Ottawa's plain packaging cigarette proposal: Illogical, illiberal and illegal

There have been many over-the-top actions by governments in their wars on tobacco, but few have been as illogical, illiberal and illegal as the proposal by Ottawa to enforce uniform plain packaging on cigarette packs accompanied by grotesque pictures of diseased organs. It doesn't work, breaches fundamental liberal principles of free expression and infringes trademark protections. Worst of all, it will cost us money that the government will eventually take out of our pockets.

To begin with, tobacco is a legal product and smoking is a legal activity. For those who are concerned that smoking puts a strain on our health care costs here are the real numbers. According to government figures just for Quebec, smoking related illnesses costs the health system some $100 million annually. But taxes from tobacco purchases bring in almost $800 million annually. Those taxes are used for our health system and even to fund our pensions. 

A centrepiece of the current federal administration's election promises was that rule and regulation would be "evidence-based." Let us examine the evidence Ottawa is using on this proposal, putting aside the arguments that it is not the proper role of the state to engage in social engineering by dictating personal behaviour to adults nor by limiting free expression in marketing and branding because these are patently illiberal policies.

The push for this initiative is driven by a prohibitionist mentality that thinks it can get the percentage of people who smoke to zero. Well, prohibition of liquor didn't stop people from drinking in the 1920s and 1930s and it certainly won't work on cigarettes. What prohibition did do was create a massive underground economy that helped establish and fund the organized underworld as we know it today. The expansion of that underground economy seems to be one of the outcomes in the only nation in the world that has adopted plain packaging. That country is Australia.

It was from Australia that Ottawa adopted this ill-conceived idea. But the illogic of the Australian experiment is now becoming clearer by the day. Australia unveiled its plain-packaging policy in 2011. It came into force in December 2012. Three years later, there is no evidence that it accomplished anything. The most recent national survey of smoking rates published by the Australian Institute of Health and Welfare actually suggests that youth smoking (12-17) may have increased over the period since plain packaging was introduced. 

But what has also increased is a black market in tobacco that Australian customs and police are struggling to control because they admit it has reached a record level. Last October, Australia’s border protection minister, Peter Dutton, announced the formation of a Border Force strike team to target “serious organized crime syndicates” smuggling tobacco into Australia in the wake of a record seizure equivalent to AUS$90 million. Here in Canada we are already witnessing a massive rise in contraband cigarette smuggling that many in industry and law enforcement feel is due to excessive regulations and the market demand for cigarette packs without even health warnings and grotesque pictures that are readily available at duty-free outlets.

Despite all the publicity surrounding the introduction of the new packs, another national survey found the percentage of Australians citing health warnings as a reason for smoking less or quitting, fell from 15.2 per cent in 2010 to 11.1 in 2013. Separate data collected across four of Australia’s six states suggests smoking rates actually increased for all age groups between 2012¬–13. 

“The Australian government finds itself in an embarrassing situation having trumpeted its policy only to find that despite all the rhetoric, tobacco prevalence didn’t fall,” says Sinclair Davidson, an economist at Melbourne’s RMIT University. Davidson was the co-author of a broad peer-reviewed study that concluded, “There is no empirical evidence to support the notion that the plain packaging policy has resulted in lower household expenditure on tobacco. " Perhaps adults want to be treated as adults and are finally doing the exact opposite of the the nanny-staters want them to?

Australian Bureau of Statistics data actually demonstrates that household expenditures on tobacco rose in the first year after the introduction of plain packaging. Tax revenues also rose from tobacco after the introduction of plain packaging. In fact, the Australian government had initially claimed a 3.4% drop in tobacco tax revenues after plain oackaging but had to reverse itself when the final numbers came in. 

Australia also faces World Trade Organization sanctions on plain packaging over claims that plain packaging infringes on intellectual property rights by effectively confiscating brands and their value. One complainant, Indonesia, has threatened to retaliate by mandating plain packaging for imports of Australian wine. And in Australia itself, the proponents of plain packaging in tobacco are now agitating for the same on liquor, sodas and fast foods.

We do not know if Ottawa has really examined the Australian evidence in depth. One would think if it had, it would be clear how illogical and illiberal the proposal is. However, we do know that Ottawa has examined the legality of this proposal. To beat back the legal challenge on freedom of expression, the government Is planning to rely on a 2007 decision of the Supreme Court. That decision revolved around the argument that The Charter of Rights and Freedoms - specifically Section 2 which guarantees expression as a fundamental freedom - was being violated by federal provisions requiring health warnings to occupy at least 50 per cent of packages.

In its ruling, the Supreme Court found that the regulations did amount to violations of the guarantee to free expression of tobacco manufacturers, but were justified under the reasonable limits clause of the charter. That clause pertains to limits on freedoms in cases of national emergency or pressing need to inform the public. But the decision also made the point that the tobacco manufacturers did retain half the package for their information. If Ottawa goes ahead with plain packaging, it will be in clear violation of Charter rights by the Supreme Court's own delicate standard. This is not a national emergency. And all space on the package is taken away. There is no balance of expression as was argued in the 2007 decision.

This is just a bad idea that hasn't worked in the only country that has legislated it. It is time for politicians to stop their zero-risk, zero-tolerance mentality. They should have the integrity to state the obvious. The freedom to choose, even badly, is the essence of a free society. This proposal should just be dropped in the dustbin and forgotten