How Does Canada’s New Vape Tax Affect You?

Vaping regulations in Canada are being reviewed. As of January 1st, next year, all vaping products will carry an excise stamp. That is because Canada Revenue Agency now requires an excise duty tax on e-cigarettes. This tax applies to both imported vaping products and those manufactured in Canada. Importers and manufacturers must be registered and licensed by the Canada Revenue Agency CRA. All vaping products in Canada must carry the excise duty stamp.

Vape Tax

Here’s what you should know about Canada’s new vape tax law: 

Excise duty tax is normally imposed on certain goods, such as nicotine, alcohol, cannabis, and tobacco. This tax now applies to all vaping products in Canada. And as of January 1st, these products must carry federal excise duty stamps. 

Since October 1st, manufacturers and importers have paid excise tax. The calculations are based on milliliters. This added tax will increase vaping product prices. Many expect an estimated $10 increase per 60mL and $16 for 120mL. That means vapers should expect an approximate 22% increase in the cost of e-liquids.

How the tax affects vapers

As mentioned, the price of vaping products will increase by over 20% as a result of the excise tax. Moreso, many believe this opens the door for provinces to impose other taxes on the goods. 

According to the tax proposal, the reason for this tax is to reduce the harmful consumption of these products. However, some argue that increased prices will result in higher consumption. In addition to this argument, vaporizers are not as harmful as cigarettes. 

Vapers should be aware of the difference, and also, it is important to note that cigarettes are still more expensive despite the tax. The tax only applies to e-juice containing nicotine. Other non-nicotine vaping products are not taxed.

That said, many still claim that vapers could end up paying over 100% price increase for vaping products. This is especially true for Canadians living in territories and provinces participating in the “coordinated vaping tax regime.” Besides, some provinces already have existing taxes on these products, which will be added.

Some vapers are stocking up on their favorite products before the new year because of this. We should mention that the new law allows Canadians traveling back to carry up to 120mL of e-juice without paying.

Other important information 

The new law will not apply to some vaping products. Any cannabis-based vaporizer already has an existing excise tax on it. Therefore, this one will not apply to such a product. Also, homemade vaping products are excluded as long as they are not for sale or distribution of any kind. 

Retailers having old stocks are eligible to sell them tax-free before January 1st. As mentioned, travelers coming back to Canada with up to 120mL vaping products will not pay tax on the product. However, the traveler must have been out of the country for more than 48 hours. There are no taxes on hardware products, such as mods and coils.