P EAT
N
IMARWICK
BATCo document for Province of British Columbia 20
April 1999


ill
-1,
I
I ~. ~ I -I . 1.
P EAT
F21, MARWICK
17 P-C,zo Q~
_1 -'~ -
BATCo document for Province of British Columbia 20
April 1999


CANADIAN TOBA,---O MA:~UFACTUREIIRS' CO'-NCIL
ECONOMIC I.ITACT OF
THE TOBACCO INDUSTRY IN CALNADA
7 OR 1982
A---GUST, 1983
C)
C:)
cc
r7,
BATCo document for Province of British Columbia 20
April 1999


PEAT
MARWICK
?RIVATE
P, \I.,,k i V.,
August 17, 1993
~'%sNorman :. McDonald
?r ident
Canadian Tobacco Manufacturers' Council
1808 Sherbrooke Screer West
Montreal, Quebec
-3 H IE5
Dear Mr. McDonald:
Re: Economic ImDact of the Tobacco Industrv in
Canada for 19R2
?lease find enclosed our report on the 19~2
economic impact of the tobacco
industry in Canada.
7 hIs study is an update of a similar
investigation Into the impact of the
tobacco industry in 1977. Our update Involved the
collection of new data from
the tobacco manufacturers, but did not involve the
collection of any new
informaticn on the activities of the tobacco leaf
growers or leaf nrocessors.
-.'-e detailed data on the growers and processors
collected in the 1977 study
vore used in the current work.
~:e wish to thank the C*T,M,C, and the tobacco
manufacturers for the
c~~nWerable cooperation which we received in
carrying out this stuey. We
a~;)reciate the opportunity to serve the Council
through the conduct of this
r2 view of the in.-aact of the tobacco industrv in
Canada.
A
t
!rr- tt I
Yours truly,
PEAT, MARVICK and ?.;R-.N-r-RS
(J4
C~O
-,j
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April 1999


" I "M
53
CANADIAN TOBACCO XANUFACTUKERS' COUNCIL
ECONOMIC IMPACT OF
THE TOBACCO INDUSTRY IN CA:;ADA
FOR 19b-2
A~GUST, 1983
0 :1.
BATCo document for Province of British Columbia 20
April 1999


-1
A
r9
Z"CO-NO~'IC L'fPACT OF THE TOBACCO
IN CANADA FOR 1982
TABLE OF CCN`MNTS
E1 :EC',:-:VE S!2~~.ARY
.................................
IN1MO D CC: :0 N
......................................
II !)ESCR::7:0!.' OF TILE TOBACCO INDUSTRY
Leaf 'Srowers *"**""*****"*'*"'**"**"***"'**,
Leaf ?7ocesso I.
...................................
Tobac--o Products Aanufacturers
....................
Wholesalers and Retailers
.........................
DEFI,\*I--:Ot; OF ECONOMIC IMPACT
.....................
Money 7'-o.s
.......................................
Direct and Indirect Impacts
.......................
Measures of Impacts
...............................
IV - CONSLI~--R SF:XDII;G
.................................
V - TA.%'-S
.............................................
VI - LM?.4C: OF CANADLkN CONSUMER EXPENDITURE
ON THE CANADIAN ECONOMY
...........................
Comparison writh Gross National Product
............
Impacts by Industry
...............................
Multipliers
.......................................
%,I I L11PACT OF EX?ORTS
.................................
Co=par--*son vith Gross National Product
............
Impacts by industry
...............................
Multi~-'-iers
.......................................
Paee
I
2
2
2
3
3
Z
I
6
8
9
10
11
11
12
14,
1
15
15
co
BATCo document for Province of BritiSh Columbia 20
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L71- 1
I
TABLE OF CONTE.V-"S
2 -
TA:-:'"ES Paec
Ta'--le I Consumer Expenditure on Domestic and
1--ported
Tobacco Products in 1982
................................. 8
Ta'Dle 2 Federal and Provincial Taxes on Canadian
Sales
of Tobacco Products in 1982
.............................. 9
Opposite
EX"IBITS Page
1. Disposition of Total Consumer Expenditure on
Domestic and :-aported Tobacco Products 1982
.................... 8
2. Total Direct and Indirec: Impact of Canadian
Consumer Spending During 1982
................................. 10
2 A. Total Direc: -ampact of Canadian Consumer
Spending During 1982
.......................................... 10
3. Impact by Industry of Consumer Expenditure in
1982 ............. 11
4. Total Canadian Impact of $100 Million of
dditional Totacco Sales in Canada
............................
A -
12
5. Total Direct and Indirec: Impact of Exports in
1982 ............ 1~'
5.;. Total Direct :7-.pact of ---xports in 1982
........................ i 1.
6. Impact by Industry of Foreign Consumer
Expenditure in 1982..... 15
7. Inpact of S10? Million of Additional
Export Sales
......................................... overleaf
15
CD
BATCo document for Province of British Columbia 20
April 1999


rg
EXECUTIVE S'_'TIARY
This report contains the findings of a s:,dy of
the impact of the robacc-_
industry on the Canadian economy in 1982. In the
context of this study, the
tobacco industry is defined to include all
businesses which have a direc: role
in supplying Canadian tobacco consumers.
Therefore, the industry consis:s of
tobacco leaf growers, tobacco leaf processors,
tobacco products mantfacturers,
wholesalers and retailers.
In 7-982, Canadian consumers spent S4.4 billion on
tobacco products. Our
analysis of :hat expenditure indicates that:
0 direct tobacco taxes by the federal and
provincial govern-
men:s represented 5U of every dcllar spent by
Canadian
cons umers of tobacco products;
0 the tobacco industry is overwhelmingly Canadian
in its
impacts; only about 5% of the economic impacts of
the
tobacco industry "leaked- out of the Canadian
economy in
the form of imports;
0 the S4.- billion expenditure led to the
generation of:
- SI-O billion of wages and salaries paid to
workers directly and indirectly employed by the
tobacco industry
- SO.7 billion of business income
billion of go~er=ent revenues
62,100 person-years of employment.
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0---r analysis does nor consider the impacts
gencrated by the re-spending of
wages and salar,
4 eS paid to workers. It also does not consider
the impacts
generated by the re-spending of government
revenues. Inclusion of one or both
o~ these factors --iould substantially increase
:lie impacts generated by tobacco
cor.1sumption.
in 1982, the total direct and indirect impact of
Canadian consumer expenditure
contributed I.Z,' of Canada's gross national
product.
10 T~e industries which received the greatest
indfrect benefits from the tobacco
consumption were:
- financial services
- printing and publishing
- paper producers
- transportation.
In 1982, foreign consumers spent $132 million on
Canadian tobacco products.
Our analysis of these export sales indicates that:
e S119 million of impact was g.!nerated in the
Canadian
econor3y;
6 the total impact included $58 million of wages
and
salaries, which resulted in employmen: for over
4,100
Canadian -orkers.
7 he impact of consumption by foreign consumers
contribiited 0.03% of gross
national product.
N.)
U4
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Fffl
I - INTRODUCTION
7 his report con:ainS the ftndiags of a study
carried out to asiess the impact
of the tobacco _:nd,.~szrv on the Canadian economy
in 19b2 in terms o~r employ-
ment, income genera:_fon and taxes paid.
Ihis study is an u:_~aze o--: a similar
investigation into the econo=ic impact of
the tobacco i-id,.;s:::: In 1977. Inflation,
de=ographic shifts, increases in the
level oi feder-=-' anz pro-:incial taxation on
tobacco products, and other
economic tr.!nds %a-_ aL-' affected the tobacco
industry in the interim, making
it appropriate to c_- :v out an update at this
time. Despite tnese changes,
many of c:ie dezaile: ca:i contained in the 19,77
study are still useful and
formed part of :ne _~npu: to :ie current work. A
complete discussion of the
sources of the inf:=a:ioa used in this updac. is
contained in a separate
Technical Appen_'ix.
LI
VIA
L,4
L<
BATCo document for Province of BritiSh Columbia 20
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DESCRIMO, OF 7HE TOBACCO INDUSTRY
N
We ---se a :road definition of the term --obacco
4-idustry" to include a'1
or.-anizat,-ons i-i the economy that have a direct
role in supplying thz tobacco
cons-=er. The tobacco industry, as def-Eined in
this study, consists sf five
co=:3nen~s:
(ii Leaf Growers
(ii) Leaf Proc,!ssors
Ciii) Tobacco Products Manufacrurers
(iv) -holesalars
(v) Retailers
In aDplyi-..i this definition, we iacluce only
those parts of businesses that
are devoted to handling tobacco products. Thus, we
do not include t-e entire
operation if every wholesaler or retailer who
he-idles tobacco produc:i; we
in:!,ade just the share of the wholesaler's or
re:ailer's business tha: is
dev.;zed to tobacco products.
Leaf Growers
In .482, Caaada had over 3,400 leaf gro-.,ers, the
bulk of whom were co7.centrat-
ed ~--i Sou:hwes:ern Oncario. The remainCer were
in Quebec, Prince Zd-.-~-%:d
Is- 'rid, Nova Scotia, and N#--w Bruns;.;i.~k. The
gro.-7ers grow the raw to--azco,
whi:- ib ::i=n prucas:ed by leaf process.;rs.
Lea- ?rocessors
r
priz--ssin, i, tne meEnOd Dy he-ra;.; tobacco is
re6radec,
d, thresneO, separacez, reiried, and packed for
u-~,i by the
Man--1.1Ct,;-=r. There are r, .ive ?rocessinz
plants ~.n Ontario and one in Quebec.
Thr=E uf ::-.e si\ plaiit~ ~re o;~--.ed an.;
o.)erate-d ~y domestic ranufac--u7=:.s and
L:I-ze are and 3pt!rated by leat ae:-er
curnpanies. A SUOSLan:ia! amount
e pr ~e-,se zcbj,~zo 1:i des ined f) - export
7-.arl-ts.
A-
(-,4
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T-
E 3
To~-acco Products Manufacturers
The manufacturers purchase the processed leaf and
produce finished tobacco
products. 11-.ere are four main tobacco products
manufacturers in Canada, who
account for virtually all Canadian production:
Benson an~ Hedges (Canada) Inc.
Imperial Tobacco Limited
RJR - Macdonald Inc.
Rothmans --f Pall Mall Canada Limited
The manufacturers have all of their production
capacity in Quebec and Ontario.
Each manufac:urer has a presence in most other
provinces through its sales
force and distribution services.
Whc1esalers azd Retailers
The outzut o- the manufacturers is sold to
Vholesalers who in turn sell to
re:ailers. 13o:h typically carry a broad line of
products. In recent years,
ce7:ain large retailers have begun to purchase
their tobacco products directly
frzm the manufacturers.
BATCo document for Province of BritiSh Columbia 20
April 1999


FF3
III - DEFINITION OF ECO':0MIC I'TACT,
Before tne findi7~zs 0 f cli-is study are
presenced, ~he term "economia impAct",
as defined withi:~ the contexi of the tobacco
industry, requires exnlanation.
Money Flows
When a consumer 7--rchases a package of cigarettes
(o-- any other tobacco
product), he pays- a certain amount of money to a
retailer. The retailer has
alreadv -3aid a lesser amount of money for the
cigarettes to a holesaler. n. e
differenze is the retailer's markup, from which
-ages of staff, rent, utility
expenses, and all other costs of operation are
paid and profi-- is derived.
The wholesaler, 4-7. turn, has already paid the
manufacturer for --he cigarettes
and also marks u; :hat cost :o earn profit and to
pay staff wages, distri-
bution costs, :en--, etz. Ln addition, the
wholesaler pays provincial tobacco
r;
taxes on the cig-z7ettes. 7he manufacturer uses
the proceeds from sales to
purchase processe-z tobacco, to pay employees, to
pay for product advertising
and promotion, t: purchase packaging materials and
other inputs, to earr. a
profit, and to p_=,: federal exzise tax, excise
duties, and sales tax. Tobacco
leaf prc:essors, :1he producers of the processed
tobacco, in turn pay their
expenses and earn their profits from sales. The
processors' =ajor expense is
unprocessed tobazzo, Vvich :s produced by tobacco
leaf growers. The growers
use the proceeds ~f their sales to pay for labour,
purchase seed and
fertili':er, pay -.ir their energy consumption and
other expenseq, and earn
their n-ofits.
see --'-at t-e money spent by the consumer on eac)
package of
Conseq-,;ent_ vL
aflers' costs, wholesalers'
cigaret:es !lo-s :)rough the economy to pay for
ret-
costs, ;rovLnc.J*a-_ t.txes, manu fact urer s'
costs, federal taxes, leaf processors'
costs, znd leaf .-:-3wers' costs. The tracinf- of
this flow of :-e e\pendttures
of all zonsLLiers -i tohacco products throug!-~
the economy is called impact.
L-4
C__
C:>
U11
U-4
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,A .
-1
Direzt and Indirect I=Dacts
T~.e --ffec-.s of the onsumer expendirure on
tobacco oroducts are not Limized to
her businesses, -u---i as oulp and
or s ith n the industry itself. Ot
pa- companies, fertilizer producers, printing
industries, and many others,
su:::*y the tobacco industry with its needs. These
businesses are in~-zrectly
de-:=-ndenc on the consu:-aer of tobacco products
for a portion cf their
li-:Kihoods. In addition, these suppliers to the
tobacco industry have
su::,.:-'iers of their own who also -indirectly
depend on the consuaptior of
tc'-=-zco prod uccs. In all0 f the results
presented ;-n this report, --
di-=:~-nguish between direct impacts Cimoacts
viewed from the -,erspec:-'-.re of the
to--=-zco industry) and indirect ir..jacts
(impacts vie~:ed from :he pers-,ective of
bo:- direct and indirect suppliers to the tobacco
industry).
of :ourse, not all of the consumer expenditures
affect only Canadians. Some
of :ie expenditures "leak- out Of Lhe Canadian
economy in the Eorm c-- imported
su:-Iies. Conversely, foreign consumers purchase
P. certain amount of domestic
to"---Tzco products (pri=arily processed lea")
which benefits the Canadian
ec:7.omy.
C~ur analvsis,,do:s not ider the impacts of
re-spending the wages and
sal-2ries pai- t workecrosnesmploved directly or
indirectly as a result of the
conz---ner expenditure on tobacco products. It
also da,!s not consider the
.A i:-::-=:ts of re-spending government revenues.
Inclusion of one or bo:- of these
faz--ors w-3uld substantially increase the impacts
presented in this report.
LN
CD
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.I
11 T1
11 T)
I
of 17.,,~act
6
':!-.en we assess :he impact of the tobacco
industry on the Canadian econ,~My, we
have several different measures at our disposal.
The measures that we use in
this report are:
,otal Econ:zic !=Dactt- which :xamin:svthe flow of
alliconsumer
expenditures through he entir econ m. and
considers ts
ultimate dis:)osirion as income to various
economic groups: wages
and salaries (beffore deductions), business
income*, gover=ent
income, an` paF--ents made to foreigners for
i=ported products.
in defininz total economic impact, we include all
of these
incomes wi:- the exception of payments for
imported products.
T~ie tocal --7ec: impact consists of the wages and
salaries paid
by the tobz.^co industry to its employees, the
business income
earned by :-e tobacco industry, and government
income con:ribut-
ed by the _':tdus::v. The total indirect impact
consists of the
Canadian u-aZ:s and salaries, Canadian business
income, and
Canadian&--, r=ent income generated from the
purchase of goods
and servizes b, the tobacco industry. The total
direct and
indirect i=:*act ,:e presents the industry's
contribution to the
gross nat ic :~al roduct of Canada.
I=Dact on ';azes and Salaries - which examines
that part of total
economic i=zact which represents the gross wages
and salaries
(before de~4z:::ions) of Canadian workers. The
direct wages and
salaries are paid to the employees of the tobacco
industry; the
indirect -azes and alaries are paid :c the
Canadian employees
4-nduss-tries.
o" the su7-,'-'-er
Busine!.s inzzme essentially consists c-- the sum
of pre-tax
profit!,, ---res: pa~-.encs, and depreciazion. It
includes the
em_-_Io~.enz ~_-.::o=e of self-enplcyed wo:kers.
CO
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-A
Emr!:-,ment 1=:ac: - which converts the wages and
salaries data
into the n=ber o- Canadian workers employed
(incL-.~ding self-
emp'::-.-ed -rkers)- The direct employment impact
ccnsists of --he
T-1 toba--:o industry's employees; the indirect
emplo,.ment impact
con-=:.sts of t"ne -~:kers employed by the
industry's suppliers.
7-j Sales I=Dact --h_~zh examines the total sales
by all companies
of ::"-e products t-at are eventually purchased by
tobacco
cons ---ier s -Because indirect suppliers sell to
other indirect
supTliers whc eventually sell to direct suppliers,
there is a
r dou*--* e-counti n& o- the sale of certain
intermediate products in
this measure of i=::act. Ihis measure may,
therefore, be greater
than the total eccnomic impact.
We used :he Statistics Canada computerized
input-output model of the national
and can :rovincial ec:::omies to analyze our input
data and to determine the
kev meas--res of '=jac:...Thenodel isuusedo to
trace th flow of consumer
spending to its basic _- pon nts. Th s, f r
example, :he model traces the
flow of cons=er spena'ing :rom consumers to the
tobacco industry for the
purchase of tobac:o products, from the tobacco
industry to specialty paper
producers for the our:'-ase of cigarette paper,
from the specialty paper
producers to their su:--liers for the purchase of
wood chips, from the wood
chips su7-~lier to the zetrole= industry for the
purchase of fuel oil, from
the pet-.-.e= industry to office supply
manufacturers for the purchase of
office s-_-::Pl_`es, and s: on.
NJ
BATCo document for Province of BritiSh Columbia 20
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EXH;=-!7
DISPOSITION OF TOTAL CONSUMER EXPENDITURE
ON DOMESTIC AND IMPORTED TOBACCO PRODUCTS 1982
CANADIAN CONSUMERS
RETAIL MARGINS
15.0
PROVINCIAL TAXES
PAID BY
TOBACCOINDUSTRY
26. 1 t
WHOLESALE
MARGINS
MANUFACTURERS,
PROCESSOR,
AND GROWERS
28.4
FEDERAL TAXES
PAID BY
TOBACCO INDUSTRY
26.9
PEAT
ki ARWICK
E
BATCo document for Province of British Columbia 20
April 1999


IV - CONS-ER SPE':::NG
Total Canadian consLLner expenditure on
docestizally-produced tobacco products
during 1982 was S4,253 million. Canadian cons-=ers
also spent $170 million on
imported products in 1982, for a total expenditure
of $4,423 million. This
spending was distributed as shown in 7able 1:
T.!3Lv- 1
CONSUMER EK11E%:=URE ON :1)MESTIC
A~'D IMPORTED TOBACCO PRODU:7S IN 1982
Do=estic Imported Total
(Million S) (million $) (million S)
Retail Margins S 536 S 27 S 663
Wholesale Margins 145 15 160
Revenue to Yanufacturers,
Proces3ors and Growers 1,218 37 L,255
Federa*. Tobacco Taxes 1,144 47 1,191
Provincial Tobacco Taxes 1,110 44 1,154
S-~,253 $ 170 s~1,423
Enhibit 1, opposite, expresses the above
irtfor--ation in terms of the dispos-
ition of one dollar of consumer expenz:iture on
domestic and imported goods.
Thus, 26.91 of every consumer's dollar in Cana--a
is destined for the Federal
Government and 26.11 for the various --rovincial
Governments as direct
tobacco taxes - a total of 53.0e in a'-!. The
-7anufacturers, processors and
growers retain Ze.4e. The impact of :his
expe-iditure is discussed in
Seztion VI.
Foretgn constriers spent S13'_ mill-fon ~n
Carta,i-_*3:~-pro-iuced tobacco products,
Ihe bulk of the exports being processed leaf
;.--)duced in Ontario. The i-mpact
of export sales is discussed in Secti-on VII.
CZD
CD
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CD
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_T_
9
Table 2, below, shows the duties and caxes ::=4d
'-- the tobacco industry in
1982 to the federal government and the var4_:-_-s
provincial governments.
"Federal tobacco taes- include federal exc4se
ducies, federal excise tax,
federal sales tax, and customs duties on
i.:~:orted tobacco products.
"Provincial tobacco taxes" include speciftc
-:ro,.--'ncial tobacco taxes and,
where they were applied, provincial sales taxes.
Ocher taxes generated by
tobacco consumption, such as corporate income
taxes, personal income taxes,
other import duties, property taxes paid to
=unizipalizies and unemployment
insurance premiums, are not included.
Total federal and provincial taxes represen:ed
153.OZ of the total consumer
expenditure in Canac'.a on domestically-produced
a:-.d imported tobacco products.
TAB'_T 2
FEDERAL AND PROI:'.',CL-.-- Tk.,:ES
ON CANADIAN SALES OF TOBACCO =ROD',*CTS IN 1982
C S 000's
Federal Excise Duties s_~87,299
Federal Excise Tax 4,95,577
Federal Sales Tax -00,485
Cus:oi Du-,ies on Imports 7,718
Total Federal Tobacco Ta,:es s!,:91,079
Total ?rovincial Tobacco 7axes l,'_53,571
Total Taxes s'_,3_`4,65O
C=)
CD
CD
r1 j
BATCo document for Province of British Columbia 20
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EX~-:BIT 2
TOTAL DIRECT AND INDIRECT IMPACT OF
CANADIAN CONSUMER SPENDING DURING 1982
(MILLIONS OF DOLLARS)
TOTAL CONSUMER
EXPENDITURE ON
TOBACCO PRODUCTS
4423
STAYS
IN CANADA IMPORTS
$4205 $ 218
WAGES AND
SALARIES
$1041
EMPLOYMENT
62,ICO JOBS
BUSINESS FEDERAL PROVINCIAL OTHER
INCOME GOVERNMENT GOVERNMENT GOVERNMENT
TOBACCO TOBACCO REVENUE
TAXES TAXES
$ 730 $ 1191 1154 89
r
L
1
I
j
PEAT
MARN ICK
Z 0 i C-
BATCo document for Province of British Columbia 20
April 1999


EX"1817 ZA
TOTAL DIRECT IMPACT OF
CANADIAN CONSUMER SPENDING DURING 1982
(MILLIONS OF DOLLARS)
TOTAL CONSUMER
T
URE ON
EXPENDI
TOBACCO PRODUCTS
4423
STAYS
IN CANADA DIREC7
IMPORTS
4386 $37
TOTAL
INDIREC7
IMPACTS
8!8
TOTAL
DIRECT
IMPACTS
$ 3528
WAGES AND BUSINESS FEDERAL PROVINCIAL
SALARIES INCOME GOVERNMENT GOVERNMENT
TOBACCO TOBACCO
TAXES
$ 694 $ 489 $1191 TAXES
1154
EMPLOYMENT
45
400 JOBS
,
P E. AT
NIAM ICK
~QVC-70 [0C
BATCo document for Province of British Columbia 20
April 1999


I~J
WT-1
L
Is[A
VI - _"IPACT U CANADIAN CONSLI.MZR
EX?END17URE ON THE CAN.!,DIAN FCONO~IY
Exhibits 2 and 2A, opDosite, show the total
economic impact of consumer
expenditure on tobacco products in Canada during
1982. Exhibit 2 shows total
direct and indirect impacts; Exhibit 2A shows
direct impacts only.
The S4.4 billion spent by Canadian consumers on
tobacco proeucts resulted in a
$4.2 billion impact on the Canadian economy; the
remaining SO-2 billion (-.9Z
of the total expenditure) eventually leaked out of
the economy in the form of
impacted products and supplies. The data presented
in Exhibits 2 and 2A
indicate that-
0 about 85, of the SL-2 billion of impact on the
Canadian
economy consisted of direct impacts: wages and
salaries
pEid by the tobacco industry, business incomes
earned by
:Ire industry and tcbacco taxes paid by the
industry;
0
the S4.2 billion direct and indirect impact
consisted of
approximately:
- $1.0 billion of wages and salaries of Canadian
workers (before payment of income taxes)
- SO.7 billion of income of Canadian businesses
(before payment 3f income taxes)
- S1.2 billion of revenue to the federal
government
- SI.2 hillion of revenue to the various
provincial
governmen:s;
0
:he z1.3 billion o~ wages and salaries resulzed in
employ-
Ment for 62,100 Canadian %,:orcers.
Z.
BATCo document for Province of BritiSh Columbia 20
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ETMIT 3
Llnl= BY 7-'==Y CF ONSUIR -=:)rMRE ::; 1982
C.L';ZIA.N
WACES & SALARM :~-*LMFBT zAT
(S mill ion) (pec-son-years) (S mill:zn)
DM= DDDU-. D= DO=. MT-
CMOs Pwmlc--C- 7=741----,
7.!-.~Co reaf Zr:-,ers 59 - 6,277 2 7
ToL,xco Leaf ?-xessors 20 - 682 276
t:,b.o Frodur-- 'Wadaczxers 238 - 7,595 1,196
Printirg xd - 48 - 2,113 1-13
,aper and AU-**z: Dzelustries
- 28
- 1,078
~bnscrxtion - 11 - "3 37
Chanical - 7 - 250 44
.4--cal Fhbricac--
- 6
- Z30 Z"
Food and Bever=Fe - 4 - 185 Z9
kibber and Produr-cs, - 4 - 192 16
Other ~ianufa= - 31 - 2,354 210
SM"ICE MMS--:Z-r5
Tobacco Pcodx: -ecail 314 - 28,077 - 661*
Ibbarco Produr: 4-.olesalle 63 - 2,798 - 139*
Rname, -Insurance and %-al Estate - 58 - 2,501 163
Caumnicacion, - 39 - 1,356 70
Transportation --u' Storage - 35 - 1,484 96
rk-,r~ices co Saslness Imagment - 32 - 2,425 79
-ther Services - 2,083 392
TOMAL 694 347 45,429 16,694 3,922
TIOYM DUMT V.--
L\MM= LITAC.' 1,041 62 ,1123 3,922
Zn accordante i~,zh cz~~.,P-nrim, clue sales -)f
utclesalers; and
recailers reprisent -ar-'-wps only.
PEAT
MARWICK
LA
L
7 f
F~
CD
L
L
BATCo document for Province of British Columbia 20
April 1999


V-1
9-1
z-
Comparison with Gross National Product
The total direc t ane. indirect impact of the
industry compares with the 1982
Ca ndian gross national product as follows:
Canada
Impacts by Industry
TOBACCO INDUSTRY
IMPACT
billion)
4.2
G%P PERCENTAGE
(S billion) %
356.6 1.2
Exhibit 3, opposite, details the impact of the
tobacco industry on the
Canadian economy by Lnduszry. Detail is presented
for three measures:
wages and salaries
employment
sales.
The Exhibit shows that in 1982:
0 $1,041 million ef the consumer spending on
tobacco products
eventually worked its way down to the wages and
salaries of
Canadian workers employed directly or indirectly
by the
industry;
0 this amount resiLlIzed in employment for 62,100
workers,
ahout 4~'-Wc di:-actly and the remainder
indirectly;
0 all businesses cassociated with suppling the
zobacco
coisumer in C--4na--*a (both direct and indirect
suppliers)
C-1
NJ
C)
BATCo document for Province of BritiSh Columbia 20
April 1999


EX 17
TOTAL CANADIAN IMPACT OF S100 MILLION OF
ADDITIONAL TOBACCO SALES IN CANADA
(MILLIONS OF DOLLARS)
TOTAL CONSUMER
I
EXPEN:iTURE ON
TCBACCC PROOUCTS
S 00
~-AYS
IN
t 95
----S AND
SALARIES
$24
EMPLOYMENT
AT TOBACCO
MANUFACTURERS
172 JOBS
BUSINESS
INCOME
OTHER
EMPLOYMENT
1233 JOBS
FEDERAL
GOVL-RNMENT
TC~ACCO
AXES
S ZT
TOTAL JOBS: 1,405
EMPLOYMENT
MULTIPLIER 7* 1
IMPORTS
5
PROVINCIAL OTHER
GOVERNMENT GOVERNMENT
TOBACCO REVENUE
TAXES
26
$2
PEAT
r
g
MA,,V,CK
9.0 t ~ z 0 t 0
BATCo document for Province of British Columbia 20
April 1999


12
-A
recorded c=-.;Iative sales of S3,922 m-~Uion
(excluding
tobacco taxes) attributable to tobaccc
cons--=ption;
th
ind
whi
st
f
h
i
di
d
h
I
T- 0 u
e
r
es
c
rece
ve
t
e grea:est
n
rect
benefits ii :erms of employment and sa'~es uere:
- "nancial services
- ?r--iting and publishing
- pa-per producers
- transportation
business services
cc:--munications
ccnstruction.
4 ultipliers
Exhibit 4, oDposite, ::resents the key impacts
alrea--:-.- described in terms of
Itipliers. Two ty;es of multipliers are presented-
6 total ecOTO=4C impact multipliers - ~.4ch
4ndicate the
value-add -d =pact of each $100 million of
Zanadian
consumer -x;enditure on tobacco produz-.s.
4
0 emDlo,.,meni it:jact multiplier - which -
rdicazes the number
of jobs e.'se-.-here in the Canadian econ,--ay
s-zpported by each
jo'-- in thf -zanufacturing segment of t~e
col~acao industry;
.ie data i-i 'Exhibit -~ indicate that:
-A- a every job in :he tobacco manufacturinz
seg-:ant of the
1 iidustry !u:-::,)rted an additional 7.2 -:5s i7
Canada;
(A
NJ
C)
BATCo document for Province of BritiSh Columbia 20
April 1999


r
0 for every $100 million of tobacco products sold
by tl-.e
industry in Canada, an impact of $95 million
(including
$27 million of direct federal government caxes on
tobacco
products) and over 1,400 person-years of
employment ere
generated in the Canadian economy.
13
~A
CD
BATCo document for Province of BritiSh Columbia 20
April 1999


EXHOT 5
TOTAL DIRECT AND INDIRECT IMPACT OF EXPORTS IN
1982
(MILLIONS OF DOLLARS)
TOTAL EXPENDITURE By
FOREIGN CONSUMERS ON
TOBACCO PRODUCTS
132
STAY S
IN CANADA IMPORTS
119 $13
.-ES AND BUSINESS FEDERAL PROVINCIAL OTHER
SALARIES INCOME GOVERNMENT GOVERN ENT GOVERNMENT
M
CO REVENUE
TOBAC
TOBACCO
TAXES TAXES
$ 58 $54 $ 0 $ 0 7
EMPLOYMENT
4,2CO JOBS
PEAT
MARMCK
Z 0
BATCo document for Province of British Columbia 20
April 1999


EXH12!- 5t
TOTAL DIRECT IMPACT OF EXPORTS IN 1982
(MILLIONS OF DOLLARS)
TOTAL EXPENDITURE BY
FOREIGN CONSUMERS ON
TOBACCO PROD UCTS
132
STAYS
IN CANADA IMPORTS
132 ~ 0
TOTA L
INDIRECT
IMPACTS
56
TOTAL
DIRECT
IMPACTS
765
WAGES AND BUSINESS FEDtNAL PROVINCIAL
SALARIES INCOME GOVERNMENT GOVERNMENT
TOBACCO TOBACCO
TAXES TAXES
37 39 $0 0
EMPLOYMENT
3, 100 J CBS
PE-XT
"OAMVICK
z 0 1, 0
BATCo document for Province of British Columbia 20
April 1999


14
VII - IITACT OF EXPORTS
A.11 of the prior analyses have been based on
consumer expenditure in Canada on
domestically-produced and imported tobacco
products. This section examines
the impact of the tobaczo industry's exports on
the Canadian economy.
Exhibits 5 and 5A, opDosite, summarize this
impacc. Exhibit 5 shows total
direct and indirect impacts; Exhibit 5A shows
direct impacts.
The data presented in the Exhibits indicate that
the export of tobacco
products in 1982 generated:
0 $119 million of impact, consisting of
- S59 ii1lion of wages and salaries
- S54 =-,'Ilion of business income
- S7 million of government revenue;
0 the S58 millior. of wages and salaries resulted
in
e=ployment for over 4,100 Canadian workers.
Comoarison with Gross \ational Product
total direct and irdirecc ir.-.pact of exported
tobacco products compares
with the 1962 Canadian gross national product as
follows:
.3 BACCO 1NOUSTRY
IMPACT GNT Pl-:RCE\TACT-
(S billion) (S billion) Z
Canada 0.1 35;,.6 0.03
D
Nj
BATCo document for Province of BritiSh Columbia 20
April 1999


ETMrr 6
LITM7 BY INU= CF FOREIG, COMUln EIMMITM IN 1982
CANADA
,ACES & SALARIES Elp=f:.T
(S =Ulion) (person-years)
DIMT MBUM= DI=1 LNM=
SALES
3 cLLlion)
TOTAL
-cbacr-o leaf ~rouers 26 - 2,759 - 104
~2)hxco Leaf ':-'- essors 9 - 300 - 121
-cbacco Produ= .43md'acturers 2 - - 13
Printing wid ~-%blisnl:ng - 1 29 2
?toer and AU-ed Industries - 1 38 4
:onsr-rurtion - 2 65 5
CI-1-1 IndLz=ies - 1 - Z4 4
Metal Fabric-sLing - 0 - 10 1
-*~d and Beve--2ge - 0 - 13 2
:Libber and Kzscic Products - a - 7 1
Xher Immufac: zing - 130 21
aaVICE IN11-17-IE-S
7,:~~.o Product Retail - - 0
-'~bacco Produz: ;ftlesale - - 0
71--ance, rinstr-as-re and Real - 6 - 7-89 15
Estame
C7 mmir-atior. - I - Z5 2
'Iramportation and Storage 1 - 72 5
5.---.Icas to I..-:L-iess MuWavent 2 - U!, 4
-X-ex Services --L - - -204 17
TOTAL 37 21 3,140 1,0r- 321
=AL DM= V:~
73 m= LMF"-- 58 4,161 321
PEAT
MARWICK
BATCo document for Province of BritiSh Columbia 20
April 1999


LA
I-A
k-A
I-
t
A
LA
A.
impacts by Indus:r,
Uhiblc 1, opposf:e, shows : ne Impact of exports I
y industry o, wages and
salaries, employMent, and sales. The Fxhibi: shows
that in 1982:
0 all,busi7essestin *Zaaada collectively recorded
sales of
$321 million a rri--ucable to the exports of
tobacco
products;
0 the i-idus:ries which received the greatest
indirect
benefits .,ere:
- financial services
- transpor:ation
- consr-ruc:-4on
- business services.
Multipliers
Exhibit 7, overle--, presenzs the total impact of
exports in terms of
multipliers. Ihe --'ata in t-e Exhibit indicate
that for every S100 million of
tobacco produc:s exported, an impact of $90
million and over 3,100 person-
years of employme-.z were generated in the
Canadian economy.
BATCo document for Province of British Columbia 20
April 1999


kL
A
EXHIBIT 7
IMPACT OF S100 MILLION OF ADDITIONAL EXPORT SALES
(MILLIONS OF DOLLARS)
T01AL EXPENDITURE BY
FOREIGN CONSUMERS ON
TOBACCO PRODUCTS
100
STAYS
IN CANADA IMPORTS
90 $10
WAGES AND BUSINESS FEDERAL PROVINCIAL OTHER
SALARIES INCOME GOVERNMENT GOVERNMENT GOVERNMENT
TOBACCO TOBACCO REVENUE
TAXES TAXES
$ 44 41 0 0 5
EMPLOYMENT
33153 JOBS
PEAT
MARWICK
BATCo document for Province of British Columbia 20
April 1999


BATCo, document for Province of British Columbia
20 April 1999


S ~ ic-o 1. -
BATCo document for Province of British Columbia 20
April 1999