Taxation Policies to Reduce Tobacco Consumption in Canada

Abstract

In 1989, approximately one third of Canadians over 15 years of age were cigarette smokers. Studies by the Royal College of Physicians of London and the US Surgeon General have clearly demonstrated the negative impact of smoking on health and have established smoking as a risk factor for cardiovascular disease, cancer and respiratory problems. It has been estimated that at least 38 000 Canadians die each year from smoking-related diseases. There are many approaches to combat tobacco consumption which include education, smoking cessation programs and legislation. Between 1980 and 1990, Canada imposed heavy taxation on tobacco products that resulted in a 35% decrease in tobacco consumption by the adult population and a 62% decrease in consumption by the teenage population. However, in the past two years smuggling has forced federal and provincial governments to reduce these high taxes on tobacco products. It has been estimated that the recent tax cuts will increase the number of smokers by approximately 800 000. Therefore, a new taxation policy should be introduced which differs from the previous tax in some key aspects. Any new tax increase should be moderate to help avoid the problem of tobacco smuggling and a portion of the tax should directed to fund smoking cessation programs.