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Saturday, April 24, 1999 Published at 05:35 GMT 06:35 UK

Business: The Company File

Tobacco firms face billion dollar law suit

Ontario says any money gained will be spent on healthcare

The Canadian province of Ontario plans to sue the US tobacco industry for as much as $40bn for smoking-related health damages.

Canada's most populous province said it has retained American lawyers and will file a suit in the US.

[ image: The lawsuit is not against Canadian tobacco companies]
The lawsuit is not against Canadian tobacco companies
Ontario is the first Canadian province to file a lawsuit against the US tobacco industry, although British Columbia has filed a lawsuit seeking damages from Canadian cigarette producers. The Canadian cigarette makers have challenged the suit as being unconstitutional.

Health Minister Elizabeth Witmer said in a statement that Ontario was taking a "leadership role" by seeking damages.

Ms Witmer added that any money from a successful action would be spent on health care for smoking-related illnesses.

The suit is modelled on cases filed by US states that alleged an illegal industry conspiracy to target young smokers. Forty six states recently settled with tobacco manufacturers for $206bn and limits on tobacco marketing.

Canada's largest tobacco firms share international parent companies with the US companies.

The statement did not explain why the province was not also filing a lawsuit against Canadian cigarette producers. But a Canadian Tobacco Manufacturing Council spokesman said he thought Ontario decided not to file a suit in Canada because the industry had not broken any Canadian laws.

"Based upon initial estimates, the province could recover as much as $40bn in current US dollars," the Canadian health ministry said.

Ontario, which has population of about 10 million people, estimates that tobacco kills 12,000 of its residents each year and costs its health service $1.1bn Canadian dollars annually.

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