JULY 2024 EXCISE TAX INCREASE
On October 1st, 2022, the Canadian federal government introduced an excise tax requiring all e-liquid bottles, Disposables, & pre-filled pods sold in Canada to bear excise-duty stamps, similar to those on tobacco and cannabis products.
Starting July 1st, 2024, Manitoba, Ontario, Quebec, Northwest Territories, and Nunavut will also levy provincial excise duties on these nicotine products, following the federal guidelines. When the government drafted that regulation, they allowed each province to also "piggyback" and collect excise duty on behalf of each province if the province wished to opt in.
This move also coincides with a 12% increase in the Federal duty rate outlined in the 2024 Finance budget, effectively increasing & doubling the excise duty in these provinces.
The Federal excise duty rates are now structured as follows:
$1.20 per 2mL on the first 10mL of e-liquid, pod, or disposable (equivalent to $6 on the first 10mL of a bottle) and $1.20 per 10mL for quantities beyond the first 10mL
This effectively adds $7.84 (Federally) + $7.84 (Provincially) in tax on a 30mL bottle, $11.20 (Federally) + $11.20 (Provincially) on a 60mL bottle, $17.92 (Federally) + $17.92 (Provincially) on a 120mL bottle, and $60.48 (Federally) + $60.48 (Provincially) on a 500mL bottle.
This tax is built into the cost of the product at the manufacturer level and will not normally be reflected separately on most receipts and therefore is also subject to being taxed again with GST/HST/QST/PST…
Manufacturers must begin affixing provincial stamps to their products by July 1st, 2024. These changes will greatly impact consumers purchasing e-liquids within Manitoba, Ontario, Quebec, Northwest Territories, or Nunavut.
Retailers in these provinces have until Oct 1st to sell off their remaining Federal stamped products and then must only sell the dual stamped products going forward in their provinces.
Retailers in other provinces are not legally allowed to sell Federal only stamped products to these provinces as of Oct 1st as well. They can only ship dual stamped stamps to these affected provinces.
Imported products must comply with these regulations to avoid being confiscated by Canadian customs. Canada Border Services Agency and the Canadian Revenue Agency have made it clear that any products shipped into Canada from outside Canada must be duty-stamped or considered not legal for sale or import; as we've seen with the federal stamp regime, Customs have been confiscating and denying entry to packages that are not duty-paid/stamped.
This excise duty applies to all vapable nicotine products, including disposables & pre-filled pods, but does not affect vaping hardware.
Despite these taxes, vaping still remains a more economical choice compared to smoking cigarettes. A pack-a-day smoker will spend roughly ~ $130 on cigarettes vs. ~ $40-$70 on 30ml-60ml of e-liquid in the same 1-week period.