Economic Costs

In 1993 the World Bank estimated that tobacco use cost the global economy $200 billion (US) each year--$70 billion of this in the developing world. In 2002, tobacco use cost the Canadian economy an estimated $17 billion, including $1.8 billion in Alberta.

Costs to society

While Canadian smokers pay their way for direct governmental expenses such as health care ($4.4 billion in 2002), all Canadians are forced to absorb costs such as worker absenteeism, fires, and lost income due to premature death. The 36,125 fires caused by smokers cost Canadians $433 million in property damage over a 10-year period (1988-1997). In 1997 the Conference Board of Canada said it cost employers about $2,565 more per year to employ a smoker than to employ a non-smoker.

Costs to smokers

Smokers pay higher life insurance premiums and pay billions of dollars in tobacco taxes. Smokers pay the costs of burnt holes in furniture, clothes, car interiors and, sometimes, fires. Then there's the cost of the cigarettes themselves. In Alberta in 2005, a smoker who smokes a pack a day spends almost $3,650 each year on cigarettes, based on an average price of $10 a pack.

The bottom line

Tobacco reduction makes economic sense. According to the World Bank, some of the most effective tobacco reduction measures are also the most cost-effective. These include raising tobacco taxes, restricting tobacco advertising and promotions, restricting smoking in public places and workplaces, and providing cessation information and treatment programs.

Quick Facts

• Tobacco use costs society: direct and indirect health-care costs, lost income due to premature death, disability, worker absenteeism, reduced productivity, fire damage and tobacco subsidies.
• The World Bank estimates that tobacco use costs the global economy $200 billion (US) each year--$70 billion in the developing world.
• In 2002, tobacco use cost Canadians about $17 billion, including $4.4 billion in direct health-care costs.
• In 2002, tobacco use cost Albertans about $1.8 billion, including $470.6 million in direct health-care costs.
• Tobacco taxation is one of the best ways to cut both smoking rates and economic costs. Higher taxes make some smokers quit, and prevent some non-smokers from starting.
• According to the World Bank, a 10% price increase on tobacco products reduces demand by 4%.