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.

UK Reform Party Proposes Cap of 1,000 Vape Shops Under Plan to Tighten Retail Controls
UK Reform Party Proposes Cap of 1,000 Vape Shops Under Plan to Tighten Retail Controls
The UK Reform Party has proposed limiting the number of dedicated vape shops in the country to around 1,000 as part of a plan to tighten oversight of vape retail channels. The proposal was put forward by Reform UK deputy leader and MP Lee Anderson. The plan remains a political proposal and has not become UK government policy, with no detailed legislation, implementation timeline or allocation rules announced.
Aug.10
China’s Jiangsu Tobacco Monopoly Bureau and Drug Regulator Target Illegal Vape Sales Disguised as Medical Devices, Define Six Violations
China’s Jiangsu Tobacco Monopoly Bureau and Drug Regulator Target Illegal Vape Sales Disguised as Medical Devices, Define Six Violations
China’s Jiangsu Tobacco Monopoly Bureau and Jiangsu Provincial Medical Products Administration have issued a joint notice targeting illegal production and sales of vape products disguised as medical devices. The notice identifies six categories of violations, including obtaining medical licenses through false materials, misusing medical device credentials, expanding production beyond approved scopes, and using medical device-related online platforms to promote or sell vape products. The action is based on China’s tobacco and medical device regulations and aims to strengthen vape oversight and consumer protection.
Aug.04
JUUL2 Sued Within a Week of FDA Authorization as AJ Marketing Alleges Infringement of Programmable Vape Patent
JUUL2 Sued Within a Week of FDA Authorization as AJ Marketing Alleges Infringement of Programmable Vape Patent
Less than a week after JUUL2 received U.S. FDA marketing authorization on August 28, 2026, JUUL Labs was sued for patent infringement in federal court in Delaware. AJ Marketing LLC filed the complaint on September 3, alleging that both JUUL 1 and JUUL2 infringe U.S. Patent No. 8,851,068 B2. The patent covers aspects of programmable electronic vaporization devices, including controls over dose delivery, usage frequency and operating parameters. The plaintiff is seeking reasonable royalties and ongoing royalties tied to the remaining life of the patent. JUUL has not yet publicly responded to the case.
Sep.10
Research | Swedish Study Finds Oral Lesions in 79% of Examined Nicotine Pouch Users, With Distinct Tissue Responses
Research | Swedish Study Finds Oral Lesions in 79% of Examined Nicotine Pouch Users, With Distinct Tissue Responses
A new Swedish study found oral mucosal lesions in 79% of examined nicotine pouch users and 89% of tobacco-derived snus users, with different tissue-response patterns between the two categories. For manufacturers and regulators, the findings shift attention toward product formulation, flavouring, pouch materials and local oral exposure, not only whether a product contains tobacco. The study found no higher prevalence of caries or periodontal disease, but it could not establish causality, long-term outcomes or differences between individual products or designs.
Special Report
Jul.27
BAT Calls for Retailer Input in Future Nicotine Regulations
BAT Calls for Retailer Input in Future Nicotine Regulations
British American Tobacco (BAT) has called for stronger retailer involvement in shaping future nicotine product regulations in the UK, arguing that frontline market feedback should be considered during policy development. BAT said retailers provide direct insight into consumer behavior, market changes and regulatory implementation challenges. The comments come as the UK nicotine market undergoes regulatory changes, including the disposable vape ban, Vaping Products Duty and efforts to address illicit vape sales.
Jul.29
Why AIRSCREAM Built its European Production Hub for Regulated Market Growth
Why AIRSCREAM Built its European Production Hub for Regulated Market Growth
AIRSCREAM’s production hub in the Czech Republic brings nicotine pouch manufacturing, e-liquid bottling, product documentation, warehousing and international logistics into one operation, giving brands and commercial partners a practical platform from which to launch, expand and enter new markets.
Market
Sep.16 by 2Firsts Perspectives