British Columbia v Imperial Tobacco Canada Ltd.

The Province of British Columbia (BC) passed the Tobacco Damages and Health Care Costs Recovery Act (the “Act”) to allow the government to sue tobacco manufacturers for the costs of providing health care to individuals exposed to tobacco products. Under the Act a given manufacturer could be held liable for a proportion of provincial health care costs equivalent to their share of the cigarette market in the province.

At first instance, the government’s suit against the tobacco manufacturers was dismissed on the grounds that the Act was unconstitutional and not within provincial jurisdiction. The BC Court of Appeal (BCCA) found that the Act was within provincial jurisdiction as set out in s 92(13) of the Constitution Act, 1867. The BCCA also found that the Act did not offend judicial independence or the rule of law.

The central issue before the Supreme Court of Canada was the constitutional validity of the legislation; particularly, whether it was 1) ultra vires the provincial government,2) interfered with judicial independence and 3) offended the rule of law.

The Court held that the Act was constitutionally valid.

The Court found that the Act was within provincial jurisdiction, as it created a civil cause of action, which falls within provincial competency under s. 92(13). The Court found that strong relationships existed between the Province of BC, compensation for the province’s tobacco-related healthcare costs, and tobacco manufacturers. The Court also found that the Act respected the legislative sovereignty of other jurisdictions, with any breaches having little or no bearing on the strength of the relationship between the civil action and BC.

The Court found that the Act did not violate the independence of the judiciary because it did not interfere with the court’s role in adjudicating the action and did not interfere with the court’s relationship to other branches of government.

The Court held that the appellant’s rule of law arguments failed. The appellants argued that the rule of law requires that legislation be prospective, general in character, not confer any special privileges on the government, and ensure a fair trial. The Court found that the requirements enunciated by the appellants are broader in scope than those protected by the Constitution.

“Where the government’s claim is made on an aggregate basis, it may use statistical, epidemiological and sociological evidence to prove its case […] It need not identify, prove the cause of disease or prove the expenditures made in respect of any individual member of the population on which it bases its claim” (para 9)

“Though the cause of action that is its pith and substance may capture, to some extent, activities occurring outside of British Columbia, no territory could possibly assert a stronger relationship to that cause of action than British Columbia. That is because there is at all times one critical connection to British Columbia exclusively: the recovery permitted by the action is in relation to expenditures by the government of British Columbia for the health care of British Columbians.” (para 38)

“[T]obacco manufacturers sued pursuant to the Act will receive a fair civil trial, in the sense that the concept is traditionally understood: they are entitled to a public hearing, before an independent and impartial court, in which they may contest the claims of the plaintiff and adduce evidence in their defence. The court will determine their liability only following that hearing, based solely on its understanding of the law as applied to its findings of fact. The fact that defendants might regard that law (i.e., the Act) as unjust, or the procedural rules it prescribes as unprecedented, does not render their trial unfair.” (para 76)