Japan Tobacco International’s Canadian subsidiary reached a tentative settlement with two other tobacco companies in a Quebec smoking and health lawsuit, agreeing to pay a $22.5 billion settlement, and JTI said its 2024 dividend plan was unaffected.
Key points:
1. Japan Tobacco International’s Canadian subsidiary and two other tobacco companies agreed to pay a C $32.5 billion ($22.5 billion) settlement.
2. In 2019, the Quebec Court of Appeal rejected the defendant tobacco company’s request. In January 2025, the mediator proposed a settlement, and JTI-MC and the other companies agreed on a settlement payment method.
3. JTI plans to record the litigation loss reserve related to the settlement as an operating expense in 2024, subject to the finalization of the restructuring plan subject to court approval.
Preliminary Settlement Reached in Canada’s Quebec Smoking Lawsuit
On March 3, Japanese Tobacco International (JTI) announced on its official website that its Canadian subsidiary JTI-Macdonald Corp. (hereinafter referred to as JTI-MC) and two other tobacco companies Rothmans, Benson & Hedges Inc. Imperial Tobacco Canada Limited and Imperial Tobacco Canada Limited reached a preliminary agreement on mediation proceedings in smoking and health litigation in Quebec, Canada, and filed related documents with the Ontario Superior Court of Justice on February 27.
JTI, and others agree to pay $22.5 billion in settlements
The background to the lawsuit began on March 1, 2019, when the Quebec Court of Appeal rejected the claims of three defendant tobacco companies in a class action lawsuit against Smoking and Health. Since then, the defendant tobacco company has applied to the Superior Court of Ontario to apply the Corporate Creditors Relief Act to ensure that it continues to operate under this legal framework. Subsequently, the defendant Tobacco companies commenced mediation proceedings with various creditors. Including the Quebec class action plaintiffs, in anticipation of finally resolving these outstanding lawsuits.
In January 2025, the court heard a hearing on the mediator’s proposed C $32.5 billion (US $22.5 billion) settlement payment. JTI-MC and the other defendants agreed on how the settlement would be paid. The company plans to include litigation loss provisions related to this settlement payment as an operating expense in 2024.
JTI said the restructuring plan will be finalized after necessary procedures such as court approval. Even if the arrangement of this reserve is confirmed, the planned dividend of 194 yen per share for 2024, announced earlier on February 13, will remain unchanged.
