This thesis is an account of the response of the cigarette manufacturers to threats to their interests arising from the smoking and health issue. The purpose of the paper is to provide a case study of a Canadian interest group, and specifically, of a Canadian business group. The tobacco industry offers advantages as a subject because of the availability of published material on numerous facets of the smoking and health controversy, including a year of legislative hearings. As a case study, the paper is essentially descriptive rather than theoretical. It is divided into four chapters. The first chapter deals with the characteristics and strategic position of the industry, including the nature of the forces in opposition. The second chapter describes the government institutions concerned with the smoking and health issue and the access of the industry to these institutions. The third chapter describes the evolution of governmental policy and evaluates the effectiveness of the pressures, direct and indirect, brought to bear by the industry. The concluding chapter places the pattern of interaction between the industry and the government in a comparative perspective and suggests a categorization of the Canadian experience. It is hoped by this approach, rather than a chronological description, to describe with some thoroughness the forms of pressure or influence exerted by the industry on the policy-makers concerned with the issue in question. Three conclusions derive from the account. First, the main focus of activity was at the departmental level, though the Commons played a substantial role. Second, the industry operated from a position of strength by virtue of its economic position and the dependence of other groups on its welfare. Pressures from this position were a major force in preventing abrupt governmental interference with its commercial activities, despite the seriousness of the health issue. Third, the success and setbacks of the American tobacco industry influenced the course of events in Canada. It is suggested that these conclusions may have some general application to Canadian interest group theory, though their main reference is to the case study conducted. The study draws heavily on the hearings of the Standing Committee on Health, Welfare and Social Affairs, publications of the Department of National Health and Welfare, publications of the industry, and Hansard. Officials in Ottawa provided information on a number of developments. Reports in the Globe and Mail and the Financial Post also proved valuable. Where appropriate, reference is made to studies of other Canadian interest groups and observations from interest group theory in general. The structure of the paper is to be a large extent inspired by the introductory chapter in Harry Eckstein's Pressure Group Politics, which emphasizes the manifold nature of pressure and the variety of factors determining its form and direction. / Arts, Faculty of / Political Science, Department of / Graduate

This study was undertaken to achieve three major objectives: 1. to estimate an econometric structure-profitability model for Canadian food, beverages and tobacco processing industries; 2. to estimate a structure-price model of the sector to compare with the profit model; and 3. to make inferences about the performance of the sector, with reference to market power and industry efficiency. The above objectives were accomplished by comparing empirical regression results of the two models by using the following approach. First, the statistical significance of the estimated coefficients was used to determine which factors should be considered of importance in explaining performance. Secondly, the signs on the estimated coefficients were used to determine the direction of the influence of market structure on performance. Lastly, a comparison of the size and statistical significance of the difference in the respective coefficients was used to determine which of the two performance indexes (profitability and prices) is most affected by market structure. From the study four broad conclusions were arrived at. Seller concentration and advertising do have an increasing effect on profitability, but this influence does not derive from market power (price increases). Instead, increases in these factors appear to promote price competition. However, tariff protection has an increasing effect on both profitability and prices. Furthermore, the net effect of tariffs is significantly larger on prices than on profitability. Industry growth and market isolation factors have an increasing effect on profitabilty. But they have no significant influence on relative prices. Exports have a decreasing effect on profitability and prices. Increases in input prices may lead to increases in ouput prices. Two broad implications can be drawn from the above results. First, price competition and industry efficiency can be enhanced by (either condoning or encouraging) high market shares, advertising, exports and industry growth. Secondly, although tariffs can increase industry profitability, they may also lead to relatively larger increases in domestic output prices. Similarly, changes in input prices may lead to increases in output prices. Therefore, high tariffs and input prices may serve as barriers to competition, and allow inefficiency to persist in an industry. / Land and Food Systems, Faculty of / Graduate