Philip Morris, BAT agree to $22.67 billion tobacco settlement in Canada

A Canadian court on Friday approved a settlement plan where the subsidiaries of three major tobacco companies, including Philip Morris and British American Tobacco, will pay C$32.5 billion ($22.67 billion).

The settlement addresses lawsuits alleging that the Canadian units of these companies were aware since the 1950s of cancer and health risks posed by their products but failed to warn consumers adequately.

A Quebec court decision in 2019 upheld a 2015 ruling to award approximately C$15 billion to 100,000 smokers in class-action lawsuits against the tobacco giants. This led to the Canadian subsidiaries—Imperial Tobacco Canada, JTI-Macdonald, and Rothmans, Benson & Hedges (RBH)—seeking bankruptcy protection.

Philip Morris' Canadian affiliate, RBH, will retain C$750 million from the upfront payment, with operational restrictions in place until the full settlement is paid. The plan, which resolves objections, is expected to be implemented in 2025.

British American Tobacco stated that the settlement will not impact its forecast for 2025.