Quebec Imposes New Taxes on Vaping Products

In the province of Quebec, Canada, a new provincial consumption tax will be implemented on electronic cigarette products starting in the fall of next year (2024). The tax calculation rules are as follows:

For all e-cigarette products regardless of volume, a tax of $2 CAD (equivalent to approximately 10.14 RMB) will be imposed on every 2ml of e-liquid, with a maximum of 10ml taxable. Any e-liquid exceeding 10ml will not be subject to additional consumption tax.

The current tax policy in Canada mandates that for tobacco products that are equal to or less than 10ml in size, a tax of 1 Canadian dollar is charged for every 2ml. For products larger than 10ml, the first 10ml are taxed at a rate of 2ml to 1 Canadian dollar, and for every additional 10ml, a tax of 1 Canadian dollar is charged.

Starting from the fall of 2024, the province of Quebec will implement a combined consumer tax on tobacco products which will include both federal and provincial taxes (with the latter not conflicting with the former). This combined tax, denoted as T3, will be calculated as the sum of the federal tax (T1) and the provincial tax (T2).

Taking a 50ml bottle of e-liquid as an example:

The calculation results in a total of 9 Canadian dollars (approximately 46 Chinese yuan).

According to the equation T2=((10/2)*2)+40*0, the result is 10 Canadian dollars, which is approximately 50.7 Chinese yuan.

T3 is equivalent to the sum of T1 and T2, which equals 19 CAD (approximately 96.7 CNY).

A study by the University of Waterloo in 2020 has revealed that the province is one of the largest consumers of tobacco in Canada, with over 12% of its population being smokers.

Valerie Gallant, spokesperson for the Canadian Vaping Rights Association (CDVQ), stated that the move by Quebec is intended to make up for revenue losses in tobacco taxes due to a decrease in smoking rates. However, this may backfire as "higher prices for e-cigarettes make it harder for people to successfully quit smoking." It is reported that government tobacco taxes have remained largely unchanged since 1995, with estimates suggesting that tobacco tax revenue will continue to decline through 2022.

According to MTLBlog's report, electronic cigarette users in Quebec have to pay up to 80% tax on the original cost of the product.

Reference:

Quebec has imposed new taxes on vapes due to a decrease in tobacco tax revenue. The state of affairs indicates that the tobacco industry is struggling financially.

The implementation of new taxes in Quebec may result in a significant increase in the cost of vaping, up to 80%.

The smoking prevalence across Canadian provinces