P"/LJB
lst February, 10S4
Ncte to : Mr.
%1 r.
fir.
r.
Mr.
mr.
E-A-A-
n..T.
B.:;.
!'.W.
T.j.
Bruell
Pritcbard
Dramley
Crichtcn
Marloram
Tice
TC-BACCC TA-XATICN EXERCISE
We have recently received from IMASCO, documents
prepared by Peat
marwick and Partners, for the Canadian Tobacco
Industry on
taxation and Drice elasticity.
The documents ccmprise:-
1. Economic imcact of the Tobacco Industry in
Canada for 1982:
2. -1re impacts of the Canadian Tax System on
Tobacco Products;
3. The Price E-Elasticity of Demand for
Cicarettes.
-he documentation was civen to the ?ederal
Minister of Finance
and also to the !Iiinisters of Finance of t"he
fivc- Provinces that
currently have a fully indexed system of tobacco
products
taxation. irnrerial Tobacco Limited have currently
'?ia,~ a c~-rtain
degree of success in that the two zrcvinces which
were scheduled
for a tax increase in early January have
announced, instea2 o-! an
increase, a very small tobacco tax reduction. The
principal test
o'E the Canadiar stratecy wi I! come in t1he forri
c-' tl-e Federal
BuOaet, which is due in late Winter or early
Spring. IMASCO are
looking -for a na4or chance in the legislation,
not*rin,7 less than
th-2 removal of the indexation of Federal tobacco
taxes to the
Tobacco Price index.
Given the importance of this issue to cur
Opcrat4ng Group, you
may feel that the Canadian exercise is of some
interest to your
respective territories. If so, rather than provide
you with a
precis of the documentation, I would be happy to
supply you with
copies of the documentation.
H.A. Vorini
Copies to; Mr. j.A.B. Kellagher
'k"r. R.L.O. Zly
Mr. Z.A. Knight
CZ)
NJ
BATCo document for Province of BritiSh Columbia 20
April 1999