Quebec renounces raising tobacco taxes for the eighth consecutive year

For the eighth consecutive year, Quebec has decided not to increase taxes on tobacco products, in a context of budget deficit and weakening of its health system. Public health organizations share their concern, as Quebec is further falling behind in the fight against smoking.

Flory Doucas, spokesperson for the Quebec Coalition for Tobacco Control, denounced the "staggering" nature of the government's decision not to increase taxes on tobacco products. As she points out, tax policy remains the most effective measure to stem the tobacco epidemic, which is responsible for 13,000 deaths per year in Quebec. Beyond its effectiveness, tax increases are also a particularly cost-effective measure, and help reduce pressure on hospitals, while the Covid-19 pandemic continues to weigh on the health system.[1].

Illicit trade has been stable for over ten years

The argument of the threat of an increase in illicit trade, widely used by the tobacco industry, is not, according to the Coalition, an admissible objection to justify the absence of a tax policy. Since 2011, the level of contraband has in fact stabilized at a relatively limited level, around 11 to 12% of the Quebec market, according to official estimates. In 2014, the latest tax increases on tobacco products did not result in an increase in illicit trade.

Quebec, Canada's bad student when it comes to tobacco product taxation

The vote on this eighth budget accentuates Quebec's lag compared to other Canadian provinces in the fight against smoking. In March 2022, a carton of 200 cigarettes is taxed at 29.80 Canadian dollars (21.50 euros), or 35 dollars less than the average of the other twelve provinces. Ontario, the second Canadian province with the most permissive taxation on tobacco products, itself taxes a carton 15 dollars more than Quebec. At the same time, four Canadian provinces have taxation levels above 70 dollars per carton, including the Northwest Territories, which applies a tax of 77.91 dollars for 200 cigarettes (56.18 euros), a level more than 160% higher than the taxation applied in Quebec.

A missed opportunity to generate CAD 165 million in additional taxes

According to the Coalition, an increase of seven dollars per carton, or an additional 70 cents per pack, would have reduced the number of smokers in Quebec by 18,000, while generating an additional $165 million in taxes in the first year. Furthermore, an increase in tobacco taxes of 2% per year would result in revenue of one billion Canadian dollars over five years. The Coalition also points out that this new revenue could be reinvested in smoking cessation assistance programs, as well as to restore the budget dedicated to the fight against smoking, which, "like the public health budget, continues to crumble."

The influence of the tobacco industry on public policies in Quebec

Finally, the Coalition deplores the strong influence of tobacco industry lobbying in Quebec public policies, which may partly explain the absence of an increase in tobacco taxes. The predominance of manufacturers' influence over that of public health is all the more questionable since increasing tobacco taxes, in addition to being virtuous on all levels, is a particularly popular measure, since it is supported by 78% of the Quebec population. Although no tax increase has been decided for eight years, the prices of tobacco products have nevertheless increased, due to discreet price increases decided by manufacturers. This strategy has been largely profitable for the tobacco industry, which saw its revenues increase by more than 16% between 2014 and 2019.

FT

[1] Quebec Coalition for Tobacco Control, Eighth budget without increase in tobacco tax!, March 22, 2022, (accessed 03/23/2022)