EDN99 Additional specified vaping provinces effective November 6, 2024

Excise Duty Notice

November 2024

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Act, 2001. In addition, all references to the "Regulations" are to the Excise Duties on Vaping Products Regulations. The information in this publication does not replace the law found in the Act and its regulations.

If this information does not completely address your particular situation, you may refer to the Act or relevant regulation, or contact your CRA regional excise office for additional information. The offices are listed at Contact information – Excise and Specialty Tax Directorate. 

Table of Contents

• Overview
• Definitions
• Coordinated vaping duty system
  • Additional specified vaping provinces
• Imposition and payment of additional vaping duty on vaping products
• Transitional rules – Additional specified vaping provinces
  • Stamping with a province-specific stamp prior to January 1, 2025

Overview

The Canada Revenue Agency (CRA) is responsible for administering and enforcing the excise duty framework for vaping products under the Excise Act, 2001, including the coordinated vaping duty system with specified vaping provinces. The framework includes the imposition of excise duties that generally apply to vaping products manufactured in Canada or imported into Canada and intended for the duty-paid market. The vaping duty and additional vaping duty, as applicable, apply to vaping products whether or not they contain nicotine.

Definitions

The following terms, defined under the Act or related regulations, are used in this notice:

Additional vaping duty means a duty imposed under section 158.58 in respect of a specified vaping province. This is in addition to vaping duty imposed under section 158.57.

Coordinated vaping duty system means the system providing for the payment, collection, and remittance of additional vaping duty imposed under section 158.58, subsection 158.6(2) and 158.61(2) and any related sections.

Qualifying vaping product means a vaping product that is not stamped to indicate that additional vaping duty in respect of a specified vaping province has been paid and that is either:

• manufactured in Canada and stamped before January 2025
• imported by a vaping product licensee for stamping by the licensee and stamped before January 2025
• imported by a person that is not a vaping product licensee, such as a vaping prescribed person or a person importing for their personal use, and imported or released under the Customs Act before January 2025

Stamped, in respect of a vaping product, means that a vaping excise stamp and all prescribed information in respect of the vaping product, are stamped, impressed, printed or marked on, indented into or affixed to the vaping product or its container in the prescribed manner to indicate that vaping duty and any additional vaping duty have been paid.

Vaping duty means a duty imposed under section 158.57.

Vaping excise stamp means a stamp that is issued by the CRA under subsection 158.36(1) and that has not been cancelled under section 158.4.

Vaping product means one of the following:

• a vaping substance that is not contained within a vaping device
• a vaping device that contains a vaping substance

It does not include a cannabis product or a tobacco product.

Vaping substance means a substance or mixture of substances, whether or not it contains nicotine, that is produced to be used, or sold for use, with a vaping device to produce emissions in the form of an aerosol.

Coordinated vaping duty system

The coordinated vaping duty system provides for the payment, collection, and remittance of additional vaping duty or to any refunds in respect of the additional vaping duty.

The system results in an increase in the total duty collected on vaping products as an additional vaping duty is imposed on vaping products entering the duty-paid market in specified vaping provinces.

To show that the additional vaping duty for a specified vaping province has been paid, a vaping excise stamp for the specified vaping province must be affixed in a prescribed manner to vaping products entering the duty-paid market of the specified vaping province.

For provinces that have not joined the coordinated vaping duty system, a peach-coloured Canada vaping excise stamp must be affixed to vaping products in those provinces.

Additional specified vaping provinces

In addition to the previously announced specified vaping provinces (Ontario, Québec, Northwest Territories, and Nunavut), the following jurisdictions have entered into coordinated vaping product taxation agreements with the federal government and are therefore specified vaping provinces under the Regulations:

• New Brunswick
• Manitoba
• Prince Edward Island
• Alberta
• Yukon

Imposition and payment of additional vaping duty on vaping products

Effective January 1, 2025, under section 158.58, an additional vaping duty is imposed on vaping products manufactured in Canada or imported, if the products are for consumption, use, or sale to consumers in the five additional specified vaping provinces listed above. The rate of additional vaping duty is determined under Schedule 8 to the Act. For more information on excise duty rates, go to Excise duty rates.

The additional vaping duty is in addition to the vaping duty imposed under section 158.57.

The additional vaping duty on products stamped in Canada is payable to the CRA at the time of stamping.

The additional vaping duty on imported stamped products is payable at the time of importation to the Canada Border Services Agency (CBSA).

For additional information on the coordinated vaping duty system as well as how to calculate and pay the vaping duty and additional vaping duty, refer to Notice EDN95, Coordinated vaping duty system.

Transitional rules – Additional specified vaping provinces

To facilitate the addition of the new specified vaping provinces to the coordinated vaping duty system, the Regulations include transitional provisions from January 1, 2025, until March 31, 2025.

These transitional provisions apply to qualifying vaping products that have entered or will be entering the duty-paid market of New Brunswick, Manitoba, Prince Edward Island, Alberta, and Yukon before January 2025.

Based on the definition, a qualifying vaping product includes a vaping product that is stamped with a peach-coloured Canada vaping excise stamp and that was either:

• manufactured in Canada or imported for stamping in Canada and stamped before January 2025
• stamped prior to importation and imported or released into Canada before January 2025

During the transitional period, the possession, purchase, disposition, and sale or offer for sale of qualifying vaping products will continue to be permitted in the duty-paid market of the additional specified vaping provinces.

Effective April 1, 2025, all vaping products to be sold in the duty-paid market of an additional specified vaping province must be stamped with a vaping excise stamp for the specified vaping province.

Stamping with a province-specific stamp prior to January 1, 2025

If a vaping product licensee or vaping prescribed person chooses to stamp products prior to January 1, 2025, with a province-specific stamp for any of the new specified vaping provinces, the additional vaping duty is imposed and payable on those products.

For vaping products that are stamped in Canada, vaping product licensees must report the vaping duty and additional vaping duty, as well as the usage of their stamps on the return for the reporting period during which the products were stamped.

For vaping products that are stamped outside of Canada, vaping product licensees and vaping prescribed persons must pay vaping duty and additional vaping duty to the CBSA at the time of importation and must report the usage of their stamps on the return for the reporting period when the products were imported.

For information about filing returns and remitting vaping duty and additional vaping duty, refer to Notice EDN78, General information – Vaping products.

Further information