on the motivation of adolescents told the court - and this was the view of the government - that although ads directed at young people were a terrible thing, the most awful were ads directed at adults, because young people wish to emulate adults and all adult advertising is particularly appealing to children. So if that evidence had been accepted, any ad for any adult in any place has become a very serious crime.

There is more. You will see that if the advertising is considered to be ``a lifestyle'', it is also not within the exemption. I don't know whether you all have the bill in front of you, but in subclause 22(4) there is a paragraph in which there is a definition of lifestyle advertising. It means:

advertising that associates a product with, or evokes a positive or negative emotion about or image of, a way of life or an aspect of living such as glamour, recreation, excitement, vitality, risk or daring.

Who is to know what is likely to evoke a positive or a negative emotion? We are in a very subjective area. It evokes a positive or negative emotion in whom? In how many people does it evoke the emotion? Is it in a majority of people or in one or two people? What is a negative emotion about a way of life or an aspect of living?

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This section, I would submit, is incoherent, but one thing about it is that you will never know whether you're infringing on that provision or not.

That same definition carries over into the promotion section, into the sponsorship section, where in paragraph 22(4)(b) it says the restrictions on sponsorship apply where the event or whatever is associated with:

a way of life or an aspect of living such as glamour, recreation, excitement, vitality, risk or daring.

You might want to ask what event any of us could conceive of that is not associated with some aspect of living? So that's the first area. There is the principle of void or vagueness, and in my submission this is such.

Second, there is the Supreme Court of Canada judgment in the TPCA case. That judgment established that a total ban on tobacco advertising was unconstitutional.

The language of Bill C-71 would seem to indicate that something less than a complete ban is being put forward, that there is a form of regulation. But when you read it carefully - the courts don't look at the language exclusively; they also look at the real effect of the legislation - the real effect of this is to ban all forms of advertising. Bearing in mind the risk of criminal sanctions, no one could find a way of putting an ad anywhere that wouldn't be at serious risk under the lifestyle advertising definition. Who can tell what is going to create an emotion?

I am not aware of any precedent in this country for Parliament simply re-enacting a ban that the Supreme Court of Canada, which is our highest court, has declared to be in violation of the Charter of Rights, which is part of the Constitution, which itself is the supreme law of Canada.

There have been suggestions that the Supreme Court decision simply resulted from an absence of evidence, but I invite anyone to look at the record of that case. There were 70 days of trial in the court in Montreal. The Government of Canada brought witnesses from all over the world to give evidence. They said the same sort of thing you find in the studies that have recently been released. There is nothing new. It's the same evidence.

Finally, the third area is that of jurisdiction. The TPCA was upheld as being criminal law and therefore within the jurisdiction of the Parliament of Canada. This statute, as you've already heard, is replete with regulation-making power. It is really a regulatory statute, and without going into a lot of detail, it even envisages equivalency agreements with the provinces and would let the federal government walk away from it, to the extent that there is similar provincial legislation for the whole statute, except for those areas where there is an absolute prohibition. But the criminal law can't be turned over to the provinces.

This statute comes much closer to being an attempt to regulate a specific industry, which has always been held to be a provincial matter in Canada, or simply to be dealing with the regulation of advertising, which is also a provincial matter. So on that third ground, that of the jurisdiction of this Parliament, there are serious doubts as to the validity of Bill C-71.

Thank you, Mr. Chairman. Those are three areas. I've tried to deal with them as briefly as possible.

The Chairman: All right. We have about 12 minutes for questions. Make it brief, please.

Mr. Dubé.

[Translation]

Mr. Dubé: As we must be brief, I will reread the brief you prepared as well as the questions, especially Mr. Irving's, whose competence everyone recognizes because he was involved in the preceding case.

My question doesn't have to do with that. There have been no consultations and the government seems to be firm in its intent to push ahead quickly. However, I would like to get back to this matter of percentages, the famous 10 per cent written into the bill. It's not found in the regulations, but it is mentioned in the bill.

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When I asked the Minister if you could decide to multiply the four by eight foot panel by ten to wind up with the present surface, he answered: ``Oh, no, no''. The official with him told us there would be regulations to prevent this.

I'll pretend I'm a little amateur minister. Suppose there's a regulation concerning the 10 per cent, although I've never seen such a 10 per cent limit in any legislation, in any country. It's the first time I have heard about this.

The companies and the anti-tobacco coalition representatives are sensitive to the financial losses that the cultural and sport organizations will be undergoing when they lose their sponsorship. In other words, it seems to us that... [Inaudible - Editor]... is looking for a compromise on the 10%. What percentage would tobacco companies find acceptable to continue sponsoring events? Could you answer that?

[English]

Mr. Parker: It is impossible to answer about any single restriction in isolation, Mr. Dubé. The code that the industry now has specifies a maximum of 25% of the ad space, and at no time may it be bigger than the name of the event. Along with the size of the ad there's the question of the size of the sign, which is to be specified by regulation. The definition of the site is to be specified by regulation. The number of signs on the site is to be specified by regulation. The contents of the ad, which have been included in the bill, are subject to a set of definitions that we think is uninterpretable. We think a lawyer would look at this and say to a company or to an event, you cannot be sure that you can put on this event, run that ad and not go to jail for it. So there is a chill effect.

We would be happy and have been begging the Minister of Health for a year - this one and his predecessor - to sit down and say what kind of restrictions you want. If 10% - I believe the minister said that was arbitrary - had been suggested to us, the industry would have considered it. It sounds small to me, but they certainly wouldn't say we must have 50%. The purpose of these ads is to promote the event. We've had no discussion about it, which we would welcome. We have to cover all of the areas. We can't do it piecemeal.

[Translation]

Mr. Dubé: I understand. It seems to be that you yourself spelled out that the code of ethics is applied on a voluntary basis by your members in that respect and that it provides for a 25% limit. So if ever the minister or the members across the way were to accept the status quo on the 25% limit, you would be sort of forced to say that the minister is right because that's specifically what you are doing in honouring your code of ethics. You are presently limiting yourselves to 25%.

Ms Marie-Josée Lapointe (Director of Communications, Canadian Tobacco Manufacturers Council): We're talking about a 25% limit within the framework of a series of restrictions that are reasonable and allow the industry and event organizers to promote the event and represent the brand name reasonably. In my opinion, we can't discuss this separately from all the other factors.

Mr. Dubé: Agreed. One last point.

[English]

The Chairman: We're out of time. I'm sorry.

[Translation]

Mr. Dubé: If there's any time left, I'd like to come back with another question later.

[English]

The Chairman: Dr. Hill.

Mr. Hill (McLeod): Thank you, Mr. Chairman.

Mr. Parker, in your opening comments you said you would support any reasonable efforts to prevent under-age smokers from getting at the products and that the companies you represent don't go after those youth. I have an internal document in front of me that talks about the objective of going after sponsorship for a specific sporting event. It's from one of your companies.

This particular objective says:

...the events we sponsor via media advertising so as to increase the level of awareness particularly amongst smokers and potential smokers, -

- and I underline that -

...of our (Trademarks's) association with major world class sporting event and artistic productions.

Off to the side of that there's a little note that the target groups are males age 12 to 14 years, and below that, females age 12 to 17 years.

Can you explain to me how targeting those youth does not directly countermand what you said originally?

Mr. Parker: Obviously, I would like to see a copy of the document, and I'd like to see certification that the note was written by a tobacco company executive. Many documents of this kind were selectively quoted from during the TPCA case.

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Could I ask Mr. Irving to respond?

Mr. Irving: The quotation looks familiar, because during the course of the trial there was a document that said something like that. It turned out, however, that far from being a company document, it was something from a research group somewhere out of the country that was producing some suggestions that were not followed up or accepted by the company.

I don't know what document it is, because Dr. Hill hasn't said, but that language is familiar to me, and I strongly suspect that's where it comes from. I know no other, and I certainly know that RJR-Macdonald, whom I represented, has never dealt with anybody under the age of 18 under any circumstances.

Mr. Parker: I might add, Dr. Hill, that there is a Canadian academic who has made something of a career of suggesting the industry targets youth. He appeared before this committee on the issue of plain packaging. He spoke to many of the same issues that he spoke to under oath during the TPCA, and what he told this committee was significantly different from what he said under oath - significantly. We'd be happy to provide you with chapter and verse on that if you're interested.

I don't know if that's one of Mr. Pollay's exhibits, but we'll send the material to you.

Mr. Hill (Macleod): Your suggestion, then, is that these internal documents, this type of approach, is not the approach of the companies you represent.

Mr. Parker: No, sir.

Mr. Hill (Macleod): Thank you.

The Chairman: Andy Scott.

Mr. Scott: Thank you very much, Mr. Chair.

I want to thank you for the admission at the very beginning about the health consequences of smoking.

Mr. Parker: It's not an admission, Mr. Scott. We've been saying that for years. It's an established fact.

Mr. Scott: I appreciate your repeating it; that's my point.

Is nicotine addictive?

Mr. Parker: If you can give me a workable or meaningful definition of ``addiction'', I'll be happy to respond to the question.

Mr. Scott: You can take it any way you want, with your understanding of what addiction is.

Mr. Parker: Well, all right, let me tell you.

What I do know about it is, first of all, there is a continuing scientific disagreement about what constitutes addiction and what does not, as opposed to habit-forming. I know one of the key areas of that is pharmacological intoxication - in other words, the kind of behaviour that leads you to be very worried if the driver behind you is drinking as he goes down the highway, but not terribly worried if he's having a cigarette. The same is true of the pilot who might be flying your airplane.

I know some smokers find it intensely difficult to quit smoking. I have on some occasions when I've quit. I know others find it very easy, and I've also had that experience.

I know there are 6 million former smokers in Canada, 95% of whom quit without any kind of outside assistance, such as the patch, therapy, hypnosis or any of the various methods available. And there are seven million current smokers, some of whom are quitting as we speak, and there are other people who are starting. I simply can't agree that the seven million who still smoke are somehow different, physiologically, physically or mentally, from the six million who used to smoke and have stopped permanently.

Mr. Scott: It would be very difficult for us to come to terms with what's an appropriate strategy if we believe, as I do, that it's addictive and you don't. That's my only point.

My question has to do with the motivation. I think we all agree that the tobacco companies aren't sponsoring the arts programs in my community independent of the business interests involved in terms of the advertising that results. Consequently what I need to understand is, if there is no new smoking associated with it, why are they advertising?

Usually the answer I get - and I'm assuming I'll get it again - is they're fighting over market share of the existing smoking community.

Mr. Parker: That's right.

Mr. Scott: But if we applied a ban on all advertising, then they wouldn't have to spend money advertising against each other. This is the one flaw in that logic that I've failed to come to terms with.

Mr. Parker: Let me speak briefly to that, and I think Mr. Irving has a point to make.

In any one year, 10% of the smokers in Canada switch brands. A 1% market share is worth $22 million per year in gross revenue to the company that wins it or loses it. They spend on advertising to defend the brand share they have and to go after the other fellows'.

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When competition between the three companies was sharply limited under the TPCA - in fact it virtually disappeared, except for their sponsorship activity - one company gained between 10% and 15% in market share as a result.

They want the freedom to compete for the business of adults who have decided to smoke. We cannot find any evidence, nor has the government presented any evidence, that there's a connection between that decision and these kinds of marketing activities.

Mr. Irving: Mr. Parker has pretty well made the point, but there are economists who will tell you and who have told us that if you take away competition in the form of advertising for products that are reasonably undifferentiated, what will happen is the company with the largest market share will inexorably increase that market share, and the smaller ones will lose out simply because of the presence in the market of that other brand, and that's exactly what happened in the six years.

Mr. Scott: If this is all based on business practice, whoever has the biggest market share should support a ban. Why don't they, unless it's new business?

Mr. Parker: Well, at the time the theory worked. We know it worked while the TPCA ban was on.

I'll tell you another theory related to price versus consumption. Everybody believes there's an inverse relationship: the higher the price, the lower the consumption. We had almost ten years of very high taxes, rising and rising. Then in five provinces two years ago they came down sharply.

I'm sure you've heard claims about what happened to smoking while taxes were high and what's happened since. Well, there's what the record shows over ten years. And these are Statistics Canada numbers.

Does this prove there is no connection between price and consumption? No. What it proves is that for this ten years it was a much smaller connection - to the point of invisibility - than anybody had ever dreamed possible. So that large company isn't sitting back and saying, ``During that seven years we did all right, or was it because of our sponsorship activity? We can't do that any more under this bill.''

They're very concerned about the ability to compete, to do what they can to defend their current customer loyalty and gain more. That's as true of the largest company as it is of the smallest.

The Chairman: Thank you.

We're out of time, except I'd like to entertain a brief intervention by Harb Dhaliwal, please.

Mr. Dhaliwal: I have one quick question, and I understand the timeframe.

I know you indicated in your presentation today a concern about smoking, but does your association see smoking as a serious health problem in Canada?

Mr. Parker: The statistics on health risks from smoking have been talked about extensively by the minister and by other groups throughout the presentation of this bill. There are significant differences depending on who you're listening to, but the question of whether or not there is a risk to health from tobacco consumption is not anything we are here to argue about.

What I would say, sir, is that the minister said this bill is about health because of those risks, and I would agree, if this bill changed behaviour. But we can see no evidence, and none has been presented, that it will change behaviour. There is lots of evidence that it will lead to the cancellation of major events, for example, or that we will be entirely prevented from advertising at all because of the lack of clarity and other problems. But if it does not change behaviour, why is it being done?

Mr. Dhaliwal: Well, I guess the proof will be in the pudding at some time in the future, but as someone from business, you can do two things. If you recognize the problem, you can try to do something about it, or you can sit on the fence and not do anything.

As a government, we see this as a serious problem and we want to deal with it. It's better than having no action at all. It's better to put a proposal forward. It may not be the panacea, it may not be the best solution, but at least we're attempting to deal with the problem, which we see as a serious problem.

Mr. Parker: I'm not questioning either the seriousness or the aims of members of Parliament or of the government. It is the efficacy of the strategy, because that's the result of the last ten years of high taxes, a complete ban on advertising and a great many other measures.

I'd be happy to pass this around if members are interested.

Mr. Dhaliwal: Thank you, Mr. Chairman.

The Chairman: Thank you.

We thank Mr. Parker and his colleagues from the Canadian Tobacco Manufacturers' Council for their testimony, which I'm sure will be helpful to us in arriving at our conclusions.

Now we go directly to representatives of the Canadian Cancer Society, our next group of witnesses. I'm pleased to welcome Ken Kyle, the director of public issues.

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Ken, maybe you could introduce your colleagues.

Mr. Ken Kyle (Director of Public Issues, Canadian Cancer Society): Thank you, Mr. Chairman.

Lyne Deschênes is a researcher with the Canadian Cancer Society and Rob Cunningham is a senior policy analyst who's been working full-time on the tobacco file. He's also the author of this book Smoke & Mirrors: The Canadian Tobacco War, which some of you may be familiar with.

Our presentation will be very brief. We want to leave lots of time for questions.

Mr. Chairman, we're here to support this bill designed to control the products of an industry that has been such a disgrace to our free enterprise system. We have three main sectors in this country: private, government, and the voluntary sector. The voluntary sector, including groups such as the Canadian Cancer Society, can do some things like public education programs and research, but only the government, on behalf of all of us, can control a multibillion dollar industry that is engaged in predatory marketing practices.

One thing we've learned over the years is that education for our youth or for anyone is not the answer. Education alone will not do the job; we need to have government regulation as well.

Non-smokers don't want their kids to smoke and many of them, of course, have tried to quit. We have groups in this country, such as women with breast cancer, who can organize and get out there and march. They can do their thing and raise funds for breast cancer, but we're here to represent the individuals and the families of those who can't do that because 95% of people who get lung cancer are very sick and they don't last very long. Lung cancer is no laughing matter.

Mr. Chairman, there's no freedom in addiction or in a cancer ward or in the chronic care facilities of any of our hospitals.

I will now turn the time over to Lyne and then to Rob.

[Translation]

Ms Lyne Deschênes (Researcher, Matters of Public Interest, Canadian Cancer Society): Tobacco addiction is a real public health problem. It kills more people than any other avoidable cause of death. Forty per cent of deaths attributable to the use of tobacco are caused by cancer.

We should point out that lung cancer is the main cause of death by cancer in Canada and that 85% of all lung cancers have something to do with tobacco consumption. Is it useful to remind you that the chances of survival for anyone diagnosed with lung cancer are one out of ten and that chances for survival are three out of four for breast cancer and five out of six for prostate cancer? The situation is alarming. Tobacco addiction is on the increase in the 15 to 19 years of age group. The Canadian Cancer Society can't just wave a white flag and that's why we're here today.

I will now give the floor to Rob Cunningham.

[English]

Mr. Rob Cunningham (Senior Policy Analyst, Canadian Cancer Society): Thank you. I will be brief to allow the maximum opportunity for questions.

I'd like to do two things, principally to highlight some aspects of our written submission that you all now have in English and in French. First I'd like to respond to some of the testimony you just heard from the Canadian Tobacco Manufacturers' Council.

First we heard that there was $22 million in gross revenue per market share point. Well, Imperial Tobacco spends more than $100 million per year on marketing. If you look at their profit, assuming that gross revenue does not mean profit, if they have $10 million of profit per market share point, that means they need to get a 10% increase in market share to pay for their marketing expenditures. In a very good year they get a 2% increase in market share.

We've heard that they're going to increase market share anyway if there's a ban on advertising because they're the dominant company and because, as it turns out, they have a very high market share among teenagers. As people age, their market share will grow some more.

Dr. Hill mentioned one document on youth targeting. In my book there are numerous documents, specifically Imperial Tobacco documents, pointing out how they are targeting people who are under age. After looking at these documents, the Supreme Court of Canada in a majority concluded that the industry targeted youth.

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We've heard statistics that smoking has not gone down. On page 16 of the book, there's a graph based on industry sales data, including contraband. Per capita consumption between 1982 and 1993 decreased by 40% in Canada. During that period we had higher taxes, advertising restrictions, smoking restrictions, package warnings, and so on. That is irrefutable.

The industry said it had no time to prepare amendments. Our brief essentially consists of amendments for your consideration. We've done our best to review the bill and to attempt to provide suggestions and recommendations as to how the bill can be improved.

There's a series of amendments, some of which are more important than others... I'd like to focus on just a couple. Sponsorship advertising is an area very much of concern to us, and you've heard testimony in that regard before. The World Health Organization recommends a ban on sponsorship advertising. The governments and legislatures of New Zealand, France, and now the United States have banned sponsorship advertising. After their review of the evidence, they concluded that this was a good thing to do for public health. We agree with those conclusions.

The Supreme Court of Canada, in examining the justification for restrictions on marketing, felt that there was sufficient justification to ban lifestyle advertising. Sponsorship advertising is pure lifestyle advertising. There's no product information. In that respect, I'm happy to rely on the authority of the Supreme Court.

What are our recommendations? There's concern about protecting existing groups. So let's have a grandfather provision. There will be no new events. Let's also have a provision that has an expenditure cap. We'll protect it, but you will not be able to increase the amount of money that you spend so that you can put even more money into the avenue that's left open.

I will distribute to members of this committee a lifestyle ad that appeared in Time magazine last week. Here you have du Maurier on about the bottom 10%. Maybe it's 12%. They can make a slight adjustment. This is an example of something in which 10% is very much lifestyle advertising. I'll pass that around. I'll give that to the clerk.

With respect to labelling, we would like to recommend that the committee expand the scope of the provision dealing with labelling on packages. There is authority now in the bill to require information, but certain things are not possible, such as a quit line, information about alternative nicotine replacement products, quitting tips, and so on.

With respect to the exceptions to the advertising ban, we would urge you to ensure that it refers to tangible product information. Mr. Irving, in his testimony, indicated that this bill really had a de facto ban on advertising. You could not have any advertising without knowing whether you were violating the law or not. You could have factual product information.

There is no doubt that factual product information is permitted by this bill, and the essence of our constitutional protection of commercial freedom of expression is the communication of information and consumers receiving that. That was at the heart of the majority's judgment.

The communication of information will be continued. In this regard, we'd like to recommend... It's unusual for a health group to recommend a new exception to an advertising ban. We have in there a small suggestion to permit information binders at point of sale, subject to regulations, in which they could have factual information. There's a rationale as to how this would help in a constitutional defence of litigation. It is a small exception, but it responds directly to some of the concerns that have been raised by the industry. I urge you to consider that.

I'd welcome your questions.

The Chairman: We'll hear from Mr. Dubé, Mr. Hill, and then Mr. Dhaliwal.

[Translation]

Mr. Dubé: Mr. Cunningham, the appearance of the French version of your book has not yet been made possible so I have not been able to read it as quickly as I would have like. However, my assistant who has a better command of English than I reported to me on it. It's the first time we've seen an element that can lead to a conclusion. It's really a historical perspective of all attempts at legislation and regulation that have been made in Canada. You also mentioned the experience of other countries.

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But there have been other attempts at legislation and I won't go as far back as Noah's arch. I'll only mention those concerning the use of tobacco by young people. Although a bill was passed two years ago, we were told this morning that in Quebec, 75% of all retailers don't respect it. I thought it was 50%. Of what use is any legislation if it's not enforced? Will 40 federal inspectors be enough to enforce a piece of legislation requiring the production of an ID card?

Mr. Cunningham: In this country, we have had federal laws that prohibit the sale of tobacco to youth since the first part of the century. Perhaps we should be looking at a monitoring system to ensure that retailers don't sell tobacco to youth, maybe a more efficient system, something like the one used in the States where some jurisdictions have a success rate somewhere between 90 and 100%.

Mr. Dubé: How do they do this?

Mr. Cunningham: If the retailer doesn't respect the regulation and neglects to ask the young person for an ID card, a ticket is issued or a fine is imposed and this could be a prohibition to sell for a week. The retailer is thus made more aware, through the use of economic sanctions, that it is necessary to enforce the law. Major newspapers report that this system which is in use in Florida and near Chicago requires very few resources and can translate into a huge success. B.C. and Ontario have only started using this system during the last ten months.

Mr. Dubé: I was always of the opinion that we should have more severe penalties to prohibit the sale of tobacco to young people. I think I'm still haunted by this question. Even though the legislation came into force two years ago, there is an increase in tobacco addiction in the ranks of our young people, especially in Quebec, especially in the ranks of young girls and even pre-teens. We seem to be only looking at the provisions of the bill concerning sponsorship, but why wouldn't we talk about the legislation prohibiting the sale of tobacco to young people? How do you explain the present situation?

Mr. Cunningham: The legislation came into force on 8 February, 1994. Since that day, taxes have decreased. In our opinion, this decrease in the price of cigarettes is one of the major reasons explaining the increase in the number of youths becoming addicted to tobacco.

Mr. Dubé: When taxes increase, there's an increase in smuggling.

Mr. Cunningham: Yes.

Mr. Dubé: So we have fewer official sales then, but more unofficial sales. Finally, you never attain the objective you set out to attain. By analogy, we could talk about marijuana which is illegal in Canada. Health Canada, over the last few years, has seen a considerable increase in marijuana consumption even though it's illegal and is not legally for sale. This situation brings me to the conclusion that we can't be assured that any legislation, even if it's enforced, will be a success. When I read your book, that's almost the demonstration that it seems to be making.

Mr. Cunningham: In my opinion, the results obtained in the early 1980s translated into a great decrease in tobacco addiction both for adults and youth if we take per capita use into account. In looking at the historical aspect of what has gone on in Canada, we can see that when you have simultaneously and different kinds of steps taken, results are obtained. The figures compiled internally by Imperial Tobacco on the use of tobacco by adults show that after C-51 was implemented, use decreased at an accelerated rate.

[English]

The Chairman: Dr. Hill.

Mr. Hill (McLeod): Thank you, Mr. Chairman.

Many of the witnesses have expressed some concern about the broadness and the vagueness of the regulations. Do you share those concerns?

Mr. Cunningham: In some respects, the authority given to the Governor in Council is less than in some other statutes, such as the Hazardous Products Act and the Food and Drugs Act. In the Hazardous Products Act everything is subject to regulation.

Our history of examining the tobacco question goes back several decades, and we have found that it's important, in responding to the epidemic, to have the flexibility to respond quickly to the industry exploiting loophole. So we support the permissive, broad regulatory framework found in the bill.

Mr. Hill (Macleod): Do you think there is any merit in having elected legislators at least review the regulations before they are passed into law?

Mr. Cunningham: Certainly the gazetting process allows everyone to participate in the consultations, and parliamentarians, as with everyone else, will see draft regulations before they are final. Apart from the direct submissions, they can hold government accountable in Parliament, and certainly we would want that to happen if regulations weren't tight enough or were not as well designed as they should be.

Mr. Hill (Macleod): Would you say that from the viewpoint of your organization you had enough time to look at this legislation and come to a pretty good conclusion? Is this going too fast? Is this fast-track, if you will, too fast for your purposes?

Mr. Cunningham: We've had sufficient opportunity to review the bill and to provide our written submission and recommendations for improvement. We support speedy passage of the bill. Certainly we would urge the committee to consider the amendments when clause-by-clause happens.

The Chairman: Harb Dhaliwal.

Mr. Dhaliwal: Thank you very much, Mr. Chairman.

I would like to welcome the panel. We've heard you before and you've made some very excellent presentations to the committee at prior times.

First, can you comment on the statement made by the manufacturers:

...there is not one scintilla of evidence that this Bill will be successful in achieving the stated effect - reducing the consumption of tobacco.

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Mr. Cunningham: We reject that conclusion. We believe there is evidence in many types of different categories, some of which evidence was tabled earlier this morning by the Canadian Council on Smoking and Health for consideration by members of this committee. If we look at the expert opinion there is in the academic community, published studies, international materials, other countries that have considered this, committee reports...internal tobacco company documents I think are extremely powerful, as is the basic logic that was raised with the questioning.

Mr. Dhaliwal: On taxes, I wonder if you could comment on whether you feel as a government we should have increased the taxes.

Also, you were probably in the room when Health Canada was here. I asked them if they could set up specific goals and objectives for us to achieve as a society over the longer term and take that leadership role as a government in how we want to reduce smoking. I think most Canadians would say smoking is a very serious health problem and we need to deal with it. Would your organization support a situation where we as a government started putting specific objectives like that? Maybe we should try to reduce smoking by 10% over the next ten years. Would you support those types of specific goals and objectives by the government and by Parliament?

Mr. Cunningham: Yes, sir, we would. We would go further. In our written submission on the blueprint we recommended that the government produce an annual report about progress in its tobacco control strategy. That would provide an annual statement on how they're doing. It would be a way to hold them accountable and look for ways in which the strategy could be improved.

About taxes, we certainly support the increase in taxes announced by the government in 1996. Our view is that taxes could go up higher and at a faster pace. The total federal-provincial combined reduction in Ontario and Quebec was about $20. So far we've had an increase of less than $3. At the current rate it will be the year 2011 when we get back to the former levels.

The Chairman: I would like to raise a couple of matters. Mr. Cunningham, you made reference to a graph in your book in which you indicated there was a 40% drop -

Mr. Cunningham: That is not in prevalence but in per capita consumption.

The Chairman: Over what period was that?

Mr. Cunningham: Between 1982 and 1992-93.

The Chairman: What Mr. Parker displayed was this one here. I have heard it said before that there are lies, damned lies, and statistics. Somebody is wrong here, or somebody has put a rosy interpretation on some of the figures. How can you reconcile your graph with their graph?

Mr. Cunningham: First of all, their graph looks at the percentage of the population that is smokers; it does not take into account how much people are smoking per day. The graph, if it's similar to graphs the industry has presented in the past, relies on different surveys that are not annual in nature and that sometimes have different methodologies. Certainly if we look at the particular government surveys, a lot hinges on the 1986 survey, which has an unusually low measure of prevalence among adults compared with Gallup polls and even internal industry surveys.

The Chairman: I also want to come back to the point you were making about the marketing expenditures by the tobacco companies to achieve their increase in market share. I have to tell you I've always felt there was more than meets the eye there, because when I heard, as I have today and heretofore, the many arts and cultural groups saying, here are all the millions we're getting from these companies, and I hear the companies, on the other hand, saying, well, look, if we get all 10% to shift it's only $220 million... As I said this morning, maybe it's a matter of the goodness of their hearts rather than a grab for market share, or maybe it's something else instead. Maybe there's more here than just going after increased market share. Would you want to comment on that?

Mr. Cunningham: I agree with the conclusion that more is happening than attempts to increase market share. Certainly that's part of it, but tobacco companies could have a windfall profit increase if there were a total ban on advertising and sponsorship. Yet despite this potential for increased profit they continue to oppose a ban on advertising. We've looked at the evidence and we certainly feel sponsorship advertising and other forms of advertising have an impact on overall demand, including among teenagers.

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The Chairman: Could you give us your view on the question of sponsorships? I've heard your view, but could you give me your view on this specific issue? I gather you would be more comfortable with a complete ban on sponsorships. What would you have done with the organizations that heretofore depended on that kind of funding? Would you have grandfathered them or looked after them with alternate funding, or what?

Mr. Cunningham: We would have no objection if there were to be replacement funds. I personally believe some of the smaller groups would continue to receive some funding directly, and some of the larger groups. Much of the arts contributions from Imperial Tobacco, through du Maurier, is deemed to them, according to their annual reports, as charity, and if it really is charity for some of the contributions, those will continue.

But at a minimum, public health must come first. If we have to make a decision between competing objectives, we would urge you follow the American model.

Mr. Kyle: We're not opposed to sponsorship. It's the advertising that goes along with it that we have the problem with.

The Chairman: I thank you very much for your interventions, your evidence.

Now we would like to invite to the table a representative from the International Jazz Festival, Vancouver, Mr. Robert L. Kerr, executive director.

Mr. Kerr, we thank you for coming on quite short notice to help us in this process of scrutinizing the legislation before us, Bill C-71. Maybe you could give us a statement, if you have one, and then give us an opportunity to put some questions to you.

Mr. Robert L. Kerr (Executive Director, International Jazz Festival, Vancouver): Thank you, Mr. Chairman and committee members, for this opportunity to present my concerns, which are very deep and very pessimistic indeed about the impact of Bill C-71 on tobacco company sponsorship of the arts.

I'm the executive director of the Coastal Jazz and Blues Society. We produce the annual du Maurier International Jazz Festival in Vancouver. I'm also president of the WESTCAN Jazz Association. That's a non-profit association of ten different jazz societies and jazz festival producers in western Canada.

I would also like to assure you that I'm not a spokesman or a front for the tobacco industry. I'm an arts festival producer. In that context I would like to give you a bit of history and a bit of background on tobacco company sponsorship and maybe help put all this in a slightly better context.

I personally have twelve years of experience in working with a tobacco company sponsor. In 1986 du Maurier became the title sponsor of the Vancouver International Jazz Festival. Their investment of $100,000 in that first year gave our grassroots organization a much-needed financial boost and support. The government at that time certainly wasn't there for us in any way. They came on in a small way about three years later and at that time made it abundantly clear that we could expect only limited support regardless of how innovative our work was or how much it contributed to the development of Canadian artists.

Of course ten years ago government arts funding was already shrinking. The pie was getting smaller and most of it was already spoken for by the large, established arts groups and institutions. But government had a solution ten or twelve years ago. They said to go to the private sector and get sponsorship.

We did that. We had a sponsor.

It was clear to us that in order for our festival to grow and flourish, we would have to develop our relationship with du Maurier. As we developed the artistic scope and vision of our jazz festival, we also worked hard to increase its promotional impact, gaining media sponsors in radio, television, and print. This increased the promotional value to du Maurier, who subsequently increased their sponsorship, which enabled us to expand our programming further - and so on.

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Today du Maurier contributes over $450,000 in direct cash to the Coastal Jazz and Blues Society. The jazz festival has become Vancouver's largest annual arts event, presenting 260 performances by over 1,000 artists to an audience of over 300,000 people. Our festival is recognized all over the world as a leading artistic event and is a cornerstone of jazz activity in Canada. None of this could have been achieved without du Maurier's long-term sponsorship.

The support of du Maurier is equally important in the national jazz picture. It is the title sponsor of jazz festivals in Toronto, Montreal and Halifax, and the secondary sponsor in Winnipeg, Saskatoon, Edmonton and Victoria. The elimination or drastic reduction of du Maurier's sponsorship will cause the collapse of jazz festivals in Canada. I have no doubt about that.

Why will Bill C-71 create such chaos in Canada's arts community?

The bill says tobacco companies can continue to sponsor events and even use their brand names. So what's our problem? The problem is that Bill C-71 is deceptive and fraudulent on the issue of sponsorships. While claiming to continue to allow them, the bill straitjackets sponsorships with so many promotional restrictions and impending regulations that it makes them nearly meaningless to tobacco companies.

Because our festival is a sponsored event, we will no longer be able to mention our sponsor's name in radio or television ads. Their logo cannot appear on street posters, outdoor signs, billboards, bus panels or even on our advance program guide if distributed off the festival site.

We will only be able to include du Maurier's name on materials sent by direct mail, on material at festival venues and bars, or in publications with primarily adult readership, however that will be defined.

The Minister of Health claims his intention is not to detract from the economic status of arts groups and he claims that these restrictions on sponsorships are reasonable and balanced. After reading Bill C-71, I submit, with all due respect, that either the minister does not understand the real impact of this legislation on sponsorship or he simply doesn't care what happens to the arts in Canada.

I see Bill C-71 as the 10% solution for sponsorships. Rather than banning sponsorships outright, the Minister of Health has cleverly engineered legislation that will greatly reduce their promotional value. What this will mean to us is that instead of contributing over $450,000 as title sponsor of Vancouver's jazz festival, du Maurier will understandably contribute only $40,000, or $50,000 at best, as a secondary or tertiary sponsor.

This is not as a result of the restriction of the size of their name. It is a result of their name being banned in all the media. After listening to the CTMC's legal position I'm even more pessimistic about their willingness to come in and engage in any sponsorship promotions whatsoever.

How will we make up the lost funding? That's a good question. Currently, du Maurier supports about 30% of our entire operating budget and 83% of our total cash sponsorships. The next largest cash sponsorship we've ever had was $60,000 and that was from Volkswagen, which is not a small company.

I can't tell you how many rejection letters I've received from Canada's banks and financial institutions. The jazz festival may be Vancouver's largest annual arts event, but that doesn't mean much in a global media market. We can't begin to compete with major televised sporting events and arenas, and now even governments, universities and park sports are all jumping into the fray to compete for sponsorship dollars.

Minister Dingwall claims that tobacco company sponsorship is an immaterial and insignificant amount of arts funding. Thirty percent of our budget is not insignificant. It's especially important for contemporary arts and for small arts organizations, which are often shut out of the historical government funding of the arts that's taken place in this country.

I'd also like to refer to the document that I believe Mr. Volpe was referring to earlier today when he said that ``it's only .04% of somebody's budget''. Our organization is listed in that same CCA study at 27% of our budget. This was three years ago and it's a little bit higher now, around 30%. I think you'll find other examples of very significant sponsorship in there.

The arts in Canada has benefited greatly from du Maurier's support for over 25 years. What are we promoting? We're promoting our events and along with them our sponsor's name, a brand name to be sure, but not tobacco products themselves. There are no tobacco products in any promotional materials, art work or ads associated with sponsored events. We have never sold cigarettes at jazz festival venues. In fact, most of our venues are non-smoking facilities. Moreover, our audience is comprised of adults; 96% are 19 years of age or older, and more than 85% are over the age of 25.

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I would like to show you our poster. I don't think that's an ad for cigarettes. It's an ad for an arts event, a work of art portraying an arts event.

To suggest that sponsorship causes people to smoke is ridiculous, in my opinion. This view that sponsorship creates behaviour gives too little credit to consumers and too much credit to sponsorship. If sponsorship determined behaviour, we would have companies lined up around the block begging to get in on the action, and they're not. In a heavily regulated industry, sponsorship has been one of the few ways in which tobacco companies have been able to promote their brand names.

We agree certain restrictions should apply, but Bill C-71 goes too far. The restrictions on sponsorship promotion contained in Bill C-71 will inflict enormous economic damage upon Canada's arts community in exchange for no appreciable health benefits. There's no balance here; there's no reason.

Furthermore, the Government of Canada refuses to acknowledge or accept any responsibility for the arts funding crisis this bill will create. The Minister of Health blithely suggests that tobacco companies will continue to contribute $25 million in cash to arts groups as philanthropists instead of sponsors.

We must be clear about this. There is no corporate sponsorship without sponsorship promotion. A $5,000 or $10,000 donation is totally different from a $500,000 sponsorship contribution. This couldn't come at a worse time for Canada's arts community. Federal, provincial and municipal governments are all in the midst of a wholesale reduction or elimination of arts funding programs. This decision cannot be made in a vacuum. Bill C-71's restrictions on sponsorship promotion must be rewritten through a process of open and honest consultation with all stakeholders.

At the very least, the Government of Canada must provide a transition period of a minimum of five years for the implementation of these restrictions and/or legislate a grandfather clause enabling organizations currently sponsored by tobacco companies to continue to promote fully their sponsor's name through future contracts.

Earlier today, Mr. Kelly from the Canadian Conference of the Arts suggested there is not unanimity within the arts community on the issue. I would agree with him, because I do not share his cautiously optimistic view of the sponsorship proposals in this bill. Failure to address this issue will result in enormous cultural and economic damage across all regions of Canada. The nation's arts community implores you to reconsider this legislation.

Thank you.

The Chairman: Thank you very much, Mr. Kerr.

[Translation]

Mr. Dubé.

Mr. Dubé: A very brief question as I was only present for part of the presentation.

I'd like you to give us more detail on your compromise concerning vested rights in the matter of sponsorships.

[English]

Mr. Kerr: I'm sorry, my earphone is cutting a little bit here, but I think you're asking me for details on the grandfathering and transition restrictions. I think this comes around to the issue that there's $25 million that's being spent on the arts in Canada by the tobacco companies currently. This is a huge sum of money. It's a very large percentage of our budgets. I think, at the very least, we need to protect that $25 million, enabling the organizations who are currently working with those sponsors to continue to work with those sponsors. If this is going to go down the road it's going, through these restrictions and regulations, we need at least five years.

I'm a fund-raiser with our organization. I'm the executive director. We need at least five years to look reasonably to replace that money, because it takes a long time. What it will mean is for many more corporations to come forward and support the arts. For me, that's a bottom line.

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[Translation]

Mr. Dubé: If I understand you correctly, you are talking about $25 million, but it seems more liked 60 million. Let's just say that I won't get into a numbers' war with you. Cultural and sports events organizers talk about $60 million in sponsorship for Canada as a whole.

So you're suggesting a sort of moratorium; we'd go to a gradual decrease over a five-year period. That is what you said?

[English]

Mr. Kerr: What I said is that we need to protect that sponsorship money, that $60 million for the arts and sports, through grandfather clauses. I think that's the ideal situation for us. That will enable us to continue to produce great events.

The Chairman: Mr. Hill.

Mr. Hill (Macleod): Thanks for your commentary. Would your International Jazz Festival shut down if du Maurier walked?

Mr. Kerr: If du Maurier walked, it wouldn't be an international festival any more. It would be a community festival, a local festival. We might have something that was maybe 10% or 15% of the size of what it is right now. We wouldn't be able to tour national jazz acts and Canadian jazz artists from coast to coast. We wouldn't be able to bring in major international artists from Europe, from Africa, from Asia, from the United States. At best, we'd have a small event.

The other thing, too, is that there is this very large community of jazz festivals in Canada. The major festivals in the major cities - Vancouver, Toronto and Montreal, as well as Halifax - are anchor festivals, and they support the smaller festivals that occur at the same time. There's a whole network, and that whole network will shut down or significantly diminish.

Mr. Hill (Macleod): Do you have anything from du Maurier directly that tells you their intentions if this goes through?

Mr. Kerr: To be honest with you, I have spoken to them. They have said that it's far too vague; it's too unclear right now for them to make a definitive statement. I'm basing my consideration on my twelve years' experience working as a cultural producer and working with other sponsors, and on looking at how we have to promote our event and promote our sponsors.

Mr. Hill (Macleod): Since you've been in this business that long, you will probably remember what happened when the Tobacco Products Control Act came in. Do you remember this same debate?

Mr. Kerr: Yes, I do. In fact, I presented at the parliamentary hearings for Bill C-51.

Mr. Hill (Macleod): Were the fears that you expressed then fears that actually came about? You basically had the same position then, if I remember the testimony.

Mr. Kerr: We did, and I think the government of the day did in fact hear us. They enabled the continuance of sponsorships through the clause that allowed companies to continue to promote through a corporate name. I believe quite sincerely that they knew at the time that the tobacco companies would establish du Maurier Ltd., Players Limited, Rothmans Inc., and other companies, and I've had that confirmed to me privately by members of government.

Mr. Hill (Macleod): Your testimony says that you started out with $100,000, but that's gone to $450,000 in cash from du Maurier. Would you say that your concerns at that time were groundless?

Mr. Kerr: They weren't groundless at all. As I say, du Maurier was able to continue to sponsor by using their name. They had to change it to du Maurier Ltd. to work within the act, but they were still able to associate du Maurier with the jazz festival. Because of that, we were able to continue to develop our event as a sponsored, brand-name event.

Mr. Hill (Macleod): Thank you.

The Chairman: Thank you.

We next move to you, Mr. Scott, and maybe you can leave a little time for your colleague Mr. Szabo.

Mr. Scott: Thank you very much, Mr. Chair.

In your communication with du Maurier, did you ask them what restriction might be acceptable?

Mr. Kerr: No. The big problem here is all the limitations on their inclusion in our promotion. If they're not included in the promotion we do for the festival, then the value is not there for them. Again, this has happened so quickly, I barely had a chance to read the bill before writing my submission.

Mr. Scott: My point, though, is that you said you'd had a conversation, and it was vague in terms of whether or not they might pull their funding. In the course of this exercise, I was just curious as to whether or not they offered any suggestion as to how our concerns might be dealt with, which they must understand.

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Mr. Kerr: No, they didn't.

Mr. Scott: I have just one other question, Mr. Chairman.

If the kind of advertising that takes place - and I don't want to be parochial about this at all - at the very modest festival supported by du Maurier in Fredericton is to the tune of $5,000, it's not affected at all by this. They don't advertise in the paper; there's nothing on the radio. Basically, it's on-site with lots of posters. I think you can get an image of what it's like. Every place is licensed where they perform. So basically, the legislation won't impact dramatically on the activity that is associated with our small festival.

In the event that they decide they cannot spend $450,000 and they're still allowed to spend money in small festivals like mine in Fredericton, can you see any advantage in that? I don't mean to suggest that it's a good trade-off, but can you see any advantage in that in terms of the promotion of jazz in Canada?

Mr. Kerr: No. For our festival, as I mentioned to Dr. Hill, it would mean a huge reduction in what we're able to do. We're an international event. Through our organization, that festival spawns activity throughout the entire year in Vancouver.

Whether or not the companies would continue to put $5,000 into the Fredericton festival...well, maybe they would. I think the promotions will actually be affected, because having du Maurier's logo on their program would mean that the Fredericton jazz festival wouldn't be able to distribute that program in advance of the event. They wouldn't be able to have their posters around the town and around the province in advance of the event. So I think the promotions would be affected, and that would more than likely cause the companies to reconsider even a small contribution. But a $5,000 contribution is essentially on the philanthropic level.

The Chairman: Thank you, Mr. Scott.

Mr. Szabo.

Mr. Szabo: Thank you, Mr. Chairman.

Robert, I have absolutely no doubt of your conviction and your commitment to the International Jazz Festival in Vancouver - and certainly that of all of the groups that came before us. This has to be very difficult for you, but from our standpoint you have to appreciate - and I think you're a very good example - that your funding increased by about 450% from the tobacco industry over a very short period of time. You have to wonder why that happened and how that jazz festival changed so dramatically because of it.

I'm not sure whether you were here earlier or not. I speculated or just threw the hypothesis out that the tobacco industry, which hasn't directly appeared before us and which will not be appearing before us - you won't see Imperial Tobacco or Benson & Hedges or any of them before us. They sent their association. The association has no legal risk, as it were, to come before us to say something. They won't have to answer certain questions, but it almost looks like the tobacco company has put you in a situation where you have a lot of eggs in one basket and now you're almost beholden. It's a bad strategy, I think, and you probably would admit that now.

Do you think that since all of the tobacco companies would still be subject to the same rules, and since your event and similar events still represent their target markets, they just might still need to advertise or do their best on a level playing field, even though it might be somewhat restricted? Don't you think they still have to advertise?

Mr. Kerr: I'd like to answer your question in a couple of parts because I think there are two sections to it. First, proportionately, we're receiving about the same level of funding from du Maurier now in 1996-97 that we were receiving in 1986, when we got $100,000. Back then, our budget was about $250,000 or $300,000 in total, so it was about a third of our budget.

I would like to think the reason we've been able to negotiate larger contracts with du Maurier is our experience and expertise at developing our event and making it better. It's become much bigger and much more well renowned. As I mentioned, we have also brought in other media sponsors and all kinds of other things to increase the size of it since 1986. So I think they've increased their sponsorship because we've done a good job. One of the objectives of an event manager, an arts producer, is certainly to increase the support obtained from sponsors.

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Mr. Szabo: I have one last, quick question. Many of the other groups that have come before us from the arts and cultural side have ventured to express an opinion on the effectiveness of sponsorship or advertising on behaviour. You did as well, so I guess I would like you to cite any evidence or science or research to support the professional opinion you've just given.

Mr. Kerr: I can support it only through the work I have done with my peers, the work I have done attending sponsorship conferences. There's a very good organization in Chicago known as the International Events Group, which publishes sponsorship literature, newsletters, etc. I believe their research and their experience would support the statements that I've made here. Sponsorship really comes down to reinforcing a company's position in the marketplace, particularly when a company can't associate a product with it.

Mr. Szabo: Thank you.

The Vice-Chair (Mr. Dhaliwal): Let me thank you, Robert. It's good to see you again. I know you have met with me and have articulated some of those same concerns. I'm sure some of those concerns reflect those of many arts groups - like the film festival in Vancouver - and other organizations. I think you have articulated your position very well. As members of Parliament, we're very concerned about some of the problems you have put forward. Right now we believe you have never been told by any of the sponsors that they will not do it. Some of this is presumptuous, is it not?

Mr. Kerr: Again, I just have to go by my experience, by my professional opinion, and I have to tell you I'm not faking it when I say that I'm really worried.

The Vice-Chair (Mr. Dhaliwal): Okay. Well, thank you very much for coming forward and for travelling from Vancouver to be here.

Mr. Kerr: Thank you very much.

The Vice-Chair (Mr. Dhaliwal): We'll go on to the next group, which is the Non-Smokers Rights Association.

Let me welcome all of you to the committee, and particularly the panel of Mr. Mahood, Mr. Sweanor and François Damphousse. Who is going to start the presentation?

Mr. Garfield Mahood (Executive Director, Non-Smokers Rights Association): I'll start off, Mr. Chairman and members of the committee, and introduce my colleagues. My name is Garfield Mahood. I'm the executive director of the Non-Smokers' Rights Association. With me is David Sweanor, our association's senior legal counsel. David is an adviser to the World Health Organization and was a consultant to the U.S. Food and Drug Administration during their deliberations over the FDA rule recently. Also with us is François Damphousse, the director of our small Montreal office. He has been there for a year or so, working professionally on tobacco control issues.

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I want to begin by commending the government for bringing the legislation forward. It's not perfect, as I've said before. Nonetheless, it's a very positive step forward. We think it's extremely critical not only that the legislation be passed, but also that it be passed quickly. We're still hoping - we hope not naively - that the promise of passage by the end of the week will be kept.

This legislation is critical for a number of reasons, one of which is that Canada has played a leadership role internationally on this - and David will elaborate more on that. What Canada does has certainly influenced health policy in other countries. The problem, of course, is urgent here as well. That's reason enough, but it also reminds us that it's important that we try to improve the legislation wherever possible.

We're going to make some recommendations for amendments that we think are extremely important, and we hope our recommendations will be valuable. We think it's important to close some of the loopholes because the industry has a track record of exploiting loopholes in a very major way - and I'd like to illustrate a couple of these for you.

When they banned tobacco advertising in France, what we later saw were full-page advertisements in national magazines. Of course, people looking at them will immediately identify them as tobacco ads, but you have to look very closely. These are in fact advertisements for penny matches. The will of the government was to ban tobacco advertising, so they simply brought forward facsimile ads that looked just like tobacco ads and accomplished the same thing. They will go to any lengths in order to make their point. Would anybody realistically suggest that this is not a tobacco ad? But in France, of course, these Marlboro ads were for lighters, not for cigarettes at all. No company goes into national magazines to advertise penny matches and lighters, but Marlboro did. Of course, that loophole had to be closed.

The tobacco industry will tell you that it's not interested in kids. Well, this is the parent of RJR-Macdonald, which is responsible for the Joe Camel advertising campaign. If you want to see probably the most obscene thing that has ever taken place... Well, no, it's hard to talk in superlatives about this industry. These are Joe Camel advertisements. These are such great packages that we hope they'll actually come back home again after we're finished. For your permanent record, however, we have some photos of these that will show just how far this industry is prepared to go.

The Vice-Chair (Mr. Dhaliwal): Could I just ask you a question, Mr. Mahood? Are these the smaller packs - what they call ``kiddy packs'' - that we've heard are targeted towards young people, that are cheaper, and that contain less cigarettes than the normal pack?

Mr. Mahood: No, that's a normal Camel cigarette package. It's just come on the market in the United States, but Camel cigarettes are sold in this country, as you know.

We raise this for two reasons: to show how far this industry is prepared to go; and also to show - when David talks about amendments - the reasons that make it so important to close these loopholes in order to prevent this kind of marketing from being directed at Canadian kids.

Having said that, having made that point by way of introduction, I'd just like François to say a couple of words, and then we'll turn it over to David for discussion of the amendments.

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[Translation]

Mr. François Damphousse (Non-smokers Rights Association): Thank you very much, ladies and gentlemen.

We would mainly like to say that we review the bill favourably. As you know, Quebec has the highest incidence of tobacco addiction in the country and we are all very concerned. Even the Quebec's Health Minister, Jean Rochon, is thinking about a bill. Your bill should provide enormous encouragement to the Quebec government to continue in that vain.

We don't think the federal government's bill is extreme. It includes the same powers that are found in the Hazardous Products Act or in the Food and Drugs Act. It's quite appropriate for a major industry which, as you know, is the cause of a great number of deaths every year.

In effect, for many years, the tobacco manufacturers have enjoyed exceptional freedom in marketing their deadly product. We can no longer tolerate this situation and we hope that you will adopt the bill as soon as possible. Thank you.

[English]

Mr. Mahood: There is just one final thing I want to finish off with before we get right into the amendments.

There was a lot of discussion about litigation. I certainly heard it Friday and I've heard reference to it today. Let me say that when Canada plays a leadership role, this industry will go to court, and it will go to court no matter what you do. It's not realistic to expect that you're not going to go to court.

The reason for that? In other countries where we travel and where we occasionally work, this industry wants to be able to say that the legislation in Canada is before the courts in order to buy a seven-year delay, because a lot of countries will then hold back and say, ``Let's see what happens in Canada''.

They're going to go to court no matter what you do. I think David can show you how the legislation would be more effective before you even get there.

Mr. David T. Sweanor (Senior Legal Counsel, Non-Smokers' Rights Association): It has been said by others that this is not the Draconian legislation some people would like to paint it as.

If you look at legislation in the history of public health, it has to give broad powers. Those who are complaining that this legislation goes too far either have never read or don't understand things like provincial public health legislation for medical officers of health. They don't understand coroners' legislation. They've obviously never read the Hazardous Products Act or the Food and Drugs Act. Legislation designed to protect public health has to give broad powers, because when you find a big problem, you can't be in a situation where you have to go back to the legislature to change it. It takes too long. Too many people die.

There's another problem when we deal with a situation such as this one of tobacco. It is sort of the bad news part. They'll be back and you'll have to amend, no matter what, because you have exactly the same situation that comes up with the Income Tax Act. As long as someone has a big financial incentive to find ways around your law, he's going to do it. You have to start off with something as broad as you can to give you enough power, but you have to recognize that you're going to come back to it again. We're not finished with this legislation any more than we're finished with the Income Tax Act.

To get an idea of the economics, the tobacco industry says it doesn't want kids to smoke. What incentive might they have to misbehave? The profit for some of these companies is in the range of 50¢ a pack. Somebody smoking a pack a day is giving them about $200 a year. A 15-year-old who starts smoking today and smokes for 25 years, on average, before he quits or dies is going to be $5,000 of future profit even without further price increases by the manufacturers.

Multiply that by 100,000 kids to 150,000 kids starting to smoke this year and you have something in the range of half a billion dollars to three-quarters of a billion dollars in future profits just for the kids who come on the market this year. That's a big incentive.

In my view, the tobacco industry will ignore that to the same extent that an oil company will ignore the possibility of a massive new oil find. It's the future of the industry.

As Gar has also said, Canada is a recognized international leader in this area, and if there was ever an area in which you do have to show leadership and even take chances, this is it. The World Health Organization tells us that over half a billion people alive today are going to die as a direct result of tobacco products. Around the world - and I know because I go to many of these countries - Canada is seen as a leader in health in general, in public health in particular, and in tobacco control most particularly.

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Six days ago, I was in front of a legislative committee in Poland. I was looking at their laws and regulations, which are modelled after Canada's. This morning, I got a note in the office that said their health minister has now signed into law new health warnings that are modelled after the Canadian ones: black and white, 30%, and on the front and back.

This is similar to what we've seen in Australia, Thailand, Singapore and South Africa. These are countries that look to Canada for leadership and for what has come out of legislative bodies like this. It's having an impact around the world.

The importance of this legislation for recognizing the context is that I think there are some areas we can fix now so we don't have to come back to the legislature quite as soon as we might otherwise have done.

I'll just go through these, but you do have our brief. The precise language will be there in the appendices.

Paragraph 7(a) talks about the regulatory authority that will exist for establishing standards for tobacco products. We feel you should extend that. Right now, you're looking at prescribing the amount of substances that may be contained in the product and may not be added to the product.

You want to prescribe to that the characteristics that can be allowed for the product. For instance, the acidity of tobacco smoke makes a big difference to how easy it is for kids to inhale. That's a characteristic, not a standard. The use of ventilation holes to cheat the testing machines is a characteristic, not a standard. I think there should be control over things like that.

If we're prescribing things that cannot be added, we should have the ability to prescribe things that must be added. I have talked to enough people who are working or who have worked for tobacco companies to know that there are many changes that can be made to those products, and we should have the ability to mandate those changes if that's going to save lives in Canada.

Clause 10 of the legislation talks about establishing an effective ban on ``kiddie packs'', which are packs of fewer than 20 cigarettes. I think that's an important measure, but we're suggesting that you have the regulatory authority to deal not just with setting the minimum package size, but setting the package size in general.

We know from other countries, and indeed the experience from Canada, that adjusting packs, making larger packs, can actually increase consumption. In Australia, there is a pack of 40. Say we see evidence showing us that as the tobacco industry increases package size, many people who smoke a pack a day will continue to smoke a pack a day, whether it's 20, 25, 30 or more. Do we have the ability to prevent them from putting these mega-packs on the market? I think we should have at least the regulatory authority to act on something like that.

Clause 15 deals with labelling, both on the package and on the inserts. The language actually - this has been mentioned by other groups - constrains what Canada can do. It limits it to the information required about the product and its emissions, and the health hazards and health effects arising from the use of the product and its emissions. That would be very important to warn Canadians about.

But there are other things that aren't just health hazards over which you might want to be able to have the authority to put on those packages.

One of the things that health groups have asked for in various countries is information on quitting. We know, despite the tobacco industry's claims that tobacco isn't addictive, that the vast majority of people who smoke don't want to smoke; they want help to quit. We could have packages that have a toll-free number that would give people information to help them quit. It could tell them perhaps where there's a local physician who can help them or what sort of pharmacological aids are available to them.

But we can't do this unless we change subclauses 15(1) and 15(2) to simply limit it to information in general. That would require a change in clause 17, which is the regulatory authority. This is again simply to allow us to specify the information that would be on the packages and leaflets, rather than limiting that to only being a health hazard type of information.

Clause 24 deals with sponsorships. Again, this has been mentioned by various groups. We think there should be a ceiling. We don't want the tobacco industry to be able to go out and spend another hundred million dollars creating dependencies before you can get around to writing the regulations.

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Those are the points that we have on our A list, but there are also other points. Some have been mentioned so I won't go into great detail.

In clause 2, ``brand element'' should include colour. You're specifically excluding colour in the legislation as it is drafted. The Food and Drug Administration recognizes the need to include colour.

If you look at our brief, you can see what the tobacco industry has done in terms of colour with things like the du Maurier tennis championships. They know how to use colour. I suggest to you that you would not even need to put the name ``du Maurier'' on the screen for every kid watching television to know what's going on there. We should at least have the authority by way of regulation to prevent that sort of nonsense.

We should have publicly available information rather than information that simply goes to the government. For instance, clause 6 specifies that the tobacco industry is going to have to give the government a lot of information. Let's create an expectation that it is going to get to the public. Let's ensure it.

Perhaps the minister can have the right by way of regulation to prevent some of that information from getting to the public, but let's not be in the situation we're in now, where the tobacco industry can do whatever they want with the product and add whatever they want to the product, and no member of the public - including the millions of people addicted to that product - has a right to know what's in there because the tobacco industry argues that it's a trade secret.

Finally, in clause 9, which deals with the signs with respect to tobacco sales to children, again, we're limited on what we can say because of the way clause 9 is worded. It is specifically saying that the signs can only tell people that we can't sell tobacco products to children. That precludes us from giving a health justification for that, so this feeds right into the tobacco industry line that smoking is adult behaviour. We should have the ability to have signs that tell kids why tobacco isn't sold to them, signs that give some sort of health justification.

That's a quick overview. Everything else is in our brief.

The Chairman: Thank you.

[Translation]

I now give the floor to Mr. Dubé followed by Ms Hickey and Mr. Dhaliwal.

Mr. Dubé: I would remind you once more that at second reading we were agreed on the bill. Of course, your position is diametrally opposed to that of those who are against the bill. You even add to it that there is danger. You have pointed out the elements which, in the opinion of the tobacco company representatives, are grey areas. Many clauses could be subject to clarification. In my opinion, we would need a bit more time to refine all this. However, I do thank you for your contribution to the debate because it will allow us to examine the question further during the next few hours.

I would have a question on your basic premise. You say that Canada is recognized as being the world leader in the fight against tobacco.

If our results were anything consequential I would say: Great, there's a model that works. However, statistics show that Quebec, amongst others, is not a world champion in the ``percentage of population that smokes'' sweepstakes. We're not the ones who smoke the least. I'll let you answer that one and your answer will lead to another question.

Mr. Damphousse: When we say that Canada is the leader, it's because we're looking at what happened in the 1980s. With the taxation policy and then with the coming into force of the Tobacco Products Regulation Act, there were unprecedented decreases in use. Over the period of 10 to 12 years, there was a 45% decrease in use as compared to the U.S.A. where the decrease was 25%.

There were tragic events which led to a reversal of the trend especially after the repeal of the Tobacco Products Control Act. There was a strong increase in the use especially by youth and we know that Quebec women have the highest rate in the world according to the World Health Organization. That's why we're encouraging the government to pass this bill. We need help. Educational and ``stop-smoking'' programs are not enough anymore. Steps have to be taken to control the industry's activities.

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Mr. Dubé: As far as tobacco use is concerned, how do we rank in the world today?

[English]

Mr. Sweanor: Canada is still much too high. The important part of what's happened in Canada is that at the beginning of the 1980s Canada had one of the highest levels of tobacco consumption in the world and one of the worst track records in dealing with it. Since that time we did see massive declines in tobacco consumption when Canada started doing exactly the thing the World Health Organization says we should do; exactly the sorts of things people such as Jean Rochon knew we should do. We saw the results. Despite whatever games tobacco companies want to play with statistics, we saw what could happen, and countries have looked to us for that.

We are now way down in the league in per capital consumption. We are much better off than what we see now in places such as central and eastern Europe and what we're seeing happening in some of the Asian countries, certainly with the massive public health tragedy that's unfolding now in China. We have done well, but we are still faced with a massive health problem, as are many other countries.

[Translation]

Mr. Dubé: From what we can see and it seems these figures come from the federal government, it's about 30%.

Mr. Damphousse: I would like to say this graph is based on studies made by Health Canada but these studies are incomplete. There are actually two gaps, one between 1986 and 1990 and between 1990 and 1994. There are a lot of figures missing from these studies but unfortunately it's the only source of information we have available. Even the study done in 1994 was very much criticized by statisticians. There are other sources of information from the tobacco industry concerning the use of cigarettes. It seems there was a decrease in use until 1993 followed by an increase. We should not consider a single source of information only; it must be compared to other different sources. When many other sources show evidence to the contrary, we have to try to balance things out before passing judgment.

Mr. Dubé: We sovereignists are used to that. You're right in warning us. You should never take any figures for granted.

I have one last question. I was part of an activity organized by the Tobacco Control Coalition and I went to different workshops and read certain documents. Some statistics given by the Coalition are very revealing. First, the poorer you are, the greater the potential of being a tobacco user. Second, there has been a great increase in women's use of tobacco. Third, the proportion is increasing even more among young people, especially young women in a single parent family situation.

Could it be that poverty in Canada where one child out of five under the age of 18 is now recognized as being poor, might be a factor encouraging the use of tobacco? Statistics show that people with higher education or more money and who have better living conditions smokeless than the others. That really surprised me.

Mr. Damphousse: What I can tell you is that the tobacco industry discovered one day that women were a potential market and studies show that this group's use of tobacco increased considerably once the industry started targeting women in its publicity. It is true that studies show that there is a higher percentage of tobacco use in the weaker socio-economic groups but we should not forget that those people are dealing with an addiction problem and it's not easy for them to let go.

We also often notice that the best informed people about the consequences of tobacco use are the groups at the higher end of the socio-economic scale. They will not start smoking because they are informed. There may be an information problem with the weaker socio-economic groups and it's important to take that into consideration.

When you pass legislation, it's not only for those people but for the population as a whole. It's not just the people at the lower end of the economic scale, even if they are the most numerous, who have problems with tobacco, you also have them all across the economic scale.

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Which are the most effective steps that can be taken to reach all those people? We're asking for legislation exactly to be able to reach them all.

[English]

The Chairman: Bonnie Hickey.

Mrs. Hickey: Thank you, Mr. Chairman.

Earlier today, about 1 p.m. or so, the National Association of Tobacco and Confectionery Distributors told me it didn't accept the fact that tobacco was an impulse product. I am just wondering if you agree or disagree with that. I'd like to hear your views on it. How would you like to see tobacco products advertised?

Mr. Sweanor: I'll answer those in reverse order. How should tobacco be advertised? I suppose the quick answer is, honestly. If they actually told consumers the truth about that product they wouldn't want to advertise it any more, because they're dealing with the only legal product that kills when used exactly as intended. The World Health Organization tells us it will kill roughly half of its long-term users. It's addictive, has no safe level of consumption, virtually all new users are kids, and somewhere in the range of 90% of all their customers wish dearly they weren't using tobacco products. I think if they were to tell the truth, they would help tobacco control quite a lot.

As to it being an impulse purchase, clearly tobacco companies feel it is; otherwise I can't understand why they'd have so many of those self-service countertop displays next to the candy right at my six-year-old's eye level. It's certainly an impulse for kids. I don't know how many of you shoplifted out of those stands, but I can guarantee there are some kids who did. It's an impulse, too, in that you're dealing with an addictive drug. You're dealing with people, and you can look at what happens to brain activity; you can see what goes on.

Those in the tobacco industry may not understand that tobacco is addictive. They may say there's a controversy. Last month I was at the annual meeting of the American Society of Addiction Medicine in Washington. There's no doubt in the minds of the addiction specialists. They know that nicotine actually changes brain structure and dopamine receptors - all these other things that are well beyond my ability when scientists speak about them.

We're dealing with a very serious problem. People are constantly getting this message from their brain that they need nicotine, and the tobacco industry is constantly getting it in front of them.

Mrs. Hickey: So it's fair to say that you would like to see a total ban on all products of tobacco.

Mr. Sweanor: No. You cannot ban a product when an industry has 6 million or 7 million Canadians addicted to it. I would like to see a lot more help being given to the vast majority of tobacco users who want to quit. I think we should find other ways of getting nicotine to people who are truly addicted without them needing the dirty delivery system tobacco products represent. I think we should give much better information to the people who want to quit to improve those cessation rates.

The tobacco industry can tell us it's not addictive, but I talk to the people who say, ``I have tried everything but I cannot quit. What can I do?'' We need to give them more help. We need to have things like toll-free numbers on a pack of cigarettes so people can get information to help them. There's a desperate need for that.

The Chairman: Okay. We're out of time, but we'll have just the briefest of interventions from Grant Hill and Harb Dhaliwal, please.

Mr. Hill (Macleod): Thanks.

You mentioned that Joe Camel is a problem in Canada. Will this legislation stop Joe Camel?

Mr. Mahood: One of the reasons we raised this issue is that, as you know, the legislation specifically suggests it will enable the government, by way of regulation, to add information to the package. We're absolutely convinced government has to have the powers to remove misinformation from the package as well. In other words, there have to be both sides of that equation.

There is some question - I'd like David to comment on this - about whether or not the existing legislation would permit this. With the amendments we have recommended we believe the power to deal with Joe Camel... In fact, we have just been given blow-ups of what they've done with the moose on Canadian brands. They will change and modify their trademarks to emulate the kind of success that has been obtained with Joe Camel.

David.

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Mr. Sweanor: I think the easiest way to deal with the problem we have in Canada... This legislation is trying to end the use of these types of endorsements - cartoon characters, depictions of people on the packages - in clause 21. We're concerned with subclause 21(3), which in effect grandfathers existing trademarks. We think something like that should be subject to regulation, so if they take an existing trademark and say ``We're only going to make it larger; it's still the same trademark'' or ``We're just going to update it a bit; we'll just make the Macdonald lassie much bigger and look a little more like Pamela Anderson'' -

Do we have the ability to prevent that? I think it would be nice by way of regulation to have that authority to prevent them from playing games with the moose or camel or Macdonald lassie or the Players hero, or whatever logos they have.

Mr. Hill (Macleod): Just another quick response. Have you had enough time to review and look at this legislation to say you've had enough physical time to do that?

Mr. Mahood: First of all, we're living in the real world, and the real world is that delays benefit the tobacco industry, frankly, far more than they help the health industry. There is no question that if this legislation is not passed...and yes, we've worked very hard to get on top of this and have a good handle on what to recommend to this committee and to the government. Frankly, we think we're pretty close. We think the damage that can be done now by further delay is largely going to be of benefit to the tobacco industry, because they will target... We know what they have the potential to do to knock this kind of thing off the rails. If they're successful in doing that, because this is a net gain for public health, we know the losses for this country could be very significant.

Mr. Sweanor: There has clearly been enough time. This is not particularly complicated legislation. I was on the other side of the Atlantic when it came down. I have had time to look at it. I know the tobacco industry has said no person could possibly understand this legislation in a few days. That may just confirm the views of some people that tobacco industry people aren't persons. It's not difficult to go through.

Is it perfect? No. Are we going to be back? Yes. If we spend three years going through it, the tobacco industry will still find loopholes.

The Chairman: Harb Dhaliwal has the last word once again.

Mr. Dhaliwal: Mr. Chairman, I know we're very tight on time, but I would like to congratulate the group for an excellent presentation. I hope we will look at the considerations and the amendments they recommended.

Mr. Chairman, I know time is running out, so I want to hold to just those comments.

Mr. Mahood: Mr. Chairman, in a short time it's hard to get to each of those amendments, but in the rationale for each of those recommended steps you will see spelled out very clearly why this is essential and why this is an opportunity to make this even more effective legislation. Thank you.

The Chairman: Thank you, folks, for your evidence today. On behalf of the committee, I thank the Non-Smokers Rights Association.

We now welcome representatives from Tennis Canada, including the president and CEO, Mr. Bob Moffatt.

Welcome, Mr. Moffatt. Please introduce your colleagues for us, and if you have a statement we'll hear it. Then we would like to put some questions to you.

Mr. Bob Moffatt (President and CEO, Tennis Canada): Thank you, Mr. Chairman. We appreciate the opportunity to come before you and provide you with our understanding of the implications for Tennis Canada.

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It's a pleasure for me to introduce to you Jane Wynne, who is the tournament director for the Canadian Open in Toronto; and Richard Legendre, the Montreal bureau chief and tournament director for the Canadian Open in Montreal.

My name is Bob Moffatt, and I am the president of Tennis Canada.

Tennis Canada is a federally incorporated, not-for-profit amateur sport association, responsible for the promotion and development of tennis in Canada. Our membership consists of the ten provincial associations, as well as the Yukon and Northwest Territories.

We have offices in Toronto at York University, and of course the marvellous new Jarry Park Tennis Centre in Montreal.

Our organization has been in existence for 106 years and was a founding partner of the International Tennis Federation. Our two major championships for men and women, currently referred to as the du Maurier Opens, have also been in existence for 106 years. These two tournaments are major international events in the world's sporting scene and are only one small step below that of the four grand slams, which of course include Wimbledon, the French Open, the U.S. Open and the Australian Open.

We are here today to express our concerns about the future of our tournaments and the impact their loss or diminishment might have for Tennis Canada and the sport of tennis in this country.

We simply cannot believe those proposing this legislation are fully aware of the detrimental effect this legislation will have on our association, as well as other organizations across Canada.

Many years ago it was the collective view and objective of our association to become independent from government funding and chart a course that would provide financial stability and growth long into the future. We believe we have achieved some success with that strategy but now find that our future is seriously threatened by Bill C-71.

It is important to emphasize that our two major championships are not ends in themselves but rather the means to pursue the mission the association has set for itself, which is to encourage participation and excellence in the sport at all levels.

In this respect, the two championships in Toronto and Montreal are organized and operated with the purpose of generating a profit. In 1996 the combined profit was approximately $2.5 million. This surplus and the approximately $380,000 we receive annually from Sport Canada are used specifically to advance our mission throughout Canada.

As a matter of interest, the combined profit has grown steadily over the years and has in fact doubled since 1987.

World-class championships such as ours are costly to organize and operate. We function in a truly global marketplace, and to maintain our status and position in it we have to continually increase our expenditures in critical areas to ensure we meet the international requirements and expectations of the competitors, as well as the tour organizers. If we fail in these efforts - and I emphasize this point - there are numerous other cities around the world that would be delighted to assume our slot in the world calendar.

We believe we are extremely fortunate to have found a partner in Imperial Tobacco, who for the past 18 years has believed in our pursuit of international excellence and has been willing to commit ever-increasing funds in support of the professionalism and quality our championships demand.

It may be helpful to note that although their financial participation has increased dramatically over the years, the visibility they receive has not increased in proportion. I might mention that in 1988 their contribution was in the neighbourhood of $1.5 million in sponsorship funds to Tennis Canada. It is now close to or exceeds $5 million per year.

In these circumstances, we are certain that Imperial Tobacco will not accept the restrictions imposed on them and us by the provisions of Bill C-71. For example, why would they continue to commit to a $5 million per year sponsorship for 10% of the visibility on posters and signage that would be dictated by the new legislation?

It is preposterous to suggest that it would still be an attractive investment for these companies or have a similar commercial value to current sponsorship arrangements. With all due respect, on what basis have the restrictive measures been advanced? Why is it a restriction of 10% rather than 15%? What grounds or evidence has the government produced in support of their legislative package? The answer is none so far. How can that be acceptable, given the enormity of the issue and the consequences at stake?

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From time to time, it's been said that if Imperial Tobacco or any tobacco company does not sponsor these championships, there must be other companies in Canada or elsewhere that would be willing to step forward in their place. Let me assure the committee that we are actively seeking sponsorships on a regular basis in Canada as well as in Europe and in the United States, and no company, in our experience, has indicated a willingness to assume the same considerable financial obligations as Imperial Tobacco.

We are confident in telling you that Imperial Tobacco's sponsorship of the Canadian Opens is unequalled by any tournament at our level anywhere in the world. To replace a $5 million sponsorship in Canada is doubtful at best, and most likely impossible.

Furthermore, it is crucial to underline the fact that as soon as the legislation is passed, Tennis Canada will be only one of over 300 organizations seeking to replace over $60 million in tobacco sponsorship in Canada at the same time.

Tennis Canada is mindful of and sensitive to the health issues regarding tobacco use and its effects, particularly for young people. We also know that participation in sport and peer pressure are significant factors in why people reject or participate in tobacco use.

Our programs, events, and activities, organized in every province and territory in Canada, involve thousands of boys and girls under 18 years of age. These programs include everything from national junior championships beginning at the under-10 age level to coaching certification courses, and Play Tennis activities to encourage participation at community clubs, parks and recreation centres. They eventually culminate at the high-performance level with our international team competitions, such as the Davis Cup for men and the Fed Cup for women.

We believe these programs and events serve as a deterrent to tobacco use by advocating a healthy lifestyle and specifically encouraging young people to participate in the sport of tennis for a lifetime. There is absolutely no commercial promotional or visible connection between these activities and the organization of the du Maurier Opens in Toronto and Montreal.

The facts are, of course, that the profits noted earlier from the operation of these two championships allow us to undertake this extensive array of activities across Canada and send a clear message to our youth regarding the benefits of participation in sport and recreation.

We expect that these activities will be seriously compromised if Bill C-71 is passed in its present form, since the funds contributed towards them will be significantly reduced or, in most cases, completely eliminated.

For these reasons, we think it's critically important that the government proceed with a great deal of care and caution, particularly with respect to the restrictions on tobacco companies' sponsorship of arts, cultural and sports events. It's possible that the effects of the legislation may be far more damaging than the problem the government is seeking to correct. The ends, in other words, may not justify the means in these rather special, unique circumstances.

Furthermore, so far in the debate, the government has failed to produce evidence that tobacco sponsorship is a factor or a problem in the ongoing war on tobacco use. It appears to be included in the larger legislative strategy proposed by the Minister of Health without substantive grounds for its inclusion, other than that this comprehensive package respects the guidelines established by the Supreme Court. The minister has not given the public or Parliament any indication of what this program will achieve in measurable terms if Bill C-71 is passed, and this omission raises serious questions about the purpose and timing of the government's strategy.

At the very least, we feel these questions and matters require further consultation, research and study before Bill C-71 is passed and the minister is given extensive regulatory powers that will effectively remove the issue from public scrutiny or debate in the future. After all, this matter has been before the Ministry of Health for over a year and virtually no information has been shared or discussed to any meaningful extent.

We believe the circumstances that we at Tennis Canada find ourselves in at this time are unprecedented and unique to our organization. This past summer we completed construction of the new Jarry Park Tennis Centre in Montreal. We are most appreciative of the substantial support we've received from the Government of Canada, the Province of Quebec, and the City of Montreal, through the federal-provincial infrastructure program. We are also appreciative of the $5 million in corporate contributions we've received from du Maurier, Bell Canada, and the Laurentian Bank in order to finish the construction of the $24 million complex. The facility has been a great success even in its first few months of operation.

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As you can imagine, it would be a perverse irony if this facility, which has been praised around the world by players and organizers alike, were no longer the site of our international championships. If Bill C-71 impacts on us as we suspect it might, it is possible the Jarry Park Tennis Centre will become the location for a relatively minor event, one that draws 5,000 spectators, for example, in a stadium designed to accommodate 11,000. We believe this outcome is not beyond the realm of possibility, and it therefore reinforces our insistence on a thorough examination of Bill C-71, including its effects and objectives.

Finally, although we understand the House is seeking fast passage of Bill C-71, we would like to leave you with some thoughts and recommendations we hope you will find time to consider. First, Bill C-71 should not be fast-tracked simply because the government has been delayed in preparing the legislative package over the past year or because the government feels it's responding in a timely fashion to the realities of political or public pressure. Specifically, the provisions relating to restrictions on sponsorship should not be permitted to proceed as they stand until further intensive examination has been completed.

Secondly, after a year in the making, Bill C-71 is a scanty legislative framework that is short on substance but notably strong on transferring essential powers to the minister and cabinet for further regulatory action. Maybe that's the purpose, but it creates an atmosphere of uncertainty and indecision for those of us who will be dramatically affected by the bill and the supporting regulations.

Third, we believe Bill C-71 and its implications, particularly related to promotions and sponsorship, should be thoroughly examined, researched, debated, and amended before third reading in the House of Commons in order to assess the effects it may properly have and, I emphasize, the effects it's supposed to have.

Fourth, if Bill C-71 is passed without further amendments, which we trust will not occur, and subsequently passed by the Senate, we emphasize the absolute necessity for the government to try it for a reasonable transitional period - we're proposing five years or a grandfather solution similar to what Robert Kerr raised before you earlier - for those organizations affected by the sponsorship provisions. Although it would not be our preferred course of action, at least it would ensure some organizations would have enough lead time to pursue new sponsorship agreements. I remind you all of the Australian regulations and legislation, which do provide exemptions for certain international sporting events in Australia sponsored by tobacco companies.

Finally, we urge you to reconsider this legislative package, particularly the proposed restrictions on tobacco sponsorship, and trust the proper deliberations will occur in time to prevent a major dislocation for hundreds of organizations in Canada.

I would like to turn to Richard, who has a brief statement to make en francais.

The Chairman: In a moment, but we've been making the point throughout the day, and maybe we ought to make it again, that I'm sure you have views on the issue, but this is not first and foremost a forum for stakeholders in the tobacco industry; this is a committee process. The committee has invited you here to give us the benefit of your observations, and you prevent us from doing that if you talk all the time. We need some time to ask questions. So if Mr. Legendre could be fairly brief, we could get to the questions.

Mr. Moffatt: We'll be very brief, Mr. Chairman.

[Translation]

Mr. Richard Legendre (Director, Montreal Tournament, Tennis Canada): I think I may surprise you but I'm going to talk about something that you will certainly find of interest. Health and tennis.

I don't smoke and the reason for that is that as a teenager I played tennis. Nobody ever prevented me from smoking, but playing tennis and smoking were simply incompatible.

However, I was lucky because at the time organized tennis was rather a modest proposal. Since then, tennis has grown in Canada and thousands of young people now have the opportunity I had.

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Even if tennis has grown, we should say that it's mainly thanks to the lightning like development over the last few years of the Canada Tennis International Tournaments sponsored by Imperial Tobacco for the last 18 years. The du Maurier Open also promotes our sport and encourages young people and adults to play. It motivates our young people by showing them the best players in the world. The du Maurier Open is a major source of profits that are reinvested in the development of our young people. For example, here, in Montreal, there is a exceptional public centre, the Jarry Park Tennis Centre, where every day over 300 people, 100 of them young people, play tennis. The du Maurier Tennis Open has allowed us to grow and thus contribute to the health of hundred of thousands of tennis players.

Let me quickly read a short testimony:

Every summer for a number of years now my family and I have attended the Canada Tennis International sponsored by Imperial Tobacco. Today my son Jocelyn is the best junior doubles player in the world. In spite of countless hours spent in front of the Players and du Maurier advertisements, no member of my family smokes or has smoked. The du Maurier Open and the athletes participating in this event have, through their positive image, greatly contributed to the development of Jocelyn's career.

Signed Pierre Robichaud, physical education teacher and father of Jocelyn Robichaud, Canada's best junior player.

Tennis and tobacco, is it a paradox? Certainly, but a paradox very much to the advantage of the citizen and the community. Thank you.

[English]

The Chairman: I have several members who want to intervene. I ask each of them to be quite brief.

Mr. Dubé

[Translation]

Mr. Dubé: How much time do we have each?

[English]

The Chairman: Altogether, twelve minutes for six of us.

[Translation]

Mr. Dubé: I'd like to thank you for the basic points of your presentation, namely points 1,2,3 and 4 which are recommendations.

I very much appreciated your testimony, Mr. Legendre. You were ones of Canada's top tennis players and an excellent commentator. I might mention that I like playing tennis myself.

Having said that, you indicate some openness like most of those witnesses who have spoken in favour of the bill and the principles and aims it sets out with respect to health. Our main restrictions relate to sponsorship. You talked about a reasonable transition regime and I also felt there was some desire to maintain the status quo. It seems to me that if the minister had been willing to devote more time to this, and that is where the problem lies, it probably would have been possible to come to an understanding on the details of sponsorship.

Unfortunately we'll have to report very soon, in the next several hours, and begin our clause-by-clause study of the bill. So I'd like to ask you to explain quickly your fourth recommendation on a period of transition and tell us what exactly you mean.

[English]

Mr. Moffatt: I'm proposing here that if all else fails, although we would prefer as our first course of action that further study and examination occur, because we don't believe enough has occurred at this stage...but failing all that, and if this body approves and the House of Commons approves by proceeding with third reading passage of the bill and it's further passed through the Senate, then what we're suggesting to you in those circumstances, which we do not support, is that at the very least the Government of Canada has to provide for some transition period for those organizations affected, whether it is a period of five years before the legislation or policies take effect or, for example, whether certain organizations or events are granted a grandfather clause from it for the life of the contract.

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The Chairman: Mr. Hill.

Mr. Hill (Macleod): Thank you, Mr. Chairman.

Because you're involved in the international aspects of tennis, I'm sure you'll know that the Australian Open used to have a tobacco sponsor and now has a non-tobacco sponsor. The women's international circuit was sponsored by Virginia Slims and is now sponsored by Corel. What I'm getting at is that you have a very high-profile sport.

You said there's a contradiction here. I can't imagine that Australia is not going through exactly what we're going through here today. Can you tell me that you will not find a sponsor for your event that would be more appropriate?

Mr. Moffatt: All we can tell you, sir, is that we spend a great deal of time in the marketplace in Toronto and Montreal, as well as overseas and in the United States. We do know what the value of sponsorships is out there, worldwide, for events of our size. I cannot say that I'm 100% certain we would not find a replacement, but all the indications are that if the sponsorship were replaced, it would be at a significantly lower level than we now enjoy.

Mr. Hill (Macleod): Has your tobacco sponsor said they would wave goodbye to you?

Mr. Moffatt: I'm not certain that they have said that, but they have certainly indicated to us that given the commercial value they see already in the legislation, their participation would not be at the same level in the future.

Mr. Hill (Macleod): Do you remember the same debate going on with Bill C-51?

Mr. Moffatt: Not specifically, no, I don't.

The Chairman: Andy Scott.

Mr. Scott: Thank you, Mr. Chair.

Do you accept the tobacco industry's argument? It has been put to us that they're not trying to attract new smokers but are simply inside of their existing market. I presume you have thought about this.

Mr. Moffatt: In the absence of any evidence to the contrary, we do accept that. It has seemed reasonable. In fact, du Maurier has been very forthright with us in telling us how their market share has increased dramatically over the past ten or twelve years. In fact, it's gone from, as I understand it, below 50% to approximately 63%. Obviously they see that as a significant advantage for their revenue sources.

Mr. Scott: In terms of new consumption, they are obviously adding to their numbers. Don't you see any relationship between that and what you do?

Mr. Moffatt: Not particularly.

Mr. Scott: Would you accept the fact that there's an inconsistency if we're trying to tell people smoking is unhealthy while tennis is being sponsored by tobacco manufacturers? Can you see that inconsistency?

Mr. Moffatt: We all live with a certain degree of paradox from time to time. The funds that we get from the operation of those events are used for a good cause. In fact, I don't think anybody out there would see youngsters between the ages of 10 and 16 who are participating in the sport smoking at tennis clubs or at recreation centres across this country.

Mr. Scott: I don't think the participants are the people they're trying to attract. I think the participants realize that it is unhealthy to smoke and are probably less likely to smoke. There are a lot more people in the stands than there are on the courts.

Ms Jane Wynne (Tournament Director, Canadian Open, Canadian Tennis Association): A very small proportion of those people in the stands are children. I believe we've recently done a survey. It might be 5%, but it's no more than that.

I have two daughters and am very much anti-smoking. I've never smoked myself. However, I have to say that I cannot believe that one child coming to this event would start smoking because of the red and black colour scheme or because of the du Maurier banners. I just cannot buy that.

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Mr. Scott: The problem is you're speaking to an audience here around this table that - all of us - invest enormous amounts of money in little lawn signs to put all over our ridings at election time.

Mr. Moffatt: And it doesn't work.

The Chairman: Andy, you're out of time.

Mr. Scott: Thank you.

The Chairman: We'll go quickly to Joe Volpe.

Mr. Volpe: I have a couple of quick comments.

Since we didn't address the substance of the legislation but the outcomes, I wonder - because we've heard other views today - is it your opinion that the legislation is scanty and skeletal, or is it complex and complicated?

Mr. Moffatt: I'm not a lawyer -

Mr. Volpe: But you did say scanty.

Mr. Moffatt: I believe it is not very substantive. In my opinion, it simply passes the buck to the health minister and the cabinet to create regulations that will obviously fill in the gaps that are there in the legislation now.

Mr. Volpe: So if there hasn't been a lot of time allotted for this, in your view, do you feel that your group has much more to address in this legislation that this hearing hasn't given it time to address?

Mr. Moffatt: We are certainly prepared to sit down with anybody at any time and have those discussions if it will help.

Mr. Volpe: No, I'm talking about the legislation, because that's why you came here. You have gotten everything off your chest and you've made all the observations you needed to make on this bill.

I have one comment, and it's an observation. We're talking about sources of funding, but the Stade du Maurier, for example, will still be allowed to carry the name. It's just a reflection on my part and you don't have to comment if you don't want to, but I think in the construction the federal government put up about $8 million and du Maurier put up about $1 million -

Mr. Moffatt: Sorry, what?

Mr. Volpe: One million dollars.

Mr. Moffatt: No, $3 million.

Mr. Volpe: Okay. Half of it was written off, so the Canadian taxpayer picked up the other half.

Mr. Moffatt: I don't know what was written off or not.

Mr. Volpe: I would imagine it would have been. I want to put that on the record as well, just so we understand that when we raise funds, there is always somebody else there who's going along with the fund-raising process and that things are not as calamitous as at least I've heard from all sides today.

I wonder whether we get ourselves going down a road a little like a snowball going down a hill, picking up steam. I wonder where it's all leading.

I said I wanted to make a comment; you don't have to respond.

The Chairman: If you want to comment...but we are out of time.

Bonnie Hickey.

Mrs. Hickey: Thank you.

Mr. Moffatt, as you develop the tennis event, the tobacco company also increases the value of their products, products that cause health problems to Canadians.

Does your organization understand or recognize the damage that smoking causes Canadian health, and does it not bother you that your company promotes the tobacco companies who want to increase their revenues through your products?

Mr. Moffatt: We're certainly aware of those things that you say.

As Jane commented earlier, we don't believe the sponsorship of our event is a significant factor in causing smoking uptake or tobacco use.

Mrs. Hickey: Thank you.

The Chairman: I have a couple of questions.

Mr. Moffatt, you talked about ``in the absence of evidence to the contrary''. Let me give you this bit of evidence and see what your reaction is. Earlier, in your opening statement, you talked about what you termed as the tobacco company's investment in those events. Investment connotes there ought to be a return.

Deal with these figures here. The tobacco industry itself today, through Mr. Robert Parker, the president of the Canadian Tobacco Manufacturers' Council, indicated that a 1% shift in tobacco market share represented $22 million. He also indicated that 90% of the smokers were locked into a brand; by implication, there's only 10% left to fight for. That 10% times $22 million leaves a total amount of $220 million to scramble over, to elbow each other out of the way for. That's $220 million worth of market share.

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You are aware, of course, that tobacco companies spend in excess of that amount on marketing their products, either through sponsorships or otherwise. So if you're looking for evidence to the contrary, isn't there evidence in what I say, which is that tobacco companies are actually spending more in marketing than the amount they tell us is up for grabs?

Mr. Moffatt: I hear you. I can't comment on that, because I don't know what the numbers are that the industry does spend on advertising and promotion. I do know what they spend on sponsorship.

The Chairman: They say they spend $50 million to $60 million on sponsorship, but they spend more than that, of course, on advertising outside of sponsorship.

You also talked, Mr. Moffatt, about the consequences at stake. I believe the context at the time was about the consequences to sponsored events. But of course you'll be aware that there are other consequences here.

You talked about passing the buck. Frankly, I can't think of any person better to pass the buck to on a health issue than the Minister of Health. I think that's very good buck-passing. If politicians usually passed the buck that well, we'd be in a lot better shape than we are generally.

The government and legislators are trying to take an initiative here, because there are consequences at stake. I want to come to the question of the 40,000 people who die as a direct result of smoking. That's a consequence that's at stake too. That's why we're here. It's not because we're malicious and want to wipe out any events or make them less possible. That's a consequence.

If you would, I'd like you to tell us your real message today. Let me be blunt to make my point. Is it that 40,000 will die, but you need the money? Could you address your concern for sponsorships in the context of what we're really up to here?

Mr. Moffatt: We support the government's objectives. That's not an issue we wish to debate. We absolutely support that.

What we're talking about is the means, sir. We just want to ensure that those of us who are involved in sponsorships across this country, who have built them up, are not going to lose them without some foundation, substance and evidence in support of it.

There may be some other ways to address this issue. I'm not sure that it has been examined in enough detail.

Neither have we seen, for example, information on the actual results or effects of advertising bans or eliminations in other countries. How does that affect consumption? We haven't seen that information yet.

We fully support the government's objectives. We are here today to say to you that we are in support of that, but we're concerned about our own life and survival too.

The Chairman: My own solution on this particular issue of sponsorships was not accepted by the powers that be. I advocated a total ban on sponsorships and then replacement funding for a period of time to allow the recipient groups time to adjust, such as maybe five or six years. If that were in the legislation - a total ban along with replacement funding from government - would you be here today?

Mr. Moffatt: Probably.

We'd be concerned about the issue of replacement funding, for one thing. How long would it be there for? Why is it there? How is it going to be distributed? Is it going to be there for other organizations as well? There are questions that are raised by that answer too.

The Chairman: I thank the witnesses for taking the time to share their views with us. Thank you very much.

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Now we have Artists for Tobacco-Free Sponsorship. We welcome several individuals. I'm not sure who your spokesperson might be.

Dr. Jack Micay (Member, Artists for Tobacco-Free Sponsorship): Thank you, Mr. Chairman and members of the committee. I'm Jack Micay and I'm a documentary and educational film-maker. With me are Charles Montpetit, a Governor General's Award-winning writer and stage performer from Montreal; Andrew Cash, a Juno Award-winning songwriter, rock musician, and journalist; and Alain Poirier, host of two programs on Radio-Canada, Comment ça va? and M'aimes-tu?

We are members of Artists for Tobacco-Free Sponsorship, which is an alliance of 300 Canadian artists from all branches of the arts and from both English and French Canada. Our group includes such prominent Canadian performers, artists, and writers as Anton Kuerti, the well-known pianist, singer-songwriter Nancy White, of CBC fame, and writer and journalist June Callwood.

Time permitting, at the end of our presentation I would like to play a short video statement from a few of our better-known members who wanted to be here but couldn't make it today. We have also tabled a list of our members and statements they have endorsed, as well as some other documents.

Our group came together to counter the false impression the tobacco industry has tried to create that the arts community is united in support of their sponsorships. Our group is a small sampling - just a sampling - of the many members of the arts community in Canada who also feel there's a fundamental incompatibility between the life-enhancing purpose of the arts and the promotion of cigarettes, which is what tobacco sponsorships are all about. We are here to support effective legislation that will prevent the tobacco industry from cynically enlisting arts groups to help them sell their addictive and deadly products and to act as their public defenders. We have no vested interest in this, unlike the sponsored artists, so you can be assured we are truly speaking from the heart.

I'll now pass it over to Charles.

[Translation]

Mr. Charles Montpetit (Spokesperson, Artists for Tobacco-Free Sponsorship): Generally speaking, it's a well known fact that artists suffer from a chronic lack of funds and tobacco companies are aware of this. In exactly the same way cigarettes create an addiction among smokers, sponsorships do create a financial dependency in artistic circles. Even worse, they distract attention from the real problem.

Sponsorship allows people to make use of us artists and entertainers to say: ``Don't think about all those people who are dying. Listen to the music! Enjoy the show! Listen to the people laughing!'' We think that this is a deplorable attitude and it's not much better being an accomplice. Is it enough to invest money in an artistic endeavour to make people forget about the sombre side of the industry?

As artists we do not want to be associated with these tactics. Through the use of sponsorships, the industry is already trying to deter artists from taking a stand on tobacco and displeasing tobacco companies. Or even worse, as we have seen here today, this is forcing artists to come before your committee and defend the industry, something they would not normally do in other circumstances. It's an absurdity because art exists in order to improve people's lives, not to destroy them. This is the message we would like you to remember today.

[English]

Mr. Andrew Cash (Member, Artists for Tobacco-Free Sponsorship): While we support the government's Bill C-71, we don't feel it's the ideal solution to the sponsorship program. We're particularly worried about two specific points.

Bill C-71, while proposing restrictions on tobacco sponsorship, still gives the industry enough room to continue its association with the arts. There's the fact that the government offers no replacement for the source of funding that may or may not be discontinued even while feasible plans were offered that would replace lost tobacco money at no or very little cost to the Canadian taxpayers. We would have wanted to see a complete ban on sponsorship and that mechanism to replace the lost funding.

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We believe the tobacco industry is sure to exploit the loopholes in the new restrictions to tobacco sponsorship. To make up for lost exposure, they will undoubtedly attempt to create more sponsorship opportunities in the near future. This in turn will not only increase the image of tobacco as an acceptable product, but it will also create more dependency within the arts community.

We in this group have never put forth the argument about sponsorship that says if a kid goes to a sponsored event, then that kid is going to walk out of the event and go buy a pack of cigarettes. That argument has never been put forth by this group.

However, being a rock musician from an arts sector directly involved with, and obviously appealing to, young people, I would love to tell you about how the tobacco industry targets young people through the sponsorship of rock and roll.

[Translation]

Dr. Alain Poirier (Artists for Tobacco-Free Sponsorship): We are not advocating dependency for anyone, either the population or the artists. I just wanted to mention that for a number of years I hosted a television program aimed at raising $1 million a year in sponsorships but of course it was never from the tobacco industry because this was on television.

Let met remind you that when tobacco advertizing was prohibited on television at the end of the 60s, the catastrophe that was supposed to hit the television industry was similar to the kind that is being announced now. It was claimed that television jobs were going to disappear and that the television sector would face a major problem. What actually happened is something quite different. There are dozens of television channels entering our homes.

One day, we hope that there will be a full prohibition of sponsorship by the tobacco industry, as is now the case on television. What will happen in the meantime if sponsorship continues to maintain the volume of smokers by attracting young people? It's never been said that sponsorship does attract young people directly but we must realize that it operates in a very subtle manner but it is just as effective as advertizing.

It is not just something that I'm saying. Three years ago, for the purpose of finding sponsors, I decided to take a course from the sponsorship specialist Mr. Vincent Fisher from the University of Montreal. He explained that sponsorship is all the more effective and subtle because modern advertizing generally does not offer any information about the product. It simply attempts to create a favourable image. The less use there is for the product, the greater its dependence on image for sales. In this respect, sponsorship and advertizing operate in the same way on young people. It's not my view I'm expressing here, but Vincent Fisher.

So sponsorship would have continued to maintain the volume of smokers by recruiting young people and, as Andrew said, would have made even more difficult the withdrawal of this type of funding from the arts.

Unfortunately, it appears the government has not chosen an outright prohibition. That is not one of the measures you are proposing. In the circumstances, if the government opts for a partial prohibition, we think it is important to avoid any worsening of the present situation, even though partial prohibition is not our first choice.

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Our second recommendation would be that no new event benefit from tobacco industry assistance and that sponsorship budgets be frozen at the 1995 level before the minister tables her famous blueprint or action plan. We know that since it has started feeling threatened, the industry has been increasing the amount. So we recommend freezing this amount and not allowing any new activity, as a reasonable approach to preventing any increase in the present level of dependency.

Thank you, Mr. Chair.

[English]

Dr. Micay: Mr. Chairman, with your indulgence, we'll briefly show a bit of the video. I'll take my cue from you.

The Chairman: Jack, we're not short on indulgence; we're short on time. So we'll watch the film, but it will mean that we'll only have five or six minutes to question you.

Dr. Micay: It's short. If you want me to stop it, I'll stop it.

The Chairman: How long is it?

Dr. Micay: It's six minutes.

[Video Presentation]

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[Translation]

The Chairman: Order please. I'll now give the floor to Pauline Picard, Grant Hill and John Murphy.

Mrs. Picard: Good afternoon, gentlemen. I agree with you, if we were able to rid the planet of cigarettes, it would be a blessing for everyone. But it's utopian to imagine that such a thing could happen.

I'm not really convinced by your testimony about sponsorships in relation to the arts. Since the committee has begun its proceedings on this bill, for a number of months now, we have been overcome by groups of artists and groups representing sports and cultural organizations telling us about the danger this represents for them.

I don't really agree with you when you say that sponsorship can create a chronic dependency among artists. I think that it's really a means of survival in their case.

You say that there could be other sources of funding. I'd like you to tell us exactly what these other possibilities for funding would be. At the present time we are facing a serious problem. If tobacco manufacturers put an end to their sponsorship, what is going to happen to the Just for Laughs Festival? In Montreal in particular, it would be an economic catastrophe for all sorts of activities, for sporting and cultural events. I'd like to know what solutions and traditional measures you have to propose to avoid a collapse of these activities in the coming months.

I'd also like you to submit to me, if you can, a serious study demonstrating that the sponsorship of large events like the Just for Laughs Festival, sponsored by Craven A, results in increased tobacco addiction among young people because of the display of the tobacco manufacturer's name and the fact that it is sponsoring the festival.

The serious studies we received to date demonstrate that sponsorships may at the most encourage smokers to change their brand. So tell me about your solutions. Thank you.

Dr. Poirier: As far as studies go, it's always difficult to find studies dealing with an instance of sponsorship and a certain type of consumers. There is no one making such a claim among the anti-smoking advocates present here. It is not done. You can't say that because I attended a tennis match, I started smoking. I myself like tennis and concerts but I don't smoke. So there is no direct link, and the same holds true for advertizing. If you see a ketchup add, that doesn't mean you'll go out and buy some ketchup the next morning. That isn't how advertizing or sponsorship works.

We do know, for example, that generally speaking, the marketing of a product, whether through sponsorship or advertizing, operates in a subtle but efficient way to transform a social norm. A young person who sees a billboard with Jacques Villeneuve says four out of five times - I checked this with my 8 year-old son and 10 year-old daughter - that this is a tobacco ad.

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It is possible to find out from young people and the population at large wether they think that tobacco is really dangerous. I'm giving you indirect evidence rather than the findings of direct studies. People answer that tobacco certainly can't be that dangerous since the government does allow it to be advertized and sponsorships are also allowed.

There are four countries that have conducted a fairly systematic monitoring of the connection between advertizing and consumption. When I say systematic, I mean that there are more than 100 countries with tobacco legislation. Some of them have been able to isolate the effect of advertizing on consumption. The lowering of tobacco consumption as a result of advertizing restrictions varies between 4 and 9%.

Since 1993 observations have also been made in other countries like France. However, since other measurements were associated, it is difficult to say exactly what proportion can be attributed to sponsorships. We cannot determine what exactly the effect of sponsorship alone is but we do know that the social norm may be transformed in a given society. This is something that can be observed everywhere. You can ask a question to whomever you want, 50% of respondents will say that it can't be that dangerous because it's available everywhere.

[English]

The Chairman: We'll go to Dr. Hill now, please.

Mr. Hill (Macleod): I asked the Alliance for Sponsorship Freedom where it was funded. You have a pretty nice document - glossy and what not. Could I ask you the same thing? How have you been funded?

Dr. Micay: We fund ourselves. We've also received some assistance from the health community, mostly in the way of services to help us organize. But in terms of actual money, very little money has been spent.

Mr. Hill (Macleod): Have you had enough time to review this legislation to make suggestions and present them to this committee? Has it been too rushed for you?

Dr. Micay: Speaking for myself, I feel there has been enough time. I'm also acutely aware of the risks of delay, both in terms of health - the recruitment of more kids into the market at the rate of 10,000 a month - and also in terms of allowing the powerful lobby of the tobacco industry to mobilize and lock this bill. So I'm in favour of speedy passage.

The Chairman: John Murphy.

Mr. Murphy: Thank you, Mr. Chairman. Thank you for a fine presentation.

I live in the Annapolis Valley, and about an hour ago I called Michael Bawtree of the Atlantic Theatre Festival just to find out what their position was on this. I was glad to learn it does not entertain tobacco sponsorship. It's against the rules and part of its policy.

I do feel badly for the arts community, the sports community and culture, because the tobacco companies have captured them. They sit here, unfortunately, having to defend the tobacco companies. It's not fair at all. They're caught.

You mentioned a couple of solutions. I'm wondering if there are any other kinds of interventions you might see that could help the present users, who are caught with these tobacco companies, try to work themselves out of it. I'm not even suggesting we stay with the tobacco companies.

Mr. Montpetit: As we specified at the end of our presentation, we recommend that the current sponsorships that were in place in 1995 be kept. We shouldn't endanger festivals like the Just for Laughs Comedy Festival, but we would like this to go no further.

There is absolutely no argument that can be made from the people who are currently being sponsored, who have appeared before you today, that they will lose their funding, according to our recommendations. We recommend they don't and that the funds for this kind of sponsorship be frozen at the present level in order to keep the problem from getting worse.

Dr. Micay: I don't think you would be doing the arts community a favour by allowing dependency on tobacco money to continue into the future, because it's inevitable that at some point it will have to go.

That is the way the world is going. In Australia, New Zealand, France - even now, the United States - sponsorships are on the way out. The longer you wait, the more dependent arts groups will become and the harder it will be to withdraw. It may be painful now, but I think it will be more painful in the future.

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Mr. Murphy: Really your solution is...you're divided.

Dr. Micay: I would like to see a cap so that things do not get worse, but I believe they will get worse without a cap.

Mr. Cash: We state clearly that we see as a very real solution, which I think the Ontario Campaign for Action on Tobacco put forward to the Ministry of Health during the whole process, the building up of an endowment fund that would operate outside of government, much like the endowment fund that the Ontario Arts Council has that operates outside the funding that the Ontario government gives the OAC. We see that as a very real, feasible alternative.

The chair of the committee mentioned that himself, and it is something we have supported. I must say I've been very frustrated in getting this out. Quite frankly, it mystifies me why we haven't been able to band together as artists and really say that clearly to the government. I think that would have been and possibly still is the answer, taking the surtax that the federal government has already taken on the after-tax profit of the tobacco industry and channelling that into an endowment fund for five years as it builds up, and there we have it. I really think that's our answer to this issue.

Mr. Murphy: Thank you very much.

The Chairman: We thank the witnesses for coming, for taking the time. Your evidence has been helpful. Thank you very much.

We invite now the final set of witnesses for today, from Health Canada. Join us at the table.

Welcome, once again, from the Department of Health, Judy Ferguson, director general, health policy and information; and France Pégeot, the director of the office of tobacco control.

Maybe I could say a word at the outset of this session. I expect it can be a very brief session.

The purpose of inviting the witnesses from the department to come back here at this time - because they did spend some time with us on Friday morning - is in the light of evidence the committee has received to put two questions. First, a question to the witnesses here today, right now, as to whether there's anything they wish to comment on in what they've heard over the last couple of days; and secondly, to put to the committee members the question, is there something you'd like to raise with the witnesses from the Department of Health in light of what you've heard in the last couple of days?

As I said, it need not be a long session, but I felt it was important that we at least give an opportunity for each side.

Judy.

Ms Judy Ferguson (Director General, Health Policy and Information, Department of Health): Thank you, Mr. Chairman. We have not had the opportunity to follow every detail of the presentations that have been made to the committee. But to the extent that we have been briefed on some of the comments that have been made, I would like to briefly mention a couple of things and then turn the session over to direct questions.

I think one of the issues that has been consistently raised has been whether or not the measures contained in the bill would be effective. Certainly we have heard on numerous occasions that the industry has consistently maintained that the ad ban was not effective and that perhaps this piece of legislation would not be as well.

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I think it's important to keep in mind that the ad ban that was imposed through the Tobacco Products Control Act did not end promotion. Sponsorship promotion was used extensively in the absence of product advertising, and in fact replaced product advertising, in what we think is a very pervasive and extensive fashion, to keep tobacco very prominent as an element of our landscape.

Numerous countries that have tobacco control strategies have introduced measures dealing with sponsorship promotion as well as product advertising, but particularly sponsorship promotion. I think this acknowledges that this form of promotion of tobacco is a fairly important influencing factor in the decision to smoke.

I guess as a last comment on effectiveness, the Supreme Court of Canada was quite clear in recognizing importance of the health objective of the Tobacco Products Control Act and said that even a small reduction in consumption warranted restriction of the tobacco companies' freedom of expression.

I think this legislation, in concert with the other elements of the government's broad strategy, which includes taxation measures as well as public education, will have the desired effect.

The Chairman: Thank you.

[Translation]

Mrs. Picard, do you have any questions?

Mrs. Picard: Not right now. I'm thinking it over.

[English]

The Chairman: Grant Hill.

Mr. Hill (Macleod): I would like just a little clarification if I could. In subclause 8(1) it says,

8.(1) No person shall furnish a tobacco product to a young person in a public place or in a place to which the public reasonably has access.

Later on we talk about a penalty in clause 45. I'm concerned that this means a $3,000 fine could be given to someone passing a cigarette casually to an individual in that location. Is that the rationale? Is that the direction in which the government wants to go?

Ms Ferguson: No. We dealt with this issue to some extent on Friday. The emphasis would very much be on commercial activity - retail transactions. Prosecution and fines would certainly be a last resort. We would be looking primarily at voluntary compliance and warnings before ever going to the point of applying the clauses dealing with fines and penalties.

Mr. Hill (Macleod): Do you think the retail transaction should be spelled out here?

Ms Ferguson: If it clarifies the intent and the provision, I think it's something we would want to look at.

Mr. Hill (Macleod): There's some concern that subclause 18(1) would cover anti-tobacco ads as well as the type of ads I presume you're going after. Could this prevent an anti-tobacco ad being publicized?

Ms Ferguson: This particular clause is intended to not restrict the comments in an internalistic context or a scientific context. If it were in that context, I don't think it would.

Mr. Hill (Macleod): The problem, though, is that it says ``likely to influence and shape attitudes''. There's a positive and a negative. There's obviously an attitude that the tobacco company would like to put forth that its product is fine and wonderful. If somebody comes along and says the product is not fine and wonderful, there's a distinct possibility that this clause will prevent that happening.

Ms Ferguson: I think if you look at the definition of promotion, we're attempting to get at the communication of information that would influence behaviour about a particular brand or product. Again, this is very much a commercial context and doesn't try to get at expressions of opinion about tobacco that may be included in a report or in testimony before a committee such as this.

Mr. Hill (Macleod): I have one other question relating to the Hazardous Products Act, which has an exemption in it directed at tobacco. These two acts would be contradictory to one another - this act specific to tobacco. Do we need to get rid of the exemption on tobacco in the Hazardous Products Act?

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Ms Ferguson: My understanding is that we don't.

Mr. Hill (Macleod): I'm flagging that for you to make sure that you're really certain about it.

Ms Ferguson: Okay.

Mr. Hill (Macleod): Finally, then, we heard from some witnesses this morning about their particular automatic vending machines, which involve punching a button at a station that's in the vision of, say, somebody in a pool hall. Are those automatic vending machines included as well as the ones that involve money?

Ms France Pégeot (Director, Office of Tobacco Control, Department of Health): The former legislation allowed for that kind of machine. With this current legislation we're proposing to ban such machines. However, as part of other amendments we could consider amending the legislation to incorporate them. That's something we could give consideration to.

Mr. Hill (Macleod): It would seem to be a tremendous burden to this group of people who have complied with legislation from the not too far distant past.

Ms Pégeot: Yes. With respect to tobacco sales to young persons, the current act allows for that kind of device. This one would not. There are some studies, particularly in the States, that show that very often there is a high degree of non-compliance with these locking devices. That's one of the reasons we wanted to address it with this legislation. However, we could consider working with the vending machine people and we could perhaps see how to accommodate them. That's something we would definitely have to give consideration to.

Mr. Hill (Macleod): Thank you.

The Chairman: Pauline Picard.

[Translation]

Mrs. Picard: You said that sponsorships were not prohibited. However a number of witnesses have maintained that even if they are allowed under the bill, they are made impossible because of the wording of the sections and because restrictions are so severe that no sponsor would be interested in promoting an event.

So you say that it is not prohibited but when we look at the restrictions, it's as if you were telling someone he can walk in a field but he should watch out for the mines.

Ms Pégeot: It is of course of up the tobacco industry to decide whether it wants to keep on sponsoring different events. In our opinion, the bill does give the tobacco industry a reasonable amount of latitude to continue sponsoring and also to give some visibility to their sponsorship.

For example, all the participants attending an event will be able to see the name of the product brand and clearly identify the sponsors on the signs posted on the site. It will still be possible to promote events in magazines read mainly by adults. Messages can continue to be sent directly to adult consumers. That means that all subscription campaigns, for example, may continue.

So we believe we have left a reasonable amount of latitude in the legislation to allow sponsorship to continue.

Mrs. Picard: You were talking about advertising rather than sponsorship. I'm talking about the sponsorship of large events.

Ms Pégeot: Yes, that is sponsorship.

Mrs. Picard: When you allow only the bottom 10% of a display surface or page and you prohibit advertising on radio and television, then obviously this detracts from the interest in sponsoring an event. That is why the representatives of these organizations are worried about their survival because even if you don't prohibit it, the measures are so restrictive that sponsors will no longer be interested.

Ms Pégeot: Sponsorship is a key element in tobacco companies promotion strategy. In order to advance our health objectives, it is absolutely essential for sponsorship to be controlled.

Mrs. Picard: But on what do you base these measures when there is no serious study available at the present time to demonstrate that a reduction in the sponsorship of large events, and I'm speaking only of large events such as those involving the Montreal Symphony Orchestra, can have a serious impact on reducing tobacco consumption among young people? On what do you base this claim?

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Ms Pégeot: Studies demonstrate that promotion does have an influence on the process resulting in the decision to smoke. As a matter of fact, there is a bibliography of the studies supporting the different measures contained in the bill. I'd be happy to see that a copy is made available to you. Eighty-five percent of young people between the age of 10 and 19 consider sponsorship to be a form of advertising for tobacco products. The Supreme Court recognized that there is a link between the consumption of tobacco products and certain types of advertising.

Mrs. Picard: Thank you.

[English]

The Chairman: The member for Fredericton - York - Sunbury, Mr. Scott.

Mr. Scott: Thank you, Mr. Chairman.

I want to ask a couple of questions about the sanctions in the bill. In talking to some media...this might have come up, and I apologize if I missed it. One of the witnesses today spoke on the question of who could be charged and the penalties, and they suggested the tobacco companies probably could better afford to take that hit than the theatre companies or whatever. How does the bill relate to that?

Ms Pégeot: What the bill says is that basically both parties would be responsible. We believe if a party accepts money to have their events sponsored, they should be held accountable as well as the tobacco industry. As you know, prosecution policy falls under the Attorney General of Canada, so it would be up to the Attorney General of Canada to decide who they want to persecute.

Mr. Scott: Has there been any sort of public announcement to this point, to your knowledge - there is none I'm aware of - on the process that would be employed, other than the formal one, which I am aware of, with regulations and so on? There's a lot of concern about how this would unfold. To your knowledge, has anyone said anything to this point, the minister or anyone else?

Ms Pégeot: Our intention is to follow the regular regulation development process, which is set by Treasury Board and which involves extensive consultation with interested parties. There is usually the first gazetting of the proposed regulations, then there's a consultation period, then there's another gazetting.

As for the Health Canada policy on the development of regulations, very often we also have what we call an ``information letter''. It's sent to interested parties even before the first gazetting to inform people that we are about to have regulations and to inform them of our intentions.

I think we have enough room to have a full consultation and to hear about the opinions of everybody who is affected by the proposed regulations.

Mr. Scott: Has there been any discussion about the possibility of some kind of advisory group? Do you know if the minister has said anything about that?

Ms Pégeot: Can you please be a little more specific?

Mr. Scott: It occurs to me that a lot of this is practical, speaking about where ads might appear. Given the fact that there seems to be some kind of compromise here between an absolute ban that would allow continuing sponsorship, with some advertising return, if it's limited to being on site and so on, and given that's a compromise that seems to be intended, would it not be advisable to engage people who are engaged in this business to figure out how actually to do that?

Ms Ferguson: As part of the consultation process we will be speaking with all the groups affected, working out the details of what is required and setting the rules of the game, as it were.

I gather at some point this question came up when industry representatives appeared. We would be quite willing, as we indicated on Friday, even though the legislation doesn't require it...in addition to the interpretation guidelines that would be developed to supplement or clarify the regulations, we would be willing to work with industry if they are interested in developing some kind of pre-clearance mechanism that would give greater certainty before they are actually out with their ads.

The Chairman: The member for Annapolis Valley - Hants, John Murphy.

Mr. Murphy: Thank you.

My main concern as I've listened to what I've heard all day long is the whole sponsorship...from my perspective, how the culture, the sports, the arts communities have been hijacked by the tobacco industry. Now they're caught and are coming here, as I just said, to defend themselves. But they can't defend themselves, so they have to try to defend the tobacco industry.

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I gather you have been listening to some of the things that have obviously been going on here today. I think we have to try to find a solution, but I'm not sure if the solution really allows us the latitude to say that we'll give the tobacco people another four years and then phase them out. We know what that may mean in terms of the young people who may take up cigarettes. I'm just musing a bit in terms of whether or not you have seen any other interventions that we could make. I could sit here and say that maybe we should get out of the tobacco industry altogether, help support through federal-provincial taxes on the cigarette companies - I don't care what - and pull together a pool of money to allow a transition period of three years or whatever, in order to give the sporting community, etc., an opportunity to look for new sponsorships.

Then I think, too, of a chap that was sitting here -

The Chairman: Mr. Murphy, we're really out of time.

Mr. Murphy: Okay.

Just quickly, then, in terms of advisory, there was a man here from Vancouver who organizes the jazz festival. He may be of some help in terms of sitting on an advisory body to look at this. So I'm looking for any ideas beyond what's written.

Ms Ferguson: I'm not sure I have any other ideas, but to respond to your question about whether or not we have thought about these things, we have. However, we concluded that because we are allowing what we believe is reasonable scope to the tobacco companies to continue to sponsor these events and to promote these sponsored events, this kind of assistance would be perhaps a bit difficult to justify, particularly when you think about which groups would be compensated, if you will. I would suggest that we would be giving money to groups that have taken tobacco money, but what are we doing about the groups that have not? The groups in support of tobacco-free sponsorship have made a certain policy decision based on principle. To try to accommodate, I guess, the groups that have taken tobacco industry support would be at odds with that principle we're trying to uphold.

The Chairman: I'm going to allow two other brief interventions in a moment, but we have to be out of this room at six o'clock. There was an event that was to have begun here at four o'clock, but the committee pre-empted the room. We did, however, make an undertaking to be out of here at six.

I'm going to allow two very brief interventions from Paul Szabo and Harb Dhaliwal.

Mr. Szabo: First of all, I was astounded at how many people denied the linkages between the strategy and the likelihood or the possibility of affecting behaviour. Maybe we haven't done a good enough job of communicating that, but I hope we can.

The industry association said that no one could tell them how they could advertise in a form that they felt wasn't legally risky. In other words, as far as they were concerned, it was almost impossible to advertise. I hope we can answer that question. We either are going to allow advertising or we're not. I'm sure we're going to further discuss the issues of the regs and their power, but it was a concern.

The only other issue that I want to raise with you is subclause 10(1). I think I've been advised clearly enough that this is just a typo.

Ms Ferguson: It will be amended to read that the package should contain at least twenty.

Mr. Szabo: All right, I will not paint the whole document by the fact that there is a bad typo. But I do hope we're going to quickly get these things off the table, because it makes it awfully difficult for us to sit here before witnesses and to try to defend legislation that has a typo. But, again, I understand.

Ms Ferguson: Thank you.

If I could just comment very briefly, Mr. Szabo, on the reference to the difficulty in understanding whether you can advertise or promote or not, I think the essence of the measures that we are proposing are in the bill itself. Granted, the details will come through in the regulation. We will be consulting with industry and others affected.

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Additionally, as I mentioned in response to Mr. Scott, if the industry would find it helpful, we're more than willing to discuss the possibility of some kind of pre-clearance mechanism in order that they have the certainty that they are keeping within the regs before they're actually out in the public domain.

The Chairman: Harb Dhaliwal.

Mr. Dhaliwal: I'll be very quick, Mr. Chairman.

You don't have to respond to any of these points, but I've flagged them because they're ones that I'll be raising when we do clause-by-clause.

There have been a number of representations urging us to look at some sort of ceiling for sponsorships or a percentage for group sponsorships by tobacco manufacturers. I think the other good idea was a review of the act within a certain timeframe, whether it's two years or three years. This should definitely come back to the committee at some future time in order that we understand that it's really having the effect it intends. If possible, there should be a yearly report as to the progress we're making.

There were also a number of amendments brought forward here today. I wonder if we can get from staff tomorrow some sort of comparison or review of the amendments that were put forward to strengthen the act. Because these are given to us now, it's very difficult to try to make any decision on them, but it's something that we need to look at when we go through clause-by-clause. If we can, we should also get a comparison of the suggested amendments and find out whether the department agrees or disagrees with them. If it does disagree, why does it disagree? We can then make an intelligent judgment on some of these amendments. It's the only thing I ask.

The Chairman: Before you respond, Judy, might I say that insofar as Harb's last point is concerned, we've arranged with the staff to summarize or to compile all the suggestions for change that came before the committee. They will be circulated to you late morning, as soon as we get a translation in both languages.

Do you have anything further before I wrap up, Judy?

Ms Ferguson: I'd just say that we are aware of some of the amendments that have been put forward. We are in the process of assessing these right now.

The Chairman: Folks, before you go, just pay attention to a couple of important things. First of all, tomorrow we meet here at 9 a.m. We hear other witnesses from 9 a.m. until approximately 1:30 p.m., at which time we are to go directly to clause-by-clause not only of C-71 but also of C-24. That's the attribution bill, and this is as a result of an earlier decision by the committee. It's a very brief bill, but we actually made the decision months ago to deal with the two at the same time. So I'll remind you of C-24, which we should be dealing with tomorrow afternoon as well, all with the view to completing the clause-by-clause of both bills tomorrow.

We stand recessed until 9 a.m.

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