The Harmful Impact of Sin Taxes on E-Cigarettes in Quebec

Dec.15.2022
The Harmful Impact of Sin Taxes on E-Cigarettes in Quebec
Quebec's smoking population is decreasing, with e-cigarettes proving more effective than traditional methods. Taxing e-cigarettes may increase risks and harm small businesses.

Smoke-free Quebec has always been our common goal. The smoking population in Quebec continues to decline, reducing the risk of serious illness caused by combustible tobacco for Quebecers. The Canadian Vaping Association opposes nationwide taxation on e-cigarette products, as this would have unintended consequences and increase risks for young people. E-cigarettes are an effective harm reduction product with a quit rate twice that of patches and gum. This innovative product has contributed to Quebec's economic growth. Tobacco control requires viable solutions, such as using e-cigarettes to help adult smokers quit. Increasing the cost of e-cigarette products, like traditional cigarettes, will not help the country achieve its goal of a smoke-free future.


Electronic cigarettes have the potential to help almost 1.3 million Quebec residents who currently smoke by providing them with a less harmful alternative to combustible tobacco. These products are subject to both provincial and federal regulations, which prohibit sales to minors, require ID for those under 25, feature warning labels about nicotine addiction on their packaging, and limit the use of certain texts and graphics. Candy, soft drink, and cartoon character imagery are prohibited from being used in marketing materials. In Quebec, e-cigarette products come from reliable sources and are subject to rules that are often stricter than those governing other legal substances. The strong regulations implemented by Canada to protect youth will be undermined by the emergence of a large illicit market resulting from punitive taxes.


Throughout the implementation of the federal consumption tax, the Canadian Vaping Association has issued a warning to the federal government that harsh taxation will lead to an increase in smoking, a large illegal market, and weakened protection for young people. With Quebec announcing its intention to join the consumption tax system, Quebecers will be paying nearly double the tax rate. Certain categories of e-cigarette products will become more expensive than traditional cigarettes. The introduction of an e-cigarette tax is meant to achieve health goals, particularly to prevent young people from using e-cigarettes. Levying provincial consumption tax on harm reduction products has a negative impact on Canada's tobacco control strategy, which is aimed at helping Canadians who smoke quit or reduce the harm caused by nicotine addiction.


The Canadian Ministry of Health recently reviewed the Tobacco and Vaping Products Act (TVPA) and suggested that more ongoing public education and awareness efforts should be made to inform young people and non-tobacco users about the health risks associated with vaping. Additionally, the majority of adult smokers are unaware that vaping is less harmful than smoking tobacco products. The ministry suggested launching efforts to communicate the relative risks between smoking and vaping to smokers. The impression given by the imposition of a "sin tax" on vaping is that it is just as harmful as smoking and therefore does not benefit public health. This indirect messaging may discourage smokers from switching to vaping and reinforce misunderstandings about the risks associated with vaping.


Furthermore, without coordination from all provinces, the potential outcome of Quebec's taxation could result in the closure of local small-scale electronic cigarette businesses, while businesses in other provinces and the black market will satisfy demand for electronic cigarette products. "On top of federal taxation, individual provinces imposing punitive tariffs could reach the Laffer peak of local revenue. Such taxes will redirect purchases from in-province resources to online out-of-province suppliers and the black market," said Professor Ian Irvine when discussing Canadian consumption taxes.


CVA has proposed several practical and less harmful solutions to protect adolescents. Education, prevention, and enforcement are the best tools to protect young people from nicotine temptation. With recent regulatory changes, the illegal market for e-cigarette products has grown exponentially. More resources are needed to enforce this market. At present, the prevalence of illegal products makes it convenient for young people as illegal sellers do not check IDs. Imposing high taxes on e-cigarettes will accelerate the growth of this market and repeal years of regulation aimed at protecting young people.


Nova Scotia is the first province to introduce both an e-cigarette tax and flavor ban. These measures, combined, have decimated the e-cigarette industry in Nova Scotia, with cigarette sales increasing by 5.6%. The ban on flavors ensures the existence of a black market and increases cross-province sales. Professor Irvine of Concordia explains, "E-cigarettes and combustible cigarettes are substitutes, so keeping taxes on low-risk products low is crucial in encouraging smokers to switch to low-risk products." The Quebec government must consider the potential return of combustible tobacco and the increase in enforcement demands after consumption taxes. "Tobacco and nicotine taxation are a joint jurisdiction, and if provinces decide to match federal taxation, the industry will shrink significantly. The best estimate is $396 million in additional taxes and $609 million in supplier revenue loss," he estimates. This will have a devastating impact on Quebec's small e-cigarette businesses and public health.


We need this data so that Canadians and regulatory agencies can fully understand the impact of these policies. Research on three U.S. states with similar policies found that bans on flavored tobacco and taxes led to an increase in smoking rates among both adults and youth populations.



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.

Special Report | Altria Subsidiaries Sue FDA to Vacate 2021 PMTA Rule as Agency Moves to Speed Reviews
Special Report | Altria Subsidiaries Sue FDA to Vacate 2021 PMTA Rule as Agency Moves to Speed Reviews
2Firsts reviewed the original federal court complaint filed by Altria subsidiaries Helix Innovations and NJOY on Sept. 2 challenging FDA’s 2021 PMTA rule. The lawsuit questions whether FDA’s review process complies with the Tobacco Control Act’s 180-day timeline, even as the agency moves to accelerate PMTA reviews and issues more marketing orders. Drawing on the complaint, FDA records, government audits and recent court rulings, 2Firsts examines the legal arguments, supporting evidence and potential implications for the U.S. tobacco review system.
Regulations
Sep.03
Philip Morris Malaysia Again Meets Religious Authority Over Cigarette Alternatives as Perlis Mufti Responds on Halal Criteria
Philip Morris Malaysia Again Meets Religious Authority Over Cigarette Alternatives as Perlis Mufti Responds on Halal Criteria
Philip Morris Malaysia Managing Director Naeem Shahab Khan met Perlis Mufti Mohd Asri Zainul Abidin on September 17 and presented the company's shift from conventional cigarettes toward alternative products. The mufti said a product could be considered halal if it is clean, its side effects are not harmful or can be controlled, and it does not involve excessive waste. His remarks did not mention IQOS or any other specific PMI product and did not amount to a new product-specific religious ruling. It was at least the second publicly reported engagement between Philip Morris Malaysia and a Malaysian religious institution over cigarette alternatives within six months.
Regulations
Sep.18 by 2Firsts Perspectives
Kelly White Bets on Female Consumers as Nicotine Pouch Competition Intensifies | 2Firsts Interview
Kelly White Bets on Female Consumers as Nicotine Pouch Competition Intensifies | 2Firsts Interview
Swedish nicotine pouch brand Kelly White is building its strategy around adult female consumers. Founder and CEO Sophia Wilsby told 2Firsts that women accounted for around 70% of the brand’s repeat customers on HAYPP in Sweden in 2025. The interview explores female consumer segmentation, product and design differentiation, gender stereotypes, packaging regulation, and how independent brands can compete with global players such as ZYN and VELO while considering funding, partnerships and future ownership options.
Business
Sep.24
Product | JTI Philippines Expands Nordic Spirit Nicotine Pouch Portfolio With Dark Pop and Red Frost
Product | JTI Philippines Expands Nordic Spirit Nicotine Pouch Portfolio With Dark Pop and Red Frost
JTI Philippines has expanded the Nordic Spirit nicotine pouch portfolio in the Philippines with two new variants, Dark Pop and Red Frost. Both products maintain the brand’s tobacco-free nicotine pouch positioning, with Dark Pop featuring a fizzy cola profile with citrus and sweet notes, while Red Frost combines cool mint with sweet red berry flavors. The two variants are now available through Philippine online retail channels.
Aug.18
NAS 2026 | Cliff Douglas: Risk Continuum Should Play a Central Role in Tobacco Policy
NAS 2026 | Cliff Douglas: Risk Continuum Should Play a Central Role in Tobacco Policy
Cliff Douglas, a veteran U.S. tobacco-control and public health policy figure, told NAS 2026 that the “continuum of risk” should play a central role in tobacco policy. He called for clearer market pathways, stronger risk communication, differentiated regulation and enforcement, and said possible FDA reforms to PMTA reviews could be a “welcome correction” if they create a more efficient, predictable route for scientifically substantiated lower-risk products. Read 2Firsts’ on-site coverage.
Sep.26
Germany's Four-Year Tobacco Tax Plan Heads to Parliament as BAT, JTI and PMI Push for Changes
Germany's Four-Year Tobacco Tax Plan Heads to Parliament as BAT, JTI and PMI Push for Changes
Germany's parliament is scheduled to hold a first reading of amendments to the Tobacco Tax Act on September 24. The government plans annual tax increases from 2027 through 2030 covering cigarettes, heated tobacco, vaping liquids and other categories. It expects the reform to generate €756 million in additional revenue in 2027, rising to €3.589 billion in additional annual revenue by 2030. Ahead of the parliamentary debate, the German Association of the Tobacco Industry and Novel Products, or BVTE, launched the "Tabaksteuer mit Augenmaß" campaign backed by BAT, JTI, Philip Morris, Reemtsma and wholesale and retail groups.
Sep.23