The Conservative government appears to have abandoned Ontario’s beleaguered tobacco industry by refusing to commit to funding an exit strategy buy out for tobacco quota holders, the leader of an industry lobby said on March 19.
Brian Edwards, president of Tobacco Farmers in Crisis, said 1,500 southern Ontario quota holders had been pinning their hopes on a signal that Ottawa would help buy out the farmers and close the industry down in the face of high taxes, declining demand and cheap, smuggled, imported competition.
Instead, the federal budget was silent on the issue and a federal official in a background briefing said Ottawa considers the tobacco industry demands too rich.
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“That attitude is tantamount to abandonment of the industry,” Edwards said. “It is disappointing. We have worked long and hard on this and believe that since government policy is responsible for the industry problem, they have an obligation. Now they seem to be saying they are not willing to engage us at the table.”
Tobacco Farmers in Crisis and the Ontario Flue-Cured Tobacco Growers’ Marketing Board have been promoting a buy out that would cost more than $1 billion. It could be phased in and they are suggesting the money come from tobacco taxes or a special tobacco tax rather than from general revenues.
Tobacco board chair Fred Neukamm refused comment on the issue before the Western Producer’s press time on March 19 as he waited for a briefing from immigration minister Diane Finley, who represents most of the tobacco farmers, on what plans the government has.
In an off-the-record budget briefing, a government official said the industry call for $1 billion was simply too much to sell, a position previously taken publicly by agriculture minister Chuck Strahl.
The official said it is up to the tobacco industry to come back to government with a more reasonable proposal for an exit plan.
“The demand for $1 billion to a small group of farmers, whether 600 (last year’s producers) or 1,500 (quota holders) simply is too much,” he said. “We are not considering a buy out at those numbers. We are willing to consider involvement in planning an exit strategy but the opening proposal must be more reasonable than that.”
The Ontario government tables its pre-election budget on March 22 and it is expected to be no more responsive to the industry demand.
