Government releases draft regulations on coordinated vaping taxation framework

From: Department of Finance Canada

News release

June 17, 2024 - Ottawa, Ontario - Department of Finance Canada

Vaping rates among young people in Canada remain high, and the federal government recognizes the potential risks that vaping products pose to them.

The Department of Finance today released draft regulations to enable Alberta, Manitoba, New Brunswick, Yukon, and Prince Edward Island to participate in Canada’s coordinated vaping taxation framework. Ontario, Quebec, the Northwest Territories, and Nunavut are already parties to the framework.

In Budget 2024, the government announced a 12 per cent increase to vaping excise duty rates. This increase is the equivalent of 12 cents per typical vape pod in a non-participating jurisdiction, or 24 cents per typical vape pod in a participating jurisdiction. This increase would take effect on July 1, 2024, along with the implementation of the coordinated taxation regime in Ontario, Quebec, the Northwest Territories, and Nunavut.

Budget 2024 builds on the government’s recent work to combat the rise of vaping among younger Canadians. In Budget 2021, the government announced both the introduction of a new taxation framework for the imposition of excise duties on vaping products in 2022, and its intention to work with any provinces and territories interested in a federally coordinated approach to taxing these products. Under the framework, total revenues are to be split between federal and provincial and territorial governments on a 50/50 basis.

All Canadians and stakeholders, including Indigenous governments, organizations, and associations, are invited to share feedback on these proposals by emailing Consultation-Legislation@fin.gc.ca by July 22, 2024.

Quick facts

  • Today’s draft regulations would allow for the January 1, 2025, implementation of the Coordinated Vaping Products Taxation Agreement in Alberta, Manitoba, New Brunswick, Yukon, and Prince Edward Island.

  • According to the 2022 Canadian Tobacco and Nicotine Survey, younger Canadians were significantly more likely to have ever vaped than the Canadian average. In 2022, 30 per cent of youth aged 15 to 19 (631,000 youth), and 47.5 per cent of those aged 20 to 24 (1.1 million young adults) reported ever vaping, compared to just 14.7 per cent (4 million adults) for Canadians aged 25 and older. 

  • Dutiable vaping products must bear an excise stamp indicating that duty has been paid.

  • As of July 1, 2024, any vaping product manufactured in, or imported into, Canada and destined for the duty-paid market of a participating jurisdiction (Ontario, Quebec, the Northwest Territories, and Nunavut) must bear an excise stamp specific to that province or territory.

  • Beginning January 1, 2025, jurisdiction-specific stamps will be required for dutiable vaping products intended for sale in Alberta, Manitoba, New Brunswick, Yukon, and Prince Edward Island.

  • The Canada Revenue Agency is responsible for the collection and administration of vaping product excise duties in Canada, while the Canada Border Services Agency collects excise duties and other applicable taxes and duties on vaping products imported into Canada.

Related products

Contacts

Media may contact:

Katherine Cuplinskas
Press Secretary and Senior Communications Advisor
Office of the Deputy Prime Minister and Minister of Finance
Katherine.Cuplinskas@fin.gc.ca

Media Relations
Department of Finance Canada
mediare@fin.gc.ca
613-369-4000

General enquiries

Phone: 1-833-712-2292
TTY: 613-369-3230
E-mail: financepublic-financepublique@fin.gc.ca

Stay Connected

Page details

Date modified: