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2nd Session, 36th Parliament,
48-49 Elizabeth II, 1999-2000
senate of canada
An Act to enable and assist the Canadian tobacco industry in attaining its objective of preventing the use of tobacco products by young persons in Canada
WHEREAS the Canadian tobacco industry (hereinafter called the “industry”) recognizes that tobacco is a controversial product because of the health risks associated with its use;
AND WHEREAS the industry has expressed to Parliament that it believes that smoking is an adult activity and shares the policy objective of governments and people of goodwill everywhere to prevent youth smoking;
AND WHEREAS young persons continue to use tobacco products sold by the industry despite the fact that the sale of tobacco products to them is illegal in Canada;
AND WHEREAS the industry acknowledges that public concern about youth smoking is widespread and justified and that many Canadians blame the industry when young persons smoke;
AND WHEREAS individuals who work in the industry do not wish to be responsible or to be perceived as responsible for the addiction of young persons to tobacco products;
AND WHEREAS the industry agrees to actively support the vigorous enforcement of federal and provincial laws forbidding the sale of tobacco products to minors;
AND WHEREAS the industry is aware that the methods to combat youth smoking used to date have not been effective to eliminate youth smoking;
AND WHEREAS the industry has on many occasions expressed to governments its willingness to cooperate with them in their efforts to prevent youth smoking because it lacks the credibility to take such measures on its own;
AND WHEREAS outside of Canada, tobacco companies have launched sizeable anti-youth-smoking campaigns that parallel public sector campaigns, but have encountered scepticism on the part of the public regarding the legitimacy of such initiatives and of the motives of those who sponsor them;
AND WHEREAS the industry is operating in a business climate in which it is subject to increasing hostility from the public and from government;
AND WHEREAS it is expedient to enact as hereinafter set forth:
NOW, THEREFORE, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1. This Act may be cited as the Tobacco Youth Protection Act.
2. The definitions in this section apply in this Act.
« comité consultatif »
« comité consultatif »
“advisory panel” means the advisory panel established under section 14.
« conseil d'administration »
« conseil d'administration »
“Board” means the Board of Directors of the Foundation established under section 12.
« Conseil »
« Conseil »
“Council” means the Canadian Tobacco Manufacturers' Council and includes a successor generally recognized by Canadian tobacco manufacturers as their spokesperson.
« Fondation »
« Fondation »
“Foundation” means the Canadian Tobacco Youth Protection Foundation established under section 5.
« prélèvement »
« prélèvement »
“levy” means the levy for industry purposes imposed by section 35.
« ministre »
« ministre »
“Minister” means the Minister of Health.
“sponsor of the Foundation”
« commanditaire de la Fondation »
« commanditaire de la Fondation »
“sponsor of the Foundation” means a person who pays a levy.
« produit du tabac »
« produit du tabac »
“tobacco product” means cigarette, tobacco stick, cigar or leaf tobacco intended for retail sale or any other product intended for human consumption the main ingredient of which is tobacco.
« jeune »
« jeune »
“young person” means a person under 18 years of age.
Purpose of Act
3. (1) The purpose of this Act is to
(a) enable and assist the Canadian tobacco industry in attaining the objective it articulated to Parliament of preventing the use of tobacco products by young persons in Canada;
(b) provide a framework for a national private sector effort to address the problem of the use of tobacco products by young persons in Canada that complements public sector efforts; and
(c) complement the general legislative response to the national public health problem of substantial and pressing concern addressed in the Tobacco Act.
(2) This Act is intended to achieve the industry purposes set out in paragraphs (1)(a) and (b) while attaining at the same time the purpose referred to in paragraph (1)(c).
4. This Act shall be construed and applied in a manner that achieves the purposes of this Part and attains the benefits to the industry recognized in Part III.
5. There is hereby established a corporation without share capital to be known as the Canadian Tobacco Youth Protection Foundation.
6. The objects of the Foundation are
(a) to protect the health of young persons throughout Canada from the numerous debilitating and fatal diseases and other consequences injurious to health that are associated with tobacco use;
(b) to protect young persons throughout Canada from inducements to use tobacco products and to counteract such inducements;
(c) to discourage and prevent tobacco use by young persons throughout Canada, including children, and to fight their addiction to tobacco and dependence on its use;
(d) to develop a multi-year strategy to combat the use of tobacco products by young persons and to involve young persons as much as possible in the design and execution of any programs that are part of the strategy;
(e) to examine existing models of best practices for tobacco control in North America and, in consultation with recognized health organizations, to develop a model to be applied in Canada and to review it from time to time by comparing it with other models developed in other countries;
(f) to monitor the use of tobacco products throughout Canada by gathering, commissioning, sharing and publicizing statistics and, in particular, statistics on the market share of brands and on their use by different groups of young persons;
(g) to gather, sponsor, commission, conduct and share research on the use of tobacco products throughout Canada and on ways to motivate young persons not to start using tobacco products and to cease using them;
(h) to develop and distribute educational tools, plan and execute communications strategies, run advertising campaigns, use the media and disseminate information through other means to discourage and prevent the use of tobacco products by young persons;
(i) to hold and sponsor programs, conferences and peer and other group activities to discourage and prevent the use of tobacco products by young persons;
(j) to engage in and fund, at the local, regional and national levels throughout Canada, activities of health groups and other organizations and persons that are intended to discourage and prevent the use of tobacco products by young persons;
(k) to organize, promote, coordinate, participate in and support, throughout Canada and elsewhere, financially and otherwise, all forms of activity that assists in the protection of young persons from the use of tobacco products;
(l) to recommend initiatives by government, the tobacco industry and others that could help to prevent use of tobacco products by young persons;
(m) to receive, hold and spend the funds raised by the levy imposed by this Act in order to attain its objects;
(n) to receive, hold and spend gifts, legacies and grants in order to attain its objects; and
(o) generally, to do all such things as are conducive to the attainment of its objects.
7. (1) The Foundation has the capacity of a natural person and, subject to this Act, all the rights, powers and privileges of a natural person.
(2) The Foundation may, in furtherance of its objects,
(a) borrow money on the credit of the Foundation;
(b) issue, reissue, sell or pledge debt obligations of the Foundation; and
(c) subject to the terms, if any, under which the property was acquired, create any security interest in all or any property of the Foundation, owned or subsequently acquired, to secure any obligation of the Foundation.
8. The Foundation may, in furtherance of its objects, invest the funds of the Foundation in any manner it deems suitable.
Works or undertakings necessary for objects
9. The Foundation may acquire, establish and manage any non-profit work or undertaking necessary to its objects.
Capacity of Foundation
10. (1) The Foundation may carry on its activities throughout Canada.
(2) The Foundation has the capacity to carry on its activities and affairs and to exercise its powers in any jurisdiction outside Canada to the extent that the laws of the jurisdiction permit.
11. (1) The head office of the Foundation shall be at such place in Canada as the Board may determine.
(2) Notice of the location of the head office of the Foundation and of every change in location shall be published in the Canada Gazette.
12. (1) There shall be a Board of Directors of the Foundation consisting of not less than 9 and not more than 20 members.
(2) The Board is responsible for the business and affairs of the Foundation and may, in carrying out its responsibilities, exercise all the powers of the Foundation.
13. (1) Each initial director, other than the President, shall be appointed by the Minister to hold office for any term of not more than three years that will ensure, as far as possible, the expiry in any one year of the terms of office of not more than one-third of the members.
(2) Subject to subsection (1) and to section 16, directors shall be appointed by the Minister to hold office for a three-year term.
(3) Directors may be appointed under this section for no more than two consecutive terms.
(4) Directors appointed under this section hold office during good behaviour, and may only be removed by resolution of the Board.
(5) The Board shall elect a Chair from among the directors.
14. (1) The Minister shall establish an advisory panel to advise the Minister with respect to the appointment of members of the Board.
(2) The advisory panel may include a young person, representatives of the provincial ministers of the Crown responsible for health, representatives of health groups and such other persons as the Minister considers appropriate.
Appointment of members of panel
15. (1) After having considered the advice of the advisory panel established under section 14, the Minister shall appoint as members of the Board persons who reflect a wide range of groups, communities, diverse perspectives and skills, and who are able to contribute to the achievement of the objectives of the Foundation.
(2) The Board shall ordinarily have as members
(a) at least one health care professional with demonstrated expertise in youth behaviour;
(b) at least one person between the ages of 18 and 25; and
(c) at least one representative of health care groups.
16. (1) The Board shall elect the President of the Foundation.
Chief executive officer
(2) The President is the chief executive officer of the Foundation and, subject to the direction and control of the Board, is responsible for the day-to-day direction and management of the Foundation.
(3) The President shall hold office during good behaviour for a term of not more than five years, and is eligible for re-election.
(4) The President is a member of the Board.
Duty of care
17. Every director and officer of the Foundation, in carrying out any duties and functions under this Act, shall
(a) act honestly and in good faith with a view to the best interests of the Foundation; and
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Youth advisory committee
18. (1) The Board shall establish a youth advisory committee consisting of not less than 13 and not more than 26 persons to advise the Board on strategies and programs for the achievement of the objectives of the Foundation.
(2) Members of the youth advisory committee must be young persons at the time of their appointment.
(3) Each initial member of the youth advisory committee shall be appointed to hold office during good behaviour for a term of not more than three years that will ensure, as far as possible, the expiry in any one year of the terms of office of not more than one third of the members.
(4) Subject to subsection (3), members of the youth advisory committee shall be appointed by the Board to hold office for a three-year term.
(5) Members may be appointed under this section for no more than two consecutive terms.
(6) Members appointed under this section hold office during pleasure.
Remuneration and Expenses
Remuneration — advisory panel
19. (1) Members of the advisory panel shall serve without remuneration but the Foundation may pay the reasonable travel and living expenses that they incur while absent from their ordinary place of residence in the course of performing duties and functions under this Act.
Remuneration — President
(2) The Foundation shall pay to the President
(a) the salary and benefits fixed by the Board; and
(b) the reasonable travel and living expenses incurred by the President in the course of performing the President's duties while absent from the President's ordinary place of work.
Remuneration — Board
(3) The Foundation shall pay to each member of the Board other than the President
(a) the fees fixed by the Board for attendance at meetings of the Board or any of its committees or for the performance of other duties; and
(b) the reasonable travel and living expenses incurred by the member in the course of performing their duties while absent from their ordinary place of residence.
Remuneration — youth advisory committee
(4) Members of the youth advisory committee shall serve without remuneration but the Foundation may pay the reasonable travel and living expenses that they incur while absent from their ordinary place of residence in the course of performing duties and functions under this Act.
20. The Board may make by-laws for the regulation of its proceedings and generally for the conduct of the business and affairs of the Foundation.
Meetings — Board
21. The Board shall meet at least once every two months, at the time and place of its choice.
Meetings — youth advisory committee
22. The youth advisory committee shall meet at least quarterly in each year, at the time and place directed by the President.
23. (1) The Board may establish by by-law an executive committee and other committees of the Board.
(2) A by-law establishing a committee, other than the executive committee, may provide for the committee's membership to include persons who are not members of the Board.
(3) The members of a committee who are not members of the Board may be paid for their services the fees fixed by the Board.
24. (1) The business and affairs of the Foundation shall be generally conducted in a transparent manner that is open to public scrutiny.
Board meetings public
(2) Subject to exceptions provided by by-law, meetings of the Board shall be open to the public.
(3) Subject to exceptions provided by by-law, the Foundation shall make all information concerning its business and affairs available to the public.
(4) The Foundation, on the day that it awards a contract for program services under subsection 32(2), shall publicly disclose comprehensive and detailed information concerning the contract.
Routine financial information
(5) The Foundation shall prepare and make public quarterly financial statements, which disclose comprehensive and detailed information concerning all contracts awarded under section 32 in the quarter.
Conflict of Interest
Declaration of interest
25. (1) Every member of the Board shall declare to it, in writing, every interest that could give rise to a conflict of interest with the member's duty to the Foundation.
Interests to be declared
(2) Every position, office, contract or other interest held, directly or indirectly, by the member, or by a person or persons with whom the member does not deal at arm's length and of which the member has knowledge, must be declared under subsection (1).
Timing of declaration
(3) A declaration under subsection (1) shall be made at the time that the member joins the Board and whenever after an interest that must be declared either is acquired or comes to the attention of the member.
Declaration of conflict of interest
(4) A member for whom a contract, grant, activity, plan or other matter to be discussed by the Board would give rise to a conflict of interest shall, prior to the discussion, disclose the nature and extent of the personal interest that would be in conflict and follow the directions of the Board given under subsection (5).
Council to give direction
(5) The Board shall give direction to a member who has declared a conflict of interest and shall decide whether the member may participate in the consideration of a matter, should refrain from discussion concerning it, should refrain from voting with respect to it or should withdraw from the meeting.
Member to be given option
(6) Where the Board determines that a conflict of interest exists between a member's duty to the Foundation and a personal interest of the member, the Board may, in its discretion, put the member to the option of eliminating the conflict of interest or resigning from the Board by a specified time.
Conflict of interest guidelines
(7) The Board may establish conflict of interest guidelines and additional procedures to resolve conflict of interest, including techniques for the identification of potential conflict of interest situations.
No association with sponsors
26. (1) No member of the Board may be a director, officer, member or employee of a sponsor of the Foundation.
No personal financial benefit
(2) No member of the Board may, directly or indirectly, knowingly and wilfully, receive a personal financial benefit from a sponsor of the Foundation, except when the benefit is received through the Foundation.
27. (1) Any profits or accretions to the value of the property of the Foundation shall be used to further the activities of the Foundation and no part of the property or profits of the Foundation may be distributed, directly or indirectly, to any member of the Board.
Minimum percentage for Foundation activities
(2) The Foundation shall spend 95% or more of the aggregate of all amounts raised by the levy under this Act on activities carried on by it and disbursements that directly further its objects, but nothing in this Act requires the Foundation to spend the amounts in the fiscal year in which they are raised.
Maximum percentage for administrative costs
(3) The Foundation shall not spend in a fiscal year more than 5% of the amounts raised by levy in that fiscal year on the administrative costs of the Foundation, but nothing in this subsection applies to other revenues of the Foundation.
28. Subject to all limitations imposed by law or otherwise, a sponsor of the Foundation may use the name of the Foundation for the purpose of seeking recognition of the sponsorship.
29. (1) The Foundation is established on behalf of the Canadian tobacco industry but is independent of it in order to provide the Foundation with more credibility.
Cooperation with tobacco industry
(2) The Foundation may cooperate with tobacco growers, manufacturers, wholesalers and retailers in order to achieve the Foundation's objects and in order to assist members of the tobacco industry in achieving the industry's publicly stated objective of preventing tobacco use by young persons in Canada.
No funds to be paid to sponsor
(3) Notwithstanding subsection (2), no funds of the Foundation shall be paid to a sponsor of the Foundation.
Funds are not public funds
30. (1) For greater certainty, the Foundation is not an agent of Her Majesty and its funds are not public funds of Canada.
Cooperation with governments
(2) The Foundation may cooperate with the Government of Canada or of any province in order to achieve its objects and in order to help the tobacco industry in achieving its objective, as expressed to Parliament, of preventing smoking by young persons in Canada.
Workplans for activities or projects
31. (1) A health group, organization or person that applies to the Foundation for the funding of a program, project or activity shall submit to the Foundation a workplan satisfactory to the Foundation, which must include a proposal for the periodic evaluations referred to in subsection (2).
(2) A health group, organization or person receiving funds from the Foundation based upon a workplan referred to in subsection (1) shall cause periodic evaluations of the program, project or activity to be made, to the satisfaction of the Board.
Funds for evaluations
(3) A health group, organization or person receiving funds from the Foundation for a program, project or activity shall use at least 10% of the funds to conduct the evaluations referred to in subsection (2), unless the Board is satisfied that comprehensive evaluations can be made by spending less than 10% of the funds.
Report to Foundation
(4) A health group, organization or person receiving funds from the Foundation for a program, project or activity shall cause a report of any evaluation referred to in subsection (2) to be submitted to the Foundation as soon as possible after the completion of the evaluation.
Public tender limit
32. (1) The Board shall set a limit, by by-law, over which it must call tenders by public advertisement for program services.
(2) Where the Foundation has called tenders under subsection (1), it shall not award a contract for program services in an amount over the limit set by by-law unless
(a) at least two tenders have been received; and
(b) the tender of the person to whom the contract is to be awarded offers the best value for money in the opinion of the Board.
(3) Notwithstanding subsection (1), in the case of an emergency where delay would be injurious to the Foundation, it may award a contract for program services in an amount over the limit set by by-law without calling tenders.
33. (1) The Foundation may be wound up and dissolved under the Winding Up and Restructuring Act.
Application by Council
(2) If the Foundation fails to submit to the Council a report required by section 45 for a period of two years, the Council is entitled to apply under the Winding Up and Restructuring Act for the wind-up and dissolution of the Foundation.
Property of the Foundation
(3) In the event of the dissolution of the Foundation, any property of the Foundation that remains after the payment of its debts and liabilities or after the making of an adequate provision for the payment of its debts and liabilities shall be transferred to the Council.
(4) Notice of a dissolution pursuant to subsection (1) shall be published in the Canada Gazette.
34. The benefits of this Act to the Canadian tobacco industry are declared to include:
(a) the declaration in law that preventing the use of tobacco products by young persons in Canada is an industry objective;
(b) the creation of a national program sponsored by members of the industry and standing to its credit that the industry could not have created or co-ordinated on its own;
(c) official community sanction of a credible industry-funded program of the highest priority because of the vulnerability of young persons;
(d) access to the information gathered by the Foundation regarding the use of tobacco products by young persons in Canada;
(e) the containment of the sale and circulation of industry products to young persons in an illegal and unethical market;
(f) some mitigation of the damage to the reputation of the industry that results from the negative effects of its business
(i) on young persons, and
(ii) on the morale of its workers;
(g) public recognition for funding the Foundation's initiatives to address a harmful and unethical spill-over effect of the industry's business;
(h) the improvement in the business climate for the industry that can flow from its enactment; and
(i) the basis that is laid for
(i) a greater tolerance of the industry to the extent that its products are used in a legal market, and
(ii) reasonable limits on regulation of the industry.
Levy for Industry Purposes
35. (1) Every person who, for the purposes of trade, manufactures, produces or imports tobacco products is liable, on selling, transferring, or otherwise disposing of the tobacco product, to pay a levy at the rate of:
(a) $0.0075 per cigarette;
(b) $0.0075 per tobacco stick;
(c) $0.0750 per cigar; and
(d) $0.0075 per gram of manufactured tobacco used to make a tobacco product other than a product described in paragraphs (a) to (c).
Levy to be collected only once
(2) The levy may be assessed and collected only once with respect to a tobacco product.
Reduction or waiver of levy
(3) If the Foundation, in its fifth or any subsequent financial year, determines and reports that five per cent or less of young persons in Canada are using tobacco products, the Foundation may, by resolution of the Board, reduce the amount of the levy under subsection (1) for the following year to an amount that it considers appropriate or may waive the levy for the year.
(4) Notice of every resolution under subsection (3) that reduces or waives the levy shall be published in the Canada Gazette.
Registration, statements of account and payment of levy
36. Every person who is liable to pay a levy shall
(a) register with the Foundation;
(b) keep statements of account of their activities of manufacturing, producing and importing tobacco products and furnish to the Foundation those statements and such other information and returns as are required under this Part and the regulations;
(c) pay to the Foundation the levies that the person is liable to pay under this Part, at its head office if an agent has not been appointed under section 38, or to the agent if an agent has been appointed under that section; and
(d) comply with the requirements of this Act and the regulations made under it.
Date of payment
37. Subject to regulations made under section 40:
(a) a levy that is payable, for the period from the day that this Act is assented to until the day that is the last day of the month in which the first meeting of the Board of the Foundation is held, shall be paid, on a self-assessed basis, on the 15th day of the following month; and
(b) for months after the period described in paragraph (a), a levy that is payable for a month or portion thereof shall be paid on a self-assessed basis on the 15th day of the following month.
Agent to collect levy
38. The Foundation may appoint and remunerate an agent to collect the levy for it and the Council may be appointed as agent for this purpose.
Debt recoverable in court
39. A levy payable under this Act constitutes a debt payable to the Foundation and is recoverable as such in any court of competent jurisdiction, together with all costs associated with the recovery of the debt.
40. The Minister may make regulations
(a) providing for the assessment of the levy;
(b) providing for the collection of the levy, including the setting of a date on which a levy is to be paid;
(c) providing for the manner in which the levy is to be paid;
(d) setting out the evidence by which a person's liability to pay the levy and discharge of that liability may be established; and
(e) providing for such other matters as the Minister considers appropriate.
Council may make representations
41. The Minister shall offer the Council the opportunity to make representations with respect to a regulation to be made under section 40, and must allow thirty days from the date the offer is made for the Council to make the representations.
Where Council unable to act
42. In the event that the Council ceases to exist or refuses or is unable to act for any purpose under this Act, the Minister may appoint by order, after consultation with such persons liable to pay a levy under this Act as the Minister considers appropriate, a person or body to act in place of the Council for the purposes of this Act.
Offences and Punishment
Offence by persons liable to pay levy
43. (1) Every person who contravenes section 35 is guilty of an offence and is liable, in addition to paying the levy imposed under this Act,
(a) on summary conviction, to a fine not exceeding $100,000 or to imprisonment for a term not exceeding one year, or to both; or
(b) on conviction on indictment, to a fine not exceeding $300,000 or to imprisonment for a term not exceeding two years, or to both.
Offence by employee or agent
(2) In any prosecution under this Act, it is sufficient proof of the offence to establish that it was committed by an employee or agent of the accused, whether or not the employee or agent is identified or has been prosecuted for the offence, unless the offence was committed without the accused's knowledge or consent and the accused exercised all due diligence to prevent the commission of the offence.
Offence by officer, director or agent
(3) Where a corporation commits an offence under this Act, any officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted.
(4) No person is, by virtue of subsection (3), to be found guilty of an offence under this Act, if the person establishes that the offence was committed without the person's knowledge or consent and that the person exercised due care and diligence to prevent the commission of the offence.
(5) A prosecution for an offence under this Act may be instituted, heard, tried and determined by a court in any jurisdiction in which the accused carries on business, regardless of where the subject-matter of the prosecution arose.
(6) A prosecution for a summary conviction offence under this Act may be instituted at any time within two years after the time when the subject-matter of the proceedings arose.
44. (1) The Auditor General of Canada shall annually audit the accounts and financial transactions of the Foundation and provide a report to the Minister and to the Foundation.
(2) Audits required by this section shall be conducted on a cost recovery basis, and the Foundation shall pay all costs incurred by the Auditor General in preparing a report under subsection (1).
Report to Parliament
45. (1) The Foundation shall, as soon as possible, but no later than six months after the end of each financial year, submit a report to the Council, which report must include
(a) statistics the Foundation has on the use of tobacco products by young persons in Canada;
(b) statistics the Foundation has on the market share of brands and on their use by different groups of young persons in Canada;
(c) statistics the Foundation has on the variations in the annual rates of use of tobacco products by young persons in Canada;
(d) information on the Foundation's activities and an assessment of the effectiveness of these activities; and
(e) financial statements and the auditor's report for the Foundation.
Tabling of report
(2) Within fifteen days of receiving the report referred to in subsection (1), the Council shall submit it to the Minister, who shall cause a copy of the report to be laid before each House of Parliament on any of the first fifteen sitting days on which that House is sitting after the day on which the Minister receives it.
46. (1) Five years after this Act comes into force, the Minister shall cause to be conducted an independent review of this Act and of the administration and operation of the Foundation.
Report to Parliament
(2) The Minister shall cause a copy of the report on the review conducted pursuant to subsection (1) to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the review is completed.
Published under authority of the Senate of Canada