Canada proposes federal tax on e-cigarette products

Apr.08.2022
Canada proposes first federal tax on e-cigarette products, effective October 1st. Tax rates are significant.

According to reports from international media, the Canadian government has proposed its first federal tax on electronic cigarette products in its 2022 budget. As part of the proposed federal budget announced on Thursday, the tax on electronic cigarettes will come into effect on October 1st – if formally passed through parliament.

 

The proposed tax is extensive and includes the option for Canadian provinces to bear the same amount of federal taxes as assessed by the federal government. The central government is encouraging provinces and territories to adopt the same tax scheme which will be managed by federal tax authorities.

 

The proposed tax on Thursday only applies to products containing nicotine, including pod-style and cartridge-style refills, disposable e-cigarettes, and bottled e-liquids. The tax appears to include nicotine base sold for DIY purposes. It does not apply to hardware that does not contain e-juice.

 

Exclude vapers and vape shops from pricing the market they created.

 

The tax for the first 10 milliliters of any sealed container (bottle, jar, etc.) is $1 for every 2 milliliters. Additional liquid in the container is taxed $1 for every 10 milliliters. As a result, a 30-milliliter bottle of e-liquid would see a price increase of $7, a 60-milliliter bottle would increase by $10, and a 100-milliliter bottle would increase by $14. The tax for a pack of four 1-milliliter pods would be $4, as each individual pod is taxed separately. The minimum tax for any single container is $1.

 

The effective tax rate on bottled e-cigarette liquid may be higher than 100% of the retail price. The situation may be even worse for home brewing equipment, where the tax on a one liter bottle of DIY nicotine is $104.

 

For Canadians residing in provinces and territories taking part in the proposed "coordinated electronic cigarette tax system," the tax burden will double. The proposal is attractive to provinces as the federal government will handle all accounting and simply send each participating province a cheque for the tax revenue collected. Several provinces in Canada already have existing taxes in place.

 

Retailers will be allowed to sell tax-free products from their inventory between October 1st and January 1st, 2023.

 

Proposed tax regulations will allow Canadian residents who have been traveling abroad for more than 48 hours to bring back up to 10 electronic cigarette products containing no more than 120 milliliters of e-liquid without paying duties.

 

(Source: vaping360)

 

Canada has proposed a new federal tax on vaping products, which has been described as "brutal" by some. The tax would result in a 50% increase in the retail price of vaping products and is part of the Canadian government's effort to reduce vaping among young people and protect public health. The proposed tax has caused concern among vaping advocates and businesses, who argue that it will harm adult smokers who are trying to quit and lead to job losses in the vaping industry. The tax is set to take effect on January 1, 2022, pending approval by the Canadian parliament.

 


Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Reynolds Puts Nearly 183,000 U.S. Contracted Outlets Under Age-Verification Rules, Covering 94% of Volume — Can It Shift an Unauthorized Vape Market?
Reynolds Puts Nearly 183,000 U.S. Contracted Outlets Under Age-Verification Rules, Covering 94% of Volume — Can It Shift an Unauthorized Vape Market?
Reynolds American says nearly 183,000 U.S. retail outlets are under contract, with its Retail Marketing Plan Contract covering about 94% of company volume and requiring point-of-sale age verification. The company combines those contracts with We Card, TruAge, NACS-linked infrastructure and POS integration, while enhanced Vuse Pro retail rules add ID scanning, purchase limits and stronger underage-sales accountability. The initial Vuse Pro rollout targets about 50,000 stores. The system is taking shape as unauthorized vapor products remain dominant in parts of the U.S. market: a 2026 study estimated they accounted for 69.4% of tracked brick-and-mortar e-cigarette dollar sales in December 2025.
Special Report
Oct.15
South Korea Extends Vape Rules to Unmanned Stores After Bringing Synthetic Nicotine Under Tobacco Law
South Korea Extends Vape Rules to Unmanned Stores After Bringing Synthetic Nicotine Under Tobacco Law
South Korea's Ministry of Gender Equality and Family said on September 14 that it plans to designate unmanned e-cigarette stores as businesses where minors are prohibited from entering or working. Operators would be required to verify customers' ages and display notices restricting access by minors. The proposal is open for public comment through October 6. The move follows an April expansion of South Korea's statutory tobacco definition that brought products made with natural or synthetic nicotine under the Tobacco Business Act. Nicotine-free liquids and products using nicotine analogues such as 6-methylnicotine, however, remain an emerging regulatory issue.
Sep.21
Beyond IQOS ILUMA, PMI Expands Lower-Priced BONDS Heated Tobacco Platform: Seven Markets Added in Q3, With Rollouts in Japan, Europe and North Africa
Beyond IQOS ILUMA, PMI Expands Lower-Priced BONDS Heated Tobacco Platform: Seven Markets Added in Q3, With Rollouts in Japan, Europe and North Africa
Philip Morris International (PMI) is expanding the international footprint of BONDS by IQOS, its lower-priced heated tobacco platform. The company's third-quarter 2026 SEC filing shows that BONDS devices and BLENDS tobacco sticks were available in 15 markets at the end of September, up from eight at the end of June. In November, PMI announced plans to extend sales from three to 17 Japanese prefectures and introduced BONDS in Spain and Morocco. The platform uses ROUNDHEAT external heating technology and proprietary tobacco sticks, separate from the IQOS ILUMA system. In Japan, BONDS retails for ¥2,980, approximately 25% below ILUMA i ONE, while BLENDS costs ¥570 per pack. PMI management says BONDS targets cigarette smokers who have not adopted heated tobacco. Separate sales and revenue figures remain undisclosed.
company
Nov.06
PMI Expands Its Second Global and First Asian Business Services Hub in the Philippines, Serving 160 Markets and Scaling Up AI Capabilities
PMI Expands Its Second Global and First Asian Business Services Hub in the Philippines, Serving 160 Markets and Scaling Up AI Capabilities
Philip Morris International's PMI Business Solutions Philippines has expanded its global business services hub in Makati and plans to add more than 80 positions. Established in 2021 primarily to provide finance and IT support to about 20 markets, the center now employs 519 professionals delivering roughly 600 services across 160 markets. Its functions now span finance, human resources, IT, commercial operations, data analytics, supply chain and project management. PMI says the hub's next phase will focus on AI-enabled and higher-value work. The company did not disclose the size or investment cost of the expansion.
Sep.24
Altria Showcases Ploom, Marlboro Heated Tobacco Sticks and Non-Nicotine Energy Products at NACS Show 2026
Altria Showcases Ploom, Marlboro Heated Tobacco Sticks and Non-Nicotine Energy Products at NACS Show 2026
At the 2026 NACS Show, Altria displayed Ploom devices alongside imagery of Marlboro-branded heated tobacco sticks, while also featuring RIOT Energy and Proper Wild non-nicotine products. The booth showcased on! PLUS nicotine pouches, including 12 mg variants not listed among FDA-authorized products as of October 9, and NJOY e-cigarettes. Altria also presented convenience-store traffic figures highlighting its retail presence. 2Firsts examines the company's expanded product portfolio, non-nicotine business activities and the regulatory status of products displayed at the show.
EXPO
Oct.10
Italy Proposes Earlier Vape and HTP Tax Hikes, New Rules for E-Liquid Pricing, Exclusive Deals and Distribution
Italy Proposes Earlier Vape and HTP Tax Hikes, New Rules for E-Liquid Pricing, Exclusive Deals and Distribution
Italy's proposed 2027–2029 budget would bring forward scheduled tax increases for e-cigarette liquids and heated tobacco products from January 1, 2028, to July 1, 2027. The consumption tax coefficient for nicotine-containing e-liquids would rise from 20% to 22%, that for nicotine-free liquids and applicable flavorings from 15% to 17%, and the heated-tobacco coefficient from 41% to 42%. The bill would also introduce official retail price schedules for e-liquids, restrict exclusive agreements between retailers and suppliers, and limit single-brand-dominated displays, sales incentives and bundled offers. Importing, authorized warehousing and retailer sourcing arrangements would also change. The proposals remain subject to parliamentary approval and subsequent implementing regulations.
Regulations
Nov.04