As of July 1, all Canadians will pay more for their vapes, and vapers in the country’s two most-populous provinces will pay much more.
The Canadian government increased its federal vape tax by 12 percent, effective July 1. At the same time, the two largest provinces—Ontario and Quebec—joined the national government’s “tax partnership” scheme that allows participating provinces to double the tax rate and keep half the take. (Two Canadian territories—Northwest Territories and Nunavut—also joined the tax partnership on July 1.)
A federal-provincial tax partnership
The partnership scheme, first announced in 2022, allows provinces to collect an amount equal to the federal tax. For the provinces, the tax program requires no effort at all. The feds do the collection work and accounting, and simply send a check for half the proceeds to the provinces.
It’s a virtually irresistible arrangement for needy provinces, which is why four other provinces and one territory have already agreed to join the tax scheme on Jan. 1, 2025: Alberta, Manitoba, New Brunswick, Prince Edward Island, and Yukon.
When Ontario announced last fall that it would join the tax partnership, the conservative-led provincial government justified the decision to team up with the Liberal Party-controlled national government by calling the plan a public health win, claiming it would reduce youth vaping and prevent vapers from the tragic (and mythical) gateway to smoking.
How much will Canadians pay?
All Canadians pay the federal tax, which works like this:
$1.12 per two milliliters for the first 10 mL (or portion thereof) in a sealed container (bottle, disposable, pod or cartridge)
$1.12 for each additional 10 mL (or portion thereof) in the container
For vapers in Ontario, Quebec, Northwest Territories and Nunavut, the tax is doubled, as it will be in January 2025 for those in Alberta, Manitoba, New Brunswick, Prince Edward Island and Yukon.
The tax applies to all vape products that contain e-liquid, with or without nicotine.
The tax is assessed to manufacturers when the products are imported or sold at wholesale. As of July 1, new products are taxed at the higher rate (and the tax cost usually passed on to customers), but there is a 90-day period during which products that entered the supply chain before July 1 can be sold at their old tax rates. So it’s possible customers will encounter pre-July prices for up to three months.
The bottom line: a 30 mL bottle of e-liquid will cost all Canadians an additional $7.84 in federal tax ($0.84 more than it did before July). A 5 mL disposable vape would be taxed $3.36, and a package of four refill pods containing less than 2 mL each will have a federal tax of $4.48. In Ontario, Quebec, Northwest Territories and Nunavut, the tax is twice as much for all of those products.
The provinces of British Columbia, Newfoundland and Labrador, Nova Scotia, and Saskatchewan, have not joined the federal partnership program, but all four already have their own provincial taxes—and consumers there will also pay the new higher federal tax.