The province of P.E.I. is getting $1.2 million this year as part of a recent $550-million legal settlement with two tobacco companies.
While the P.E.I. government has been taking steps to sue tobacco companies, the province has also been investing in them.
The provincial government has about $7 million invested in tobacco companies through the master trust.
Finance Minister Wes Sheridan said that amounts to about half of one per cent of the trust’s tobacco holdings.
Attempts were made to reach Sheridan, but a spokeswoman said he was unavailable, although he did provide a statement by email.
“While we do not oversee our plan internally, our pension plan is managed by a number of reputable independent fund managers who oversee our very diverse portfolio of investments,” Sheridan said.
On Monday, the provincial government filed a statement of claim against 13 tobacco companies and the Canadian Tobacco Manufacturers’ Council. The government is seeking compensation for health costs associated with smoking, including those dating back to the 1950s.
Like some of the other provinces suing the tobacco companies, P.E.I. also invests in that industry.
Sheridan said the tobacco investments were only one part of the master plan’s many holdings and the value can vary from day to day.
“We can tell you that we are carefully monitoring the situation,” he said.
P.E.I. isn’t alone with most provinces investing in tobacco companies, although Alberta sold its tobacco holdings last year as it prepared to file its own lawsuit.
For Rob Cunningham, senior policy analyst with the Canadian Cancer Society, he said his organization has long had a policy of encouraging governments to stop investing in tobacco companies.
“Because this is an industry that we want to wind down, we don’t want to maintain,” he said.
Some provinces have requirements for investments based on risk and return, which limits their flexibility, Cunningham said.
“That’s a policy that could be changed.”
As for the lawsuit against the tobacco industry, Cunningham said the cancer society supports the province’s move.
The main issue is holding the industry accountable for wrongdoings, such as advertising to kids and denying smoking caused cancer, he said.
“Consistently trying to block or weaken tobacco control measures over the years.”
Cunningham said many states were in similar positions with their investments and also sued the tobacco companies.
In the U.S. the tobacco companies settled out of court for about $245 billion, he said.
“Very significant sums.”