Canada to Impose Sales Tax on E-Cigarettes

Dec.06.2022
Canada to impose consumption tax on e-cigarettes, raising concerns over affordability and impact on youth vaping.

Previously, the Canadian government announced that it will impose a consumption tax on electronic cigarette products, which will take effect on October 1 of this year. All electronic cigarette liquids produced after this date will be labelled with a new tag. Currently, there is a transition period and the taxes will be formally collected at the beginning of 2023.


The tax rate is determined in milliliters. The new tax rates are as follows:


Every 30 milliliters costs 7 Canadian dollars (about 37 Chinese yuan).


Every 60 mL costs 10 Canadian dollars (approximately 53 Chinese yuan).


Every 120mL costs CAD16 (approximately CNY84).


In addition to federal taxes, provinces have the option to impose their own taxes, with rates varying by each province and territory. This tax will be applied to all new electronic cigarette products, meaning consumers will have to pay higher prices to purchase e-cigarettes.


In response to this, some consumers expressed in an interview with Digital Journal that a major reason why they initially chose electronic cigarettes was because they were much cheaper than tobacco cigarettes. If the price of electronic cigarettes were equivalent to that of traditional tobacco cigarettes, they would prefer to switch back to paper cigarettes.


Has the price of electronic cigarettes increased after the implementation of the consumption tax compared to traditional cigarettes? It is understood that the average price for 200 cigarettes in Canada is 112.06 Canadian dollars (approximately 587 yuan), while the same price can purchase 30mL of electronic cigarette oil.


In other words, currently, even with the addition of a consumption tax, using electronic cigarettes is still cheaper than smoking traditional cigarettes.


However, some industry insiders have stated that as the price of electronic cigarettes continues to rise, user loyalty may decrease, presenting a challenge for e-cigarette businesses to address.


Doug Roth, CEO of the Heart and Stroke Foundation of Canada, believes that an e-cigarette tax is a preventative measure by the federal government aimed at reducing youth use of such products. "The increased cost of e-cigarette products would make it harder for young people to afford them. Youth should be protected from the harms of these products, and increasing taxes is one of the most effective ways to achieve this goal," he stated.


It is understood that this is not Canada's first preventive regulation targeting electronic cigarettes. In 2020, Canada restricted e-cigarette advertisements and banned them from being placed in places where minors can see them. Additionally, the provinces of Nova Scotia, Prince Edward Island, New Brunswick, and the Northwest Territories have all banned the sale of flavored e-cigarettes and this ban will be implemented nationwide.


Electronic cigarette users have expressed dissatisfaction with a series of anti-smoking regulations. According to a public opinion poll conducted by Delphi Polling & Consulting in Quebec City, the majority of citizens believe that electronic cigarettes are relatively harmless and are the best aid for quitting smoking. As a result, they believe that support should be given to those who wish to quit smoking through the use of electronic cigarettes.


Some are optimistic that these measures will benefit the electronic cigarette market by regulating it, helping to eliminate low-quality businesses, and better protecting the health of young people, enabling the industry to develop towards a healthy and stable new stage.


Reference:


The Heart & Stroke foundation has expressed its approval for health-related initiatives included in the Canadian federal budget for 2022.


A vape shop in Winnipeg is cautioning customers about an imminent excise tax on e-liquids used in vaping. The tax is expected to affect both manufacturers and vendors of vaping products in Canada. The warning comes amidst increasing concerns by health professionals about the potential health hazards posed by vaping.


Text by Zhu Lihong



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