Island government holds tobacco investments

Ryan Ross
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P.E.I. suing tobacco companies while at the same time investing in them.

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.”

rross@theguardian.pe.ca

twitter.com/ryanrross

Organizations: Canadian Tobacco, Canadian Cancer Society

Geographic location: P.E.I., Alberta, U.S.

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Recent comments

  • Bill Kays
    September 15, 2012 - 17:42

    Trusts, blind trusts, being at arms length, plausible deniability, etc., etc., etc. These are all tools that government uses to hide, to withhold pertinent information, to confuse, and to baffle or complicate matters, all in an effort to hide things from us. These so called fund managers are all crooks in a crooked industry. You would think that Sheridan or any one with good morals would advise those fund managers to only invest in ethical moral investments. Obviously that hasn't been the policy of this or previous governments and it never will unless we demand it. Investing money is NOT an honorable way to earn a living as you are doing it at someone else's expense.

  • Blair
    September 14, 2012 - 18:11

    So, let me get this straight, the government is suing the tobacco companies when they themselves are investors who profit from the sale of it? Would I be wrong to assume that if one profits from this are they not just as responsible from the outcome? I could be wrong but speaking as someone who lost his mother from cancer I can understand the feeling about tobacco, but if the government can profit from the sale and still sue and maybe profit from that as well. I would like for any laser who reads this to let us all know how we can sue the profiteers.

  • SAP
    September 14, 2012 - 12:31

    Didn't Wes used to be a rep for a tobacco company? Is he going to give back all the money he made selling those products that have caused the government all this grief? Maybe they will take it off his pension?

  • Bumper
    September 14, 2012 - 10:43

    Oh yes..we forgot to mention the government has investments in the tobacco industry and NO we don't want to talk about it! Minister Sheridan must have developed his corporate allegiance while working as a bank teller. His allegiance to the liberal party is understandable but the corporate share holders in this case are are the voters and they are not getting a return on their investment. They are rather, being taken to the cleaners while being completely ignored. Hypocrisy , arrogance and disrespect for the electorate are the hallmarks of this government. Lets hope we can bury them at the next election.

  • mike
    September 14, 2012 - 10:11

    Why would they sue for health care costs. People know its bad for them. Are they going to sue mcdonals for people being over weight

  • SAP
    September 14, 2012 - 09:22

    I am not sure how the government would have a leg to stand on, since this is a product they allowed to be sold, and profited from it. This is a nice little project for a group of lawyers though isn't it?

  • Ambulance chasing
    September 14, 2012 - 08:47

    The province has been reaping huge profits from taxes on cigarettes!! In addition, they are investors in their tobacco companies!!. I strongly agree that this is hypocrisy and would also say that the government appears to be a conflict of interest as well. On a radio news report, it was revealed that this particular lawsuit has been going on for years! PEI is just the latest to jump on board. Apparently, the other provinces who are involved, claimed they were pleased as PEI will now be helping them to pay for the enormous legal costs of this suit. And, this suit is expected to go on for many years to come! Thus far, the tobacco companies remain strong in their defences. How much will it cost the gov't (taxpayers) in legal costs?? Although one American case was cited, there have been many more where tobacco companies won. Also, American lawsuits are very different from Canadian ones including the financial gains being much less from lawsuits. Why not take this product off the market and/or help those who have or are trying to kick this legal addictive habit that the provinces are allowing to be sold to people?? To me, the provinces are just as much to blame as the tobacco companies!!

  • Hack Watch
    September 14, 2012 - 08:42

    Now that is what we would once call- going off to shoot half cocked.

    • Hack the phones until they blow up
      September 14, 2012 - 08:54

      Hack the cell phones until they get so hot they feel like they are going to blow up, nothing like not having a clue how to use your own software eh boys. retards.

  • DUH
    September 13, 2012 - 23:11

    Of course its total hypocrisy that any government continues to make revenue off the sale of tobacco products but is it any different than a government that monopolized the sale of liquor while blocking marijuana as bad or evil drugs. Pure hypocrisy. Now governments want to sue tobacco companies for the damage they caused. Thats like getting the local crack dealer to pay taxes on sales and then turn around and pay restitution to the neighborhood that he sells for damage that his clients might have done while high.

  • roundabout
    September 13, 2012 - 22:16

    Had a pal that used to pick tobacco here. Should he be entitled to sue? Who? The farmer he worked for? The govt? Tobacco was big here at one time. Why sue if you continue to sell it?

  • Seriously
    September 13, 2012 - 20:29

    This provincial government is such a calamity of errors, that a writer would never come up with so many malfunctions as this government continues to provide.

    • IDIOTS
      September 14, 2012 - 14:27

      I think my cat has more financial and common sense than all these idiot put together - and they decide how to spend all our hard earned tax dollars! Plan B, Borden Hills, "loan" to Holman, new office building for MLA's, investing in tobacco and suing the industry at the same time.............

  • doyourhomework
    September 13, 2012 - 20:25

    May have been a good move to divest of these investments BEFORE you decided to sue.........clueless