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Parliament passes plain tobacco packaging law, regulates vaping

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The Liberal government has passed a sweeping overhaul of the country's tobacco laws — legislation that will formally legalize (and heavily regulate) vaping and give Health Canada the powers it needs to mandate plain packaging for cigarettes.

The bill, S-5, is one of the most ambitious overhauls of the Tobacco Act in a generation. It enacts changes that have prompted vocal opposition from the country's largest tobacco companies — and their allies, like convenience store owners — who are steadfastly opposed to measures that will force them to remove their brands from cigarette and other tobacco packages.

The bill doesn't dictate exactly how plain packaging should be imposed, but a Health Canada backgrounder says the new Tobacco and Vaping Products Act will "provide … a range of options such as standardized colour, font and finish, and prohibitions on promotional information and brand elements, such as logos."

A spokesperson for Health Canada did not say exactly when the new regulations would land, but added such regulations typically come into force 180 days after they are finalized by the department.

The bill's defenders have said these new regulations will make smoking less appealing by all but eliminating the uniqueness of particular brands, and help end an "epidemic" of tobacco-related deaths — which the government suggests number over 45,000 per year.

Under existing regulations, branding is already quite limited because health warnings cover roughly three quarters of a traditional cigarette pack.


What the bill does:

  • Gives Health Canada the power to implement plain and standardized tobacco packaging.
  • Applies many of the existing tobacco regulations to vaping products.
  • Prohibits the sale of vaping products to minors.
  • Restricts "lifestyle" advertising for vaping products, the use of testimonials, or any reference to e-cigarettes as healthier than standard tobacco products.
  • Bans certain flavours — like "confectionery" and cannabis — for vaping products.

Critics argue the new rules will simply bolster an already flourishing market for cheaper contraband cigarettes, and often cite the mixed (and contested) results of Australia's move to enact plain packaging.

"The real reason that people start smoking is not because of the pack. There is no evidence of that in every piece of research that Health Canada has cited," Eric Gagnon, the director of government relations at Imperial Tobacco Canada, said in an interview with CBC News.

"The people who start smoking do not see a package today and say, 'Well, this package has red on it. I think I'm going to start smoking.' That's not the way it works … It's more of a PR initiative than anything else."

The packages on the left are what cigarette packs used to look like in Australia before a plain packaging law was passed. The new plain packages are shown on the right. Canadian lawmakers hope to emulate, at least in part, the cigarette packaging strategy pursued by Australia. (David Hammond/University of Waterloo)

But Rob Cunningham, a policy analyst at the Canadian Cancer Society, said he thinks the tobacco industry is upset by plain packaging for a good reason.

"Of course plain packaging would be effective. Why else would the tobacco industry be so opposed?" he said.

"The package is the most important type of tobacco advertising that remains in Canada today. Tobacco is addictive and lethal, and should not be sold in packages made to be more attractive, period."

Gagnon said Imperial Tobacco, which produces popular brands like du Maurier, Pall Mall, Peter Jackson and Player's, is considering legal action to protect its intellectual property rights if Health Canada proceeds with "extreme" regulations.

"It's too early to say because we haven't seen the regulations, but it is one of the avenues we'll have to look into if we believe the government is going too far," he said. "It's not off the table."

Plain packaging rules are already in place, with some variations, in Australia, France, the United Kingdom and Ireland. A legal challenge by tobacco firms in the U.K. was rebuffed by that country's highest court.

A sample of plain packages used in the United Kingdom. (Action on Smoking and Health UK)

'Less harmful source of nicotine'

The Liberal government has pitched the other major component of the bill — new regulations for vaping devices — as a tool to move adult smokers away from traditional cigarettes, while giving them access to the nicotine they crave.

"Bill S-5 will also provide adults the legal access to better-regulated vaping products. These products can serve as a less harmful alternative to cigarettes and can be a much-needed option for those who have been unable to quit smoking," Peter Harder, the government's representative in Senate, said in a recent speech on the bill.

Independent Quebec Sen. Chantal Petitclerc, the bill's sponsor in the upper house, called regulated vaping "an important tool" for ensuring "a less harmful source of nicotine" as the government looks to cut the percentage of the population that smokes from the current 15 per cent to less than 5 per cent by 2035.

The vaping industry has been operating largely beyond the reach of regulators since e-cigarettes emerged as an alternative to smoking some ten years ago.

The e-cigarette — a battery-powered device that looks like a traditional cigarette — delivers inhaled doses of nicotine-containing vapour. Until now, vaping products have been sold under a lighter regulatory burden than the one imposed on cigarettes.

The bill, which is expected to receive royal assent shortly, demands compliance with the new vaping regulations within 180 days.

The proposed legislation would regulate e-cigarettes while allowing adults to access vaping products that are likely less harmful alternatives to tobacco use, Health Canada says. (Frank Franklin II/Associated Press)

Those regulations include a move to cut the number of flavours that can be used in an e-cigarette, banning any flavour designed to mimic "confectionery," cannabis, soft drinks or energy drinks — flavours some parliamentarians believe are designed to hook young people on these devices.

The bill also prohibits the sale of vaping products to minors, or sending a vaping product to a minor.

The bill restricts most promotional activity around vaping products, forbidding the use of testimonials and references to health effects and additives.

Anti-smoking advocates maintain these regulations are necessary because any reference to an e-cigarette as safer than the traditional variety could be misleading. While vaping devices are often sold as smoking cessation aides, critics maintain they're not entirely harm-free.

However, a recent review by tobacco experts at Public Health England found that e-cigarettes are considerably less harmful than traditional cigarettes.

"Anyone who has struggled to quit should try switching to an e-cigarette and get professional help," the government agency recommended in its February 2018 report.

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OPEC threatens to turn on the spigots as oil price briefly hits highest point since 2014

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The price of the North American oil benchmark briefly touched $72 US a barrel late Tuesday despite the OPEC oil cartel publicly mulling boosting supply as soon as next month.

The price of West Texas Intermediate, the North American oil benchmark commonly known as WTI, was changing hands as high as $72.83 at one point on Tuesday. Although it slumped slightly lower on Wednesday, that was the highest level since November 2014.

Supply concerns in Venezuela and Iran have been overhanging the market for months, driving prices higher. 

Then late Tuesday the oil-producing cartel known as OPEC suggested it may soon turn on the spigots a little, after curbing its supply for the better part of the past year to boost prices.

The notoriously fractious cartel has been uncharacteristically collaborative of late, as OPEC and Russia had agreed to curb their collective output by about 1.8 million barrels per day until the end of 2018.

Last month, the cartel reported 166 per cent compliance to its own cut targets — meaning it has been pumping even less oil than it had planned to.

But speaking to a Reuters reporter on Tuesday, one unnamed OPEC source said the group is considering lifting those limits sooner than anticipated, in part because of the rising price of oil. 

While WTI was briefly at $72 US, Canadian oil companies have also seen their prices rise. The blend of oil from Alberta's oilsands is known as Western Canada Select and it, too, has risen to a more than three-year high, almost touching $58 U.S. on Tuesday.

Higher oil prices are doubly helpful for Canadian producers, because they are priced in U.S. dollars, while Canadian companies book most of their expenses in Canadian dollars.

In Canadian terms, WTI is currently trading as high as $91 a barrel, Bank of Montreal economist Doug Porter noted on Tuesday.

"That's up 50 per cent  from just eight months ago."

In Canadian dollar terms, the price of WTI is now where it was, on average, during what Porter called the "go-go years for oil prices," between 2007 and 2014.

"The lack of a currency response means that Canadian consumers are feeling the full impact of higher oil prices," he said.

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Comcast prepares to top Disney's $50-billion offer for Fox

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Comcast Corp confirmed for the first time on Wednesday it was preparing a higher, all-cash offer for the businesses that Twenty-First Century Fox has agreed to sell to Walt Disney Co.

While the U.S. cable operator said it was still considering its position, it said it was in advanced stages of readying an offer that would be “superior” and “at a premium” to Disney’s all stock offer.

“While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced,” Comcast said.

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Sources familiar with the deal told Reuters at the start of May that Comcast was preparing bridge financing for a cash offer for the Fox assets, but Wednesday’s statement is the first formal confirmation by the company it is ready to move.

The same sources said Comcast Chief Executive Brian Roberts will only proceed with a bid if a federal judge next month allows AT&T Inc’s planned $85 billion acquisition of Time Warner Inc to proceed.

Disney in December offered stock then worth $52.4 billion to buy Fox’s film, television and international businesses as it bids to beef up its offering against streaming rivals Netflix Inc and Amazon.com Inc.

Disney shares have fallen nearly 3.3 percent since, reducing the value of the offer to just over $50 billion.

“It all depends on the AT&T and Time Warner deal,” said Brian Weiser, analyst at Pivotal Research. “If that goes through it is highly possible there will more than one bid for Fox.”

Fox and Disney were not immediately available for comment.

Comcast, owner of NBC and Universal Pictures, has also made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. In doing so, it topped an earlier offer for the entirety of Sky by Fox.

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A regulatory filing in April showed Comcast offered to acquire most of Fox’s assets in an all-stock deal valued at $34.41 per share, or $64 billion last November – just before Disney’s offer was agreed.

After a sale, Fox’s remaining assets will include Fox News, Fox Business Network and sports cable networks.

Comcast shares were down 2 percent at $31.83 while Disney was down 0.7 percent at $103.26 in premarket trading.

“I think Fox, or its controlling shareholder and Board of Directors, has already expressed their preference – Disney, even though Comcast allegedly offered a higher consideration already,” said Jeffrey Logsdon, an analyst with JBL Advisors in California.

“Comcast does seem intent on winning this one (and) rivalry can frequently drive prices to un-economic levels.”

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Comcast v. Disney: a fight for Twenty-First Century Fox

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PHILADELPHIA — Comcast may make an offer for Twenty-First Century Fox, potentially putting it in a head-to-head bidding war with Disney.

Comcast Corp. on Wednesday did not provide specific details on a bid, other than to say that it would be all cash and at a premium to the value of Disney’s current all-stock offer.

The Wall Street Journal and others reported earlier this month that Comcast had $60 billion to challenge Disney.

Disney’s $52.4 billion bid would go a long way in allowing it to better compete with technology companies in the entertainment business. Any tie-up would put in its stable more Marvel superheros, as well as the studios that produced the Avatar movies, “The Simpsons” and “Modern Family.” Disney would control Fox’s cable and international TV businesses as well.

Comcast said Wednesday that it’s in the “advanced stages” of preparing its bid. The Philadelphia company said the structure and terms of its offer would be at least as favourable as Disney’s.

A potential transaction with either Disney or Comcast would not include the Fox News Channel, Fox Business Network, Fox Broadcasting Company and certain other assets.

Comcast’s stock fell 2 per cent in premarket trading, while shares of the Walt Disney Co., based in Burbank, California, dipped slightly.

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