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Eye on the tobacco industry

An update on current Canadian tobacco industry activities


April-June 2009

Gideon Forman of The Canadian Association of


Imperial Tobacco Canada attempts to
Physicians for the Environment found the move
‘greenwash’ its packaging
laughable:
Attempts by Imperial Tobacco Canada to Is it green washing? Yes. Are they
advertise its new “environmentally friendly” making a product that is still toxic to
cigarette packaging were met with ridicule in people’s health? Yes. So they are
May. The company was lambasted in the now making a product with a little bit
Toronto Star, in an article written by the more paper. Big deal.1
newspaper’s environment reporter, after ads for
its du Maurier cigarettes appeared in numerous A comprehensive definition of “greenwashing”
publications across Canada. is provided by the SourceWatch Encyclopedia:
Greenwashing is the unjustified
The ad, published in Toronto Life and People appropriation of environmental virtue
magazines, free entertainment weeklies and in by a company… to create a pro-
bar bathrooms, say “We have updated our environmental image, sell a product
packaging to reduce its impact on the or a policy, or to try and rehabilitate
their standing with the public and
environment.” The ad says that Imperial has
decision makers after being
replaced foil wrapping with paper and that its embroiled in controversy.2
cardboard packaging now “meets standards
supporting sustainable forest management.” But
commentators in the Star were not buying it.

A new ad for du Maurier


cigarettes highlights Imperial
Tobacco Canada’s attempts
to “greenwash” its new
packaging. The size of some
of the text in the ad has been
enlarged and superimposed
on a photo of the original ad.
Eye on the tobacco industry April-June 2009

Imperial’s greenwashing may be related to a detailed the company’s efforts to reduce the
growing chorus of voices which are demanding greenhouse gas emissions associated with its
action on cigarette butt litter.3 A recent operations.8
newsletter by the David Suzuki Foundation, a
well-known science-based Canadian Most people aren’t fooled, however, and are
environmental organization, noted that: seeing through the green sheen. The headline in
From start to finish, cigarettes are bad the Star article says it all: “Smokes: First you’ll
for the environment. Tobacco feel green, and then you’ll die.”
production uses land that could
support food crops or forests, and Cigarette butt litter is just one more example of
pesticides used on tobacco farms the externalities tobacco manufacturers impose
harm workers and pollute the soil and on society and governments. The billions of
water. An incredible amount of fuel is dollars in health care costs associated with
needed to dry tobacco…. At least 4.5 treating people suffering and dying from
trillion non-biodegradable filter tobacco-caused diseases is another obvious
cigarette butts are discarded around example.
the world every year.4

By trying to portray itself as an Tobacco companies fear monger after


environmentally responsible corporate citizen, federal government announces plan to
Imperial may be attempting to get “out front” ban flavoured cigarillos
on the issue, before the chorus of voices
demanding action on tobacco-product-related Proposed legislation introduced in the House of
litter becomes a roar which governments can no Commons in May by Minister of Health Leona
longer ignore. Aglukkaq, which would ban flavourings in
cigarillos, had Canada’s largest importer of the
Municipal governments in several North products fear mongering.
American jurisdictions have begun to address
the issue. City officials in Ville Marie, a
downtown borough of Montreal, have begun
enforcing a two-year-old public cleanliness Minister of
bylaw there and are issuing $169 tickets to Health Leona
smokers who discard their cigarette butts on Aglukkaq
streets and sidewalks.5 Mayors of both moved to ban
Edmonton and San Francisco have recently said fruit and
it would be worthwhile to levy a tax on tobacco candy
products to help offset the clean-up costs flavourings in
related to cigarette butts.6 7 cigarillos.

Attempts to give themselves a green sheen are


not uncommon among tobacco companies. The
industry has surely noticed an upswing in
concern for the environment by citizens in In an April press release, Montreal-based Casa
Canada and around the world, largely due to Cubana claimed Bill C-32, Cracking Down on
scientific findings related to climate change. Tobacco Marketing Aimed at Youth Act, will
For example, annual reports to shareholders by “hurt Canadians and the economy.”9 Company
Japan Tobacco (and other multi-nationals) have spokesperson Luc Martial said the Bill would

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Eye on the tobacco industry April-June 2009

lead to job losses and flavoured cigarillos Bill C-32 could ‘seriously curtail’ production in
showing up on the contraband tobacco market, Quebec City, Rothmans, Benson & Hedges says
where violent criminal networks would stand to
gain. Indeed, products regularly imported by In June, Philip Morris International’s (PMI)
Casa Cubana have recently shown up in RCMP Canadian subsidiary said Bill C-32 could
seizures of smuggled, contraband cigarillos.10 11 seriously curtail production, resulting in job
losses at its Quebec City factory, which
Martial said employs 300 people.14
Minister Aglukkaq
held a press Unionized employees of the Rothmans, Benson
conference related & Hedges (RBH) factory protested both the
to the bill, where Canadian government’s inclusion of a ban on
she was basking in flavourings used in burley tobacco and the
the glow “of well- Quebec government’s silence on the issue.15 16
respected health
agencies and
fearless paid-to-hate
anti-tobacco
groups.” He said the
government has
Luc Martial provided no
evidence to support
its claims that candy and fruit flavoured
cigarillos are appealing to and widely used by
young people.

In a June press release, Martial and Casa


Cubana asked the federal government for a
bail-out:
This bail-out sought, however is not Members of the Baker, Confectioners, Tobacco
one which will cost Canadians, but Workers and Grain Millers Union protest Bill
rather benefit them – by asking C-32 in Ottawa June 19th.
government not for money, but rather
honesty, integrity and
RBH imports burley tobacco from various
accountability.12
countries, including the United States, to
manufacture “American-blend” cigarettes such
Appearing before the Standing Committee on
as Rooftop (Marlboro), Carreras, Gitanes and
Health (HESA) on June 11, following Second
Gauloises brands. The company said in a
Reading of the bill, Martial claimed he was a
statement that flavourings added to burley
“tobacco control advocate,” despite having
“have nothing to do with enticing minors to
worked for Casa Cubana for the “last six or
smoke.”17
seven years.”13 Most, if not all, of Martial’s
policy proposals on the tobacco file, if
RBH said the products in question form a small
implemented, would benefit tobacco
but important part of its Canadian market, but it
manufacturers, and would therefore inversely
offered no proof of its claim that the flavouring
harm public health.
ban would cause job losses.

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Eye on the tobacco industry April-June 2009

Menthol cigarettes and flavoured smokeless 31, 2009.21 Japan Tobacco International, which
tobacco will continue to be allowed owns Canada’s JTI-Macdonald and is itself
owned by JT, experienced growth in its global
Efforts by public health groups to have flagship brands, such as Winston, Camel and
legislators amend the Bill to ban flavours in Mild Seven.
smokeless tobacco failed. This occurred less
than two months after Philip Morris JT’s Earnings Before Interest, Taxes,
International told its shareholders that new Depreciation and Amortization (EBITDA) grew
products, such as menthol cigarettes and 7.3% to 646.2 billion yen (CAD $6.7 billion).
smokeless tobacco, sold under key brands such
as Marlboro, will be important in achieving
future success overseas.18 Convenience store owners continue to
align themselves with Big Tobacco
In Canada, the most popular smokeless tobacco
products are Skoal and Copenhagen, sold by the For at least the second time in eight months, the
National Smokeless Tobacco Company, which Vice-President of the Canadian Convenience
is owned by Altria (parent company of Philip Stores Association (CCSA) publicly urged
Morris USA). Health Canada officials governments to cut tobacco taxes to help fight
appearing as witnesses before the Standing the contraband cigarette market.
Committee on Health indicated that they lack
sufficient data on flavoured smokeless tobacco In a press conference held outside the
usage rates among young people in Canada to Legislative Assembly in Quebec City, Michel
justify a ban under legislation aimed at Gadbois urged the Quebec and federal
“cracking down on marketing aimed at youth.” governments to cut tobacco taxes by half.22
As for menthol cigarettes, Health Canada
officials said the market is very small (about
2%), and unit sales declined by 26% between
2001 and 200719:
The research we have done indicates
that menthol use is actually declining.
It is not something that youth view as
attractive. When presented with it,
they actually refuse it and prefer Convenience store owners are no doubt feeling
something else. We do not feel that it the impact of lost revenue due to growing
is a product that needs to be acted contraband cigarette sales in Canada. A study
upon, and therefore we are not produced for the CCSA found that tobacco
proposing action. In fact, it goes products were the largest contributor to
counter to some of the evidence we profitability for convenience stores in 2007,
have.20 accounting for 23% of profits.23 They clearly
have a vested interest in ensuring tobacco sales
Japan Tobacco posts record net sales return to the legal market.
for 2008-09 fiscal year
Tobacco taxation is one of the most important
Japan Tobacco (JT), the third health strategies used to lower consumption. A
largest tobacco company in the tax rollback would lead to more youth smoking,
world, grew its net sales 6.6% in to higher consumption among current smokers,
the fiscal year that ended March and to reduced quitting. By calling for a

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Eye on the tobacco industry April-June 2009

rollback, Gadbois is doing the tobacco Really what they’re trying to get at is
companies’ dirty work. It is something he is it’s the kid’s fault for smoking — it’s
used to, having previously worked as a public not their [the retailer’s] fault for
relations representative for both Benson & selling cigarettes.27
Hedges (now Rothmans, Benson & Hedges)
and Imasco (parent company of Imperial The CCSA continues to work with the National
Tobacco at the time).24 Coalition Against Contraband Tobacco, which
Big Tobacco is active in and helps fund. CCSA
In June, the CCSA released a poll (conducted produced a new brochure about the contraband
by Léger Marketing), which Gadbois claims problem, which it distributed to federal and
shows that cheaper cigarettes (achieved, for provincial politicians and members of the
example, by lowering tobacco taxes) will not media across the country.28 The Coalition
lead to an increase in consumption.25 The updated its website to allow interested
survey results fly in the face of numerous stakeholders to engage in advocacy, providing
econometric studies conducted by contact information to enable easy
internationally renowned organizations, such as communication with politicians.29
the World Bank, that have proven the opposite
to be true. Imperial Tobacco Canada Foundation
donates to Canadian arts organizations
On May 28th, the CCSA
proposed another reform A Foundation funded by Imperial Tobacco
that is not widely Canada (ITC) awarded $575,000 in total to 11
supported by the tobacco different arts organizations across the country
control community: in May.30
banning youth from using
and possessing tobacco
products.26 The CCSA
President, Dave Bryans,
used to work for Big
Tobacco; he was formerly
Dave Bryans Ten awards worth $50,000 each were presented
employed by RJR-
to help commission new works in the
Macdonald Inc. (now JTI-Macdonald). Bryan’s
performing and visual arts. An award, worth
work with the CCSA still serves the tobacco
$75,000, was given to a contemporary
company’s interests.
photography exhibit in Montreal.
While Nova Scotia and Alberta have legislated
The Foundation launched the “New Creation in
a ban on youth possession of tobacco, the other
the Arts” and the “Arts Achievement Award” in
provinces/territories and the federal government
November 2008, after announcing that it was
have put the onus on retailers to ensure that
reducing its overall funding to the arts by 60%,
tobacco is not sold to youth under age 18 or 19,
as well as further reducing its funding for post-
depending on the province. Cynthia Callard, of
secondary institutions, teaching hospitals and
Physicians for a Smoke-Free Canada, told
research into care for the aged.
Canwest News Service that youth possession
laws have been ineffective and that in calling
The remaining funding, which has been
for such laws, convenience store owners are
redirected from a myriad of small grants to a
simply trying to deflect responsibility:
few large ones, may be designed to garner more

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Eye on the tobacco industry April-June 2009

media attention for ITC, since large donations Company President and CEO Benjamin
are likely to be more newsworthy than dozens Kemball also gave two speeches in front of
of small ones. ITC has long provided funding to high-profile audiences in June. On June 1st ,
the arts, in part to be seen as a good corporate Kemball spoke at a lunch time gathering of the
citizen. Since 2005, the Foundation has Canadian Club of Montreal.31 On June 18th, he
distributed almost $10 million in funding to arts addressed the Economic Club of Canada.32
organizations across the country.
Both speeches were similar, focusing on the
subject of contraband cigarettes and the fact
Imperial Tobacco Canada pressures
that Canada used to be a world leader in
government to act on contraband
tobacco control. Kemball argued that the
country’s failure to deal effectively with the
Imperial Tobacco Canada (ITC) continues to
contraband crisis has tarnished its tobacco
lobby the Government of Canada to take action
control credentials. He said 50% of all
on contraband tobacco. In June the company
cigarettes smoked in Ontario, Canada’s most
ran full-page ads in The Hill Times, a weekly
populous province, are illegal.
newspaper read widely by politicians and staff
on Parliament Hill. The ads (see below) are In fact, the illegal tobacco market in
intended to remind federal policy-makers that Ontario has reached a higher level
while political people take their vacations, the than Nigeria, Brazil, Paraguay,
criminals who sell contraband cigarettes will Zimbabwe, Pakistan, Colombia and
Venezuela.33
not be on holiday.

These full page ads by Imperial Tobacco Canada appeared on pages 3 and 5 of the June 8, 2009 edition of
The Hill Times newspaper published in Ottawa.

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Eye on the tobacco industry October-December 2008

Quebec is close behind, Kemball said, with Imperial names new president and CEO
40% of tobacco sales in the province illegal.
ITC named a new president and CEO in May.34
The federal and Effective August 2009, Ian Muir will replace
provincial governments Benjamin Kemball.
in Canada lost $2.4
billion in taxes in 2008, Muir has worked for almost 25 years in the
a number that is tobacco industry. According to an ITC press
growing, according to release, Muir was most recently “responsible
Kemball. for British American Tobacco’s Western
Europe Area which includes Belgium,
Convenience store Netherlands, Luxembourg, Spain, Portugal,
owners are also France, UK and Ireland.”
suffering, losing $260
million a year across British American Tobacco is the world’s
Benjamin Kemball Canada in profit and second largest publicly-traded tobacco
$600 million in company and the parent of ITC.
estimated additional sales that would be made if
customers were coming in to buy cigarettes. Imperial suggests health care cost
recovery litigation is a waste of time
For much of the speeches, Kemball lambasted
federal and provincial governments for failing Legislation in Quebec
to act to stop contraband. He also proposed a and Ontario, designed
number of solutions that governments could to help recover
enact. Among them are: billions of dollars
• Controlling the supply of raw from tobacco
materials destined for illegal companies paid out by
manufacturing facilities the provinces in health
• Implementing revenue sharing care costs to treat
agreements with First Nations tobacco caused
equivalent to the Provincial Tobacco illnesses, has Imperial
Tax Tobacco Canada
• Appointing a senior government worried.
official to be in charge of the Donald McCarty
contraband file, with the authority to In May and June,
coordinate efforts across government Donald McCarty, ITC’s Vice-President of Law,
ministries and agencies testified before committees studying Bills 155
and 43 in Ontario and Quebec, respectively.35 36
Kemball emphasized that public health groups He opposed the legislation, arguing that it
have been calling for similar solutions and that deflects attention from the real tobacco control
“it is not everyday that you get tobacco problem—contraband—and that similar
companies and health groups asking for the lawsuits in the United States ended in verdicts
same thing.” When that happens, Kemball said, for the industry. His arguments were trashed by
government should listen. Quebec politicians who appear determined to
pass Bill 43 in short order.37 In Ontario, Bill
155 became law on May 14th.

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Eye on the tobacco industry October-December 2008

References

1
Welsh M. “Smokes: First you’ll feel green, and then you’ll die.” The Toronto Star. 13 May 2009.
www.thestar.com/article/633388. Accessed May 2009.
2
SourceWatch encyclopedia. A project of the Centre for Media and Democracy. www.sourcewatch.org/index.php?title=Greenwashing.
Accessed May 2009.
3
Novotny T E, Feng Z. “Consumption and production waste: another externality of tobacco use.” Tobacco Control.
1999;8. pp. 75-80. http://tobaccocontrol.bmj.com/cgi/content/abstract/8/1/75. Accessed May 2009.
4
David Suzuki Foundation. “Smoking is bad for you and the planet.” Finding Solutions. Spring 2009. p. 10.
www.davidsuzuki.org/files/Finding_Solutions/FS_Spring09_web.pdf. Accessed May 2009.
5
The Gazette. “Watch your butt! – and avoid ticket.” 22 May 2009.
www.montrealgazette.com/Health/Watch+your+butt+avoid+ticket/1617906/story.html. Accessed May 2009.
6
McKinley J. “Cost of Cigarette Litter May Fall on San Francisco’s Smokers.” The New York Times. 18 May 2009.
www.nytimes.com/2009/05/19/us/19smoke.html. Accessed May 2009.
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Kent G. “Boost taxes on smokes to curb litter: Mandel.” The Edmonton Journal. 4 November 2008.
www2.canada.com/edmontonjournal/news/cityplus/story.html?id=33e395ae-4d27-48a6-9236-9ebcda887ba7. Accessed
May 2009.
8
Japan Tobacco Inc. “Our Approach to Protecting the Global Environment.” Annual Report 2008. pp. 44-45.
www.jt.com/investors/library/annual_report/pdf/annual2008_E_all.pdf. Accessed May 2009.
9
Casa Cubana. “Proposed Legislation to Ban Flavours in Tobacco will Hurt Canadians and the Economy.” Press release.
26 May 2009. http://www.cnw.ca/en/releases/archive/May2009/26/c7773.html. Accessed June 2009.
10
Royal Canadian Mounted Police. “Suspicious Vehicle Stop Leads to Seizure of Contraband Cigars.” Press release. 13
February 2009. www.rcmp-grc.gc.ca/on/news-nouvelles/2009/09-02-13-cornwall2-eng.htm. Accessed June 2009.
11
Royal Canadian Mounted Police. “Akwesasne Mohawk Police Service Stop Three Vehicles which leads to the seizure of
360,000 Cigarettes, 36,000 Mini Cigars and 33 Litres of Vodka by the Central St. Lawrence Valley RCMP
Detachment.” Press release. 18 March 2008. www.rcmp-grc.gc.ca/qc/nouv-news/com-rel/2008/080331b-eng.htm.
Accessed June 2009.
12
Casa Cubana. “Tobacco Company Seeks Federal Government Bail-Out.” Press release. 3 June 2009.
www.cnw.ca/en/releases/archive/June2009/03/c2800.html. Accessed June 2009.
13
Martial L. Evidence from Standing Committee on Health meeting. 11 June 2009.
www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3985187&Language=E&Mode=1&Parl=40&Ses=2.
Accessed June 2009.
14
Schreiner B. “Tobacco advocates fuming over Canadian legislation.” The Associated Press. 19 June 2009.
http://news.yahoo.com/s/ap/20090619/ap_on_re_us/us_canada_tobacco. Accessed June 2009.
15
Baker, Confectioners, Tobacco Workers and Grain Millers. “Charest Government silent as Harper’s feds eliminate
Quebec jobs.” Press release. 18 June 2009. www.newswire.ca/en/releases/archive/June2009/18/c8172.html. Accessed
June 2009.
16
Baker, Confectioners, Tobacco Workers and Grain Millers. “Harper Government eliminates hundreds of Quebec and
Ontario jobs.” Press release. 18 June 2009 www.newswire.ca/en/releases/archive/June2009/19/c8354.html. Accessed
June 2009.
17
Schreiner B. “Tobacco advocates fuming over Canadian legislation.” The Associated Press. 19 June 2009.
http://news.yahoo.com/s/ap/20090619/ap_on_re_us/us_canada_tobacco. Accessed June 2009.
18
Camilleri L C. “Remarks by Louis C. Camilleri.” Annual Meeting of Stockholders. Philip Morris International Inc. 5
May 2009.
http://investors.philipmorrisinternational.com/External.File?item=UGFyZW50SUQ9NDQ5NXxDaGlsZElEPS0xfFR5c
GU9Mw==&t=1. Accessed June 2009.
19
Sabiston C. Evidence from Standing Committee on Health meeting. 9 June 2009.
www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3972962&Language=E&Mode=1&Parl=40&Ses=2.
Accessed June 2009.

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Eye on the tobacco industry October-December 2008

20
Glover P. Evidence from Standing Committee on Health meeting. 9 June 2009.
www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3972962&Language=E&Mode=1&Parl=40&Ses=2.
Accessed June 2009.
21
Japan Tobacco. “JT Posts Record Net Sales and EBITDA for the Fiscal Year that Ended March 2009.” Press release. 30
April 2009. http://www.jt.com/investors/media/press_releases/2009/pdf/20090430_01.pdf. Accessed June 2009.
22
La Presse canadienne. “Les dépanneurs exigent une baisse des taxes sur le tabac.” 2 June 2009. Le Devoir.
www.ledevoir.com/2009/06/02/253096.html. Accessed June 2009.
23
Dickson J. “A new beginning: Inaugural CCSA industry report breaks ground.” YCM (Your Convenience Manager
magazine). May-June 2009.
http://conveniencecentral.ca/200906/asso_anewbeginning.asp?sid=175950F6D67B4D9EB9B583CB6E308DE2.
Accessed June 2009.
24
Noël A. “La Route du tabac : Quand les médias se font complices.” Le 30: le magazine du journalisme québécois. Vol.
18, No. 4. April 1994.
25
Friday T. “Anti-tobacco group slams report.” The Gazette. 28 June 2009.
www.montrealgazette.com/Health/Anti+tobacco+group+slams+report/1737906/story.html. Accessed June 2009.
26
Canadian Convenience Stores Association. “Hey Ottawa: Want to really protect youth from the dangers of tobacco? Ban
them from smoking.” Press release. 28 May 2009. www.newswire.ca/en/releases/archive/May2009/28/c8436.html.
Accessed June 2009.
27
Fitzpatrick M. “New federal marketing bill ineffective: convenience stores.” The National Post. 30 May 2009.
www.nationalpost.com/story.html?id=1647318. Accessed June 2009.
28
Canadian Convenience Stores Association. “Contraband tobacco in Canada: Time for Action.” 2009.
www.conveniencestores.ca/images/stories/PDF/gle-brochure%20en%20acda.pdf. Accessed June 2009.
29
National Coalition Against Contraband Tobacco. “National Coalition Member Update – June 2009.” June 2009.
www.conveniencestores.ca/images/stories/PDF/contrabandjune09.pdf. Accessed June 2009.
30
Imperial Tobacco Canada Foundation. “And the winners are… the Imperial Tobacco Canada Foundation supports
eleven leading Canadian arts organizations.” Press release. 12 May 2009.
www.cnw.ca/en/releases/archive/May2009/12/c3052.html. Accessed June 2009.
31
Kemball B. “Tobacco in Canada: An Inconvenient Truth.” Imperial Tobacco Canada. 1 June 2009.
http://imperialtobaccocanada.com/onewebca/sites/IMP_5TUJVZ.nsf/vwPagesWebLive/DO5V2P4L/$FILE/medMD7S
MNYP.pdf?openelement. Accessed June 2009.
32
Kemball B. “Tobacco in Canada: An Inconvenient Truth.” Imperial Tobacco Canada. 18 June 2009.
http://imperialtobaccocanada.com/onewebca/sites/IMP_5TUJVZ.nsf/vwPagesWebLive/DO5V2P4L/$FILE/medMD7TC
HQ4.pdf?openelement. Accessed June 2009.
33
Ibid.
34
Imperial Tobacco Canada. “Imperial Tobacco Canada names new President and CEO.” Press release. 21 May 2009.
www.cnw.ca/en/releases/archive/May2009/21/c6106.html. Accessed June 2009.
35
Imperial Tobacco Canada. “Tobacco legislation deflects focus on true problem.” Press release. 7 May 2009.
www.newswire.ca/en/releases/archive/May2009/07/c9622.html. Accessed June 2009.
36
Imperial Tobacco Canada. “The Government of Quebec should revisit its priorities to focus on the crisis of illegal
tobacco sales.” Press release. 9 June 2009. www.cnw.ca/en/releases/archive/June2009/09/c4781.html. Accessed June
2009.
37
Dougherty K. “Quebec politicians team up to grill tobacco exec.” The Gazette. 9 June 2009.
www.montrealgazette.com/opinion/Quebec+politicians+team+grill+tobacco+exec/1679265/story.html. Accessed June
2009.

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