Canada: First federal tax increases on electronic cigarettes

As part of the budget vote, Canada introduced a first federal tax on vaping products in its 2022 budget. This initiative was welcomed by various organizations fighting against tobacco and nicotine products, such as the Canadian Cancer Society (CCS) and the Quebec Coalition for Tobacco Control, which congratulated the government for mobilizing a public health tool intended to dissuade younger generations from consuming e-cigarettes.[1].

The vaping tax will come into effect starting in October 2022, and will allow Canadian provinces and territories to apply a tax that will be added to the federal tax, with a view to generating additional revenue. Thus, the new federal framework will impose a tax of one dollar per 2 ml for containers of less than 10 ml. For containers of more than 10 ml, a tax of five dollars will be applied, and beyond that, a tax of one dollar for each additional 10 ml is required.[2].

A sharp increase in electronic cigarettes observed in Canada

This new tax comes in response to growing concern from governments about the increase in the use of new nicotine products among the younger generation of Canadians. According to the Canadian Student Tobacco, Alcohol and Drugs Survey, e-cigarette use during the school year among young people aged 10 to 12 increased from 9% in 2014-2015 to 29% in 2018-2019.[3].

Quebec confirms its delay in the fight against tobacco and nicotine products

Six Canadian provinces have so far announced or introduced a tax on vaping products, including British Columbia, Nova Scotia, Newfoundland and Labrador, Saskatchewan, Alberta and Prince Edward Island. The Quebec government has not yet taken any action on the issue of taxation, either by introducing its own tax or by participating in the federal system. However, according to the Institut de la statistique du Québec, e-cigarettes are widely used by younger generations in Quebec: in a 2020 survey, 18% of 15 to 17 year-olds reported vaping in the last thirty days.[4]. Quebec is also characterized by a no tax increases on tobacco products : In March 2022, the government had decided not to increase taxes on tobacco products for the eighth consecutive year, further delaying the province in terms of public health. According to public health organizations, the strong influence of the tobacco industry can partly explain this lack of tax strategy.

FT

[1] Canadian Cancer Society, Canadian Cancer Society supports new e-cigarette tax announced in federal budget as key measure to reduce youth vaping, 07/04/2022, (accessed 12/04/2022)

[2] Canada, Budget 2022, (accessed 04/12/2022)

[3] Cision, Federal Budget 2022-2023 - New major tax on vaping liquids, 07/04/2022, (accessed 12/04/2022)

[4] Quebec survey on tobacco and vaping products, Consumption of tobacco and vaping products in Quebec in 2020, (accessed 04/12/2022)