What You Should Know About Canada's New Federal Vape Tax

On April 7, 2022, a federal vape tax was proposed by the Canadian government. The tax is part of the Sales and Excise Tax Measures and will come into effect at the beginning of October.  This article will discuss what the tax is, and what it means for the vaping community.


The Proposed Tax

An excise tax is a legislated tax imposed on specific goods, such as alcohol, tobacco, and cannabis products. The imposition of excise duties on vaping products was first proposed by the Canadian government in 2021.  With the implementation of the new excise task framework, all vaping products containing nicotine will be taxed and require federal excise duty stamps. The official statement reads, “the excise duty applies to vaping substances that are manufactured in Canada or imported and that are intended for use in a vaping device in Canada.”  

As of October 1, 2022 the tax is $1 per 2 mL for the first 10 mL in any sealed container (bottle, pod, etc.), and $1 per 10 mL for additional liquid in the container. That would add $7 to the price of a 30 mL bottle of e-liquid, $10 to a 60 mL bottle, and $14 to a 100 mL bottle. A 4-pack of 1 mL pods would be taxed at $4, because each sealed pod is taxed separately and the minimum tax on any individual container is $1.

Retailers would be allowed to sell untaxed products that are in inventory on Oct. 1 until Jan. 1, 2023.

The proposed tax rules would allow Canadian residents who travel out of the country for more than 48 hours to bring up to 10 vaping products containing a total of no more than 120 mL of e-liquid back into Canada without paying a duty.


Implications of the Tax

The tax is being implemented at the federal level, but it opens the door to potential further taxation at the level of individual provinces and territories. The tax proposal states the goal of implementing an excise tax is to curtail harmful consumption of tobacco products. However, a study published in the Journal of Risk and Uncertainty, found the taxation of vaping products results in increased cigarette use. As a result, taxation of vaping products is counterproductive to tobacco harm reduction because vaping does not expose the user to the thousands of harmful chemicals and toxins found in cigarettes.

Along with being the safer option, it is important for vapers to note that even with the new excise tax, vaping is still more cost effective than smoking traditional cigarettes. Additionally, the tax is only applicable to products that contain nicotine and will not be charged on hardware, such as coils.

Consider stocking up on your favourite e-liquids before the implementation of the tax on October 1st. You can shop Vape Wave products HERE.