Canada: Tobacco Advertising: Supreme Court Ashes Manufacturers’ Appeal

Originally Published in Advertising & Marketing Bulletin, July 2007

On June 28th, the Supreme Court of Canada released its much awaited decision dealing with the constitutionality of tobacco advertising restrictions under Canada’s Tobacco Act ("Act") and the Tobacco Products Information Regulations ("TPIR"). The Supreme Court found that the contested provisions were justifiably constitutional under section 1 of the Canadian Charter of Rights and Freedoms.

In response to the 1995 Supreme Court decision in RJR-MacDonald Inc. v. Canada (Attorney General), which struck down the Tobacco Products Control Act, Parliament enacted the Tobacco Act and the corresponding TPIR. The purpose of the new Act is essentially the same, but is "more restrained and nuanced than its predecessor," according to the Supreme Court.

Tobacco manufacturers challenged the new legislation alleging that some provisions limited their right to freedom of expression under section 2(b) of the Charter. The trial judge dismissed the manufacturers’ action, while the Quebec Court of Appeal found some of the provisions to be unjustifiably unconstitutional. The unanimous Supreme Court decision in Canada (Attorney General) v. JTI-Macdonald sends a strong message to the tobacco industry in upholding all contested provisions of the Act as constitutionally sound.

The following six aspects of the legislative and regulatory scheme were challenged by the tobacco manufacturers:

  1. Publication of Manufacturer-Sponsored Scientific Works

    The Act bans scientific research and publication on tobacco products where consideration is given by tobacco companies. The manufacturers argued that the prohibition on scientific works where consideration is given prevents their funding and publishing of legitimate scientific research on tobacco products. The Court of Appeal agreed and found this to be an unjustified intrusion on the right of free expression and ordered that scientific works be read out of section 18(2). The Supreme Court, however, found that this provision did not constitute a total ban and that the word "promotion" in section 18 should be interpreted to mean "commercial promotion indirectly or directly targeted at consumers."

  2. False Promotion

    Section 20 of the Act bans "false, misleading or deceptive" promotion, as well as promotion "likely to create an erroneous impression about the characteristics, health effects or health hazards of the tobacco product or its emissions." The Court of Appeal struck the words "likely to create an erroneous impression" as vague and overly broad and thus not justifiable as a reasonable limit on free expression. In contemplating this argument, the Supreme Court determined that the inquiry "must be set in factual context of a long history of misleading and deceptive advertising by the tobacco industry." In doing so, the Supreme Court determined the phrase was not overly broad or vague as it purposefully restricts the tobacco industry’s invitation to consumers to draw false inferences about the safety of the products. The limit on expression was upheld due to the important objective of combating tobacco industry’s "half-truths" and the balance of proportionality of millions of tobacco-related deaths compared with the "right to invite consumers to draw an erroneous inference as to the healthfulness of a product."

  3. Advertising and Promotion Appealing to Young Persons

    The manufacturers challenged one of three particular means in the Act of protecting young persons from tobacco advertising and production. Information and brand-preference advertising is allowed as long as it could not be "construed on reasonable grounds to be appealing to young persons." The manufacturers argued and Beauregard J.A.’s dissent at the Court of Appeal agreed that the phrase is overly broad and vague and does not give substantive notice to guide their conduct. The Supreme Court found that the provision was not overly broad given that the Parliamentary intention was to create a ban on brand-preference advertising that could be particularly appealing to young people, as distinguished from the general population. The Supreme Court, in upholding the constitutionality of the section, found the beneficial effects of the ban for young persons to be significant, whereas the prohibited speech was of "low value."

  4. Lifestyle Advertising

    "Lifestyle advertising", according to the Act, means "advertising that associates a product with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring." The Supreme Court noted the industry’s history of romanticizing tobacco through brand personalities such as the Marlboro Man. The ban goes further than restricting this overt example of lifestyle advertising and "must catch not only clear associations but subliminal associations" as well. The Supreme Court recognized the tobacco industry’s sophistication of their lifestyle advertising campaigns, and felt the wording of the Act reasonable and justified in restricting even the most subtle lifestyle associations.

  5. Sponsorships

    Tobacco manufacturers have a "long tradition of sponsoring sporting and cultural events and facilities as a means of promoting their product." Traditional or not, the Supreme Court confirmed the trial judge’s assertion that sponsorship promotion was "essentially lifestyle advertising in disguise." With respect to the use of corporate names on facilities, the Supreme Court decided that any connection to tobacco that may result from a corporate name in sponsorship constitutes the type of advertising Parliament sought to restrict. Again, the infringement on the right to free expression was justified as a reasonable limitation.

  6. Health Warning Labels

    The TPIR increased the minimum size of the mandatory health warnings on tobacco packaging from 33% to 50% of the principal display surface. Overwhelming evidence including similar international requirements, the World Health Organization’s opinion, as well as the findings in the RJR-MacDonald decision all supported the Supreme Court’s conclusion that health warnings on tobacco products increase public awareness of the dangers of smoking. The 50% requirement was found to minimally impair tobacco manufacturer’s right to convey their commercial message.

In upholding the restrictions on advertising, the Supreme Court was ever mindful of the context within which it was operating. As such, interpretations of the contested provisions were contemplated in light of the tobacco industry’s history of misleading advertising and its effect on the general health of Canadians. For now, the decision clarifies the legitimate advertising "window" in which tobacco companies can operate. Some claim this clarification will result in more tobacco advertising. Others claim the Supreme Court’s decision opens the door for a full ad ban on all forms of tobacco advertising. Context notwithstanding, other industries would be wise to take note of this development. Stricter regulation of advertising and commercial expression may not be as distant as it once seemed.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2007 McMillan Binch Mendelsohn LLP

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