Health Canada report urges big tax hike on cigarettes.

Health Canada in a report says that Ottawa needs to hike tobacco taxes significantly to meet its long-term target of reducing smoking to just five per cent of the Canadian population.

Currently, cigarette taxes are about 68 per cent of the retail price. The report says that must rise to 80 per cent to get smoking levels down to about six per cent by 2036 — close to the five per cent government target by 2035. Levy says the government must take action soon to kick-start the decline.

Health Canada is currently reviewing more than 1,700 submissions made during its consultations on the future of tobacco control, which ran from Feb. 22 to April 13 this year. The goal is to replace the current Federal Tobacco Control Strategy, which expires in March 2018.

Andre Gagnon, spokesperson from Health Canada said in an email, “Taxation is only one of the levers available to government to achieve its policy objectives.The government will evaluate all available tools in determining the best way to reduce smoking rates.”

Cigarette taxes have been the most effective tool for cutting smoking, based on the Canadian experience since 1999.In March, then-health minister Jane Philpott announced the Trudeau government’s commitment to reduce smoking to less than five per cent of the population by 2035, from about 14.2 per cent currently.

Canadian governments have aggressively targeted smokers for the last two decades, with a series of restrictions on advertising and smoking locations, in addition to tax hikes. But “there is concern that the decline in smoking prevalence may have slowed”, says David Levy, of Georgetown University in Washington, D.C.

Levy created  SimSmoke computer mode.The model, created in 1998, has been commissioned to assess the effectiveness of tobacco-control policies in more than 20 countries.

The SimSmoke model incorporates the effect of higher taxes on cigarette smuggling, especially prevalent in Ontario where tobacco is grown and sometimes diverted to the black market, and where organized crime is often linked to First Nations selling contraband. But the model is concerned only with the overall impact of contraband on smoking cessation.

Health Canada paid Levy $60,270 for the SimSmoke research.