Canadian Yukon Government Considers Tax Measures for E-Cigarettes

According to a report by Whitehorse Star on March 11, the government of Yukon Territory in Canada is considering implementing tax-related measures to address the increase in e-cigarette use and to reduce the number of lung diseases related to e-cigarettes.

Last Thursday (March 7), the government submitted the "Coordinated e-cigarette Product Tax Agreement Act" to the legislature and stated that implementing e-cigarette tax policies coordinated with the federal government will help achieve the goal of reducing youth e-cigarette use statewide.

If the legislation is passed, the government will sign an agreement with the federal government that is expected to double the current federal tax on e-cigarette products sold by the Yukon government, while also allowing the government to receive 50% of the tax revenue in the region. If the legislation passes this spring, the territory is projected to receive $115,000 through a new e-cigarette transfer agreement in 2024-2025. With full implementation by 2026-2027, the territory could receive approximately $780,000 in federal e-cigarette transfer funds.

As part of the agreement, the Yukon Territory will not impose its own tax on these products. If approved, the new tax measure could be implemented as early as January 1, 2025.

Federal tax is comprised of regular federal tax and additional tax on e-cigarette products. Once implemented, the tax rate for the first 10 milliliters or less of e-cigarette liquid is $2, and any amount exceeding that will be taxed at $2 per 10 milliliters.