Canada Vape Tax Increase: Higher Vaping Prices Expected

As of July 1, 2023, the Canadian government has implemented a 12 percent increase in the federal vape tax, resulting in higher prices for all vapers across the country. The two most populous provinces, Ontario and Quebec, along with the Northwest Territories and Nunavut, have joined the national government’s “tax partnership” scheme, effectively doubling the tax rate for vapers in these regions.

Federal-Provincial Tax Partnership Attracts More Provinces

The tax partnership, first announced in 2022, allows participating provinces to collect an amount equal to the federal tax. The federal government handles the collection and accounting, making it an attractive option for provinces seeking additional revenue. Four other provinces (Alberta, Manitoba, New Brunswick, and Prince Edward Island) and one territory (Yukon) have already agreed to join the tax scheme on January 1, 2025.

Ontario’s conservative-led government justified its decision to join the tax partnership by claiming it would reduce youth vaping and prevent the alleged gateway to smoking, framing it as a public health win.

Calculating the New Vape Taxes

The federal tax applies to all vape products containing e-liquid, with or without nicotine, and is calculated as follows:

$1.12 per two milliliters for the first 10 mL (or portion thereof) in a sealed container (bottle, disposable, pod, or cartridge)
$1.12 for each additional 10 mL (or portion thereof) in the container

For vapers in Ontario, Quebec, Northwest Territories, and Nunavut, the tax is doubled. The same will apply to Alberta, Manitoba, New Brunswick, Prince Edward Island, and Yukon starting January 1, 2025.

Also Read:
PROVINCIAL VAPING TAXES IN CANADA: CURRENT STATUS AND FUTURE OUTLOOK
VAPE EXCISE TAX IN CANADA AND HOW TO CALCULATE

Impact on Consumers

The tax is assessed to manufacturers when products are imported or sold at wholesale, with the cost typically passed on to customers. As of July 1, new products are taxed at the higher rate, but there is a 90-day period during which products that entered the supply chain before July 1 can be sold at their old tax rates.

Here are some examples of how the new taxes will affect the prices of various vape products:

A 30 mL bottle of e-liquid will cost all Canadians an additional $7.84 in federal tax ($0.84 more than before July 1).
A 5 mL disposable vape will have a federal tax of $3.36.
A package of four refill pods containing less than 2 mL each will have a federal tax of $4.48.

In Ontario, Quebec, Northwest Territories, and Nunavut, the tax for all these products is twice as much.

Provinces with Existing Vape Taxes

While British Columbia, Newfoundland and Labrador, Nova Scotia, and Saskatchewan have not joined the federal partnership program, they already have their own provincial taxes in place. Consumers in these provinces will also pay the new higher federal tax in addition to the existing provincial taxes.

The increased vape taxes in Canada are expected to have a significant impact on consumers, with many vapers facing substantially higher prices for their products. As more provinces join the federal tax partnership, the cost of vaping is likely to continue rising across the country.

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.