Federal and Provincial Tax Increases on Vaping Products: Key Information
It seems your federal and provincial leaders are looking to fund new luxuries again.
In a move that's unlikely to surprise many, both the Federal Government of Canada and multiple Provincial Governments have introduced significant excise tax hikes on vaping products. This aligns with the ongoing trend of rising taxes that appear to support "lavish lifestyles" rather than genuine public necessities.
Federal Tax Increase
On May 14, 2024, the Canada Revenue Agency (CRA) announced a 12% tax hike on all vaping products, effective July 1, 2024. This affects the current federal excise tax rate on products featuring the Excise Stamp, including all vape juices. No, it's not a typo — a 12% increase is coming and will have a considerable impact on vaping product prices.
Provincial Tax Changes
In addition to the federal increase, several Provincial Governments — Ontario, Quebec, Nunavut, and the Northwest Territories — have revealed their plans to implement a Provincial Excise Tax. This will match the federal excise tax rate, effectively doubling the tax burden.
Breakdown of the New Tax Rates
Here’s a comparison of the current and upcoming tax rates to give you a clearer picture:
Current Tax Rates:
- Buying a 20mL disposable vape: $6 in Excise Tax.
- Buying two 20mL disposable vapes: $12 in Excise Tax.
As of July 1, 2024:
- Buying a 20mL disposable vape: $13.44 in Excise Tax.
- Buying two 20mL disposable vapes: $26.88 in Excise Tax.
With these increases, taxes on vaping products will more than double starting this July. The combined federal and provincial taxes are set to take a toll, and yes, you guessed it — it’s because of the taxes.
Volume-Based Tax Breakdown
|
Volume |
Federal Tax (Current) |
Federal Tax Increase (12%) |
Provincial Tax Increase (12%) |
Total Federal & Provincial Tax (Per Unit) |
|
0.1 - 2mL |
$1 |
$1.2 |
$1.2 |
$2.24 |
|
2.1 - 4mL |
$2 |
$2.24 |
$2.24 |
$4.48 |
|
4.1 - 6mL |
$3 |
$3.36 |
$3.36 |
$6.72 |
|
6.1 - 8mL |
$4 |
$4.48 |
$4.48 |
$8.96 |
|
8.1 - 10mL |
$5 |
$5.60 |
$5.60 |
$11.20 |
|
10.1 - 20mL |
$6 |
$6.72 |
$6.72 |
$13.44 |
|
20.1 - 30mL |
$7 |
$7.84 |
$7.84 |
$15.68 |
|
50.1 - 60mL |
$10 |
$11.20 |
$11.20 |
$22.40 |
New Vaping Product Regulations: What to Expect
The tax hikes on vaping products that will come into effect on July 1, 2024, are just one piece of the puzzle. There are additional regulatory changes that will dramatically alter how vaping products are sold and distributed — including the potential for criminal charges involving the RCMP. Yes, federal police resources are being allocated to this issue.
New Provincial Excise Tax Stamps
Starting on September 30, 2024, all vaping products will be required to feature province-specific excise stamps. These new stamps, different from the current federal ones, will indicate the designated province for the product. This means businesses will only be able to sell products stamped for a particular province to customers in that province. If a product ordered online does not match the buyer’s provincial address, the order will be canceled — even if the item is in stock.
Why? Keep reading.
RCMP Enforcement
This new regulation will be enforced by the RCMP starting on October 1, 2024. The RCMP Excise Officers will be responsible for ensuring compliance, addressing complaints, and enforcing these new rules. Any non-compliance, such as selling a product stamped for Ontario in Quebec, will be considered a criminal offense.
Yes, you read that correctly. The RCMP will be monitoring and issuing criminal penalties as they see fit — all because of vape juice.
Key Dates and Changes
- July 1, 2024: Federal and Provincial Excise Tax increases come into effect, raising vaping product prices.
- September 1, 2024: All products must display the new Excise Stamps. Products without these stamps can no longer be sold.
- September 30, 2024: Businesses must sell only products with province-specific stamps, limited to that province.
- October 1, 2024: The RCMP begins enforcement, with severe penalties and criminal charges for non-compliance.
Take a moment to absorb this. The landscape for vaping in Canada is about to change dramatically.