Ebene Magazine – New taxes on vaping products, tobacco proposed in federal budget


Phil Hahn
CTVNews.ca producer


It will be more expensive for Canadians who smoke cigarettes and vape if the 2021 federal budget includes proposals for further taxation of tobacco and vaping products such as e-cigarettes.

The 2021 budget heralds the federal government’s intention to introduce a « new tax framework » to impose excise taxes on vaping products, which would begin in 2022 when the budget is passed. An excise tax, also known as a sin tax, is a tax levied on goods such as tobacco products, wine, and beer.

The budget document indicates that tariffs can not only increase revenue, but can also be « an effective means of reducing the harmful consumption of these products ». The government cites a survey by Health Canada that shows that the use of products like e-cigarettes among Canadian schoolchildren has doubled since 2018.

« Vaping with nicotine carries risks, especially for young people, » says the budget document. « Nicotine is highly addictive, can impair memory and concentration, and is known to alter brain development in teenagers. »

The new tariff would apply to steam liquids manufactured or imported in Canada intended for use in a steam product in Canada. The obligation applies regardless of whether the liquids contain nicotine or not. Cannabis-based vaping products are exempt as they are already subject to cannabis excise duties.

The scaffolding would charge a single flat rate for every 10 ml of steam liquid or a fraction thereof in a container.

The government is also proposing to increase the tobacco product tax by $ 4 per box of 200 cigarettes. It is estimated that this tax would increase federal revenues by more than $ 2.1 billion in five years.

Relying on data from Statistics Canada and the Public Health Agency of Canada, the document describes the average daily smoker who spent about $ 3,150 on cigarettes in 2020. The new measure would increase the excise tax included in the price of cigarettes by around USD 100 per year.

« In a number of population groups, the consumption of tobacco products is above average, » says the budget document. « This can lead to the fact that tobacco use is not affected, which can benefit smokers who are able to reduce consumption. »

From 2021 to 2022, tobacco taxation would generate revenue of $ 415,000,000 for the federal government. In the years 2022 to 2023 it would increase to $ 440,000,000. Revenue would be $ 2,135,000,000 over five years by the end of fiscal 2025-2026.

· 34% of students in grades 7-12 have tried a vaping product and 20% of students reported using it in the past 30 days

· 18% have tried an e-cigarette with nicotine and 11% have used an e-cigarette without nicotine in the last 30 days

· 54% of students found it “fairly easy” or “very easy” to get an e-cigarette with nicotine if they wanted one

Budget 2021: The government introduces new spending of USD 101.4 billion, with the deficit falling

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Quick highlights from the federal budget

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Ottawa expands broadband fund for rural, remote communities by $ 1 billion

Highlights from Chrystia Freeland’s speech and response

Liberals pledge $ 18 billion for indigenous communities

Your health and the federal budget: standards of care, vaccine production, more

Promised money for military fight against sexual misconduct, NORAD upgrades

Long-term plan for affordable housing replenished in the federal budget

Liberals spend billions on clean technology and target the private sector

Several votes according to the budget could, at least in theory, trigger an election

Read the full document on the federal budget here

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