EDN42 Changes to Excise Duty Rates on Tobacco Products

From: Canada Revenue Agency

March 2017

The information in this notice is for reference purposes only and does not replace the Excise Act, 2001 or its regulations. Should there be any discrepancy between the information in this notice and that contained in the Act or its regulations, the legislative provisions apply. As the information in this publication may not completely address your particular situation, you may wish to refer to the Act or appropriate regulation, or contact any Canada Revenue Agency regional excise duty office for additional information. These offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.

All legislative references in this publication are to the Excise Act, 2001, unless otherwise specified.

Any commentary in this notice should not be taken as a statement by the Canada Revenue Agency that the proposed amendments will be enacted in their current form.

On March 22, 2017, the Minister of Finance tabled Budget 2017 and an accompanying Notice of Ways and Means Motion proposing amendments to the Excise Act, 2001 to increase the rates of excise duty on tobacco products. These rates will take effect March 23, 2017.

The rates of excise duty on tobacco products are outlined below. The rates that are being amended appear in bold type.

Excise duty rates under sections 42 and 43.1, and Schedule 1

Excise duty rates on stamped tobacco products
Product Rate
Cigarettes $0.53900 per five or fraction of five cigarettes contained in any package
Tobacco sticks $0.10780 per stick
Manufactured tobacco other than cigarettes and tobacco sticks $6.73750 per 50 grams or fraction of 50 grams contained in a package
Cigars $23.46235 per 1,000 cigars
Raw leaf tobacco $1.572 per kilogram

Additional duty on cigars under sections 43 and 43.1, and Schedule 2

The additional duty on cigars is the greater of

  • $0.08434 per cigar, and
  • 84%, computed on
    • the sale price, in the case of cigars manufactured in Canada, or
    • the duty paid value, in the case of imported cigars.

Special duty rates on certain manufactured tobacco under sections 53, 54 and 56, and Schedule  3

Special duty on imported manufactured tobacco
Product Rate
Cigarettes $0.10780 per cigarette
Tobacco sticks $0.10780 per stick
Manufactured tobacco other than cigarettes and tobacco sticks $6.73750 per 50 grams or fraction of 50 grams contained in a package
Special duty on traveller’s tobacco
Product Rate
Cigarettes $0.10780 per cigarette
Tobacco sticks $0.10780 per stick
Manufactured tobacco other than cigarettes and tobacco sticks $6.73750 per 50 grams or fraction of 50 grams contained in a package
Special duty on unstamped tobacco products
Product Rate
Cigarettes $0.10780 per cigarette
Tobacco sticks $0.10780 per stick
Tobacco products other than cigarettes and tobacco sticks $134.75 per kilogram
Special duty on stamped tobacco products
Product Rate
Cigarettes $0.095724 per cigarette
Tobacco sticks $0.095724 per stick
Tobacco products other than cigarettes and tobacco sticks $5.98275 per 50 grams or fraction of 50 grams contained in a package

Effective date

The rates detailed above apply effective March 23, 2017. The CRA will collect the increased duty, paid on a voluntary basis, until such time as the amendments become law (i.e., Royal Assent). Importers and licensees that do not pay the duty in accordance with the new rates as of the date cited above will be required to pay interest on unpaid amounts once Royal Assent is received.

Further information

All technical publications related to the Excise Act, 2001 and its regulations are available on the CRA website. Go to cra.gc.ca/exciseduty and click on “Excise Act, 2001 – Technical Information” under the Publications heading.

To request a ruling or interpretation or make a technical enquiry on excise duty, contact one of the regional excise duty offices listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.

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