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Canadian Vaping Excise Tax Explained

Author

Christopher Fournier

Date

Dec 8, 2022

Categories

U Vape Blog

Canadian Vaping Excise Tax Explained

Summary of Key Points

  • An excise tax is any tax legislated by a country to goods or services sold for use within its borders. Canada already has excise taxes for spirits, wine, cannabis, and tobacco products, but an excise tax on vape products came into effect on October 1, 2022.
  • The excise tax requires all e-liquids, disposable vapes, pre-filled systems, and DIY products used to make e-juice to bear an excise stamp by January 1, 2023. The excise stamp shows that the appropriate duties have been paid.
  • The amount of the duty is $1 on every 2mL or g of product (depending on whether it is liquid or solid) up to 10mL or g, plus $1 per 10mL or g thereafter (rounded up to the nearest unit). The duties must be paid by the party packaging the product or the required party under Canada’s Customs Act (for imported products).
  • Many businesses will likely raise their prices to compensate for these taxes, increasing costs for consumers. Still, vaping remains considerably more affordable than smoking cigarettes (e-liquid will still only cost ~25% as much as cigarettes).

cigarettes (e-liquid will still only cost ~25% as much as cigarettes). Look closely and you’ll see a new detail on the packaging for any vape products you buy after the start of 2023: an excise stamp. All vaping products sold across Canada require this stamp once 2022 ends. But an excise duty (or excise tax) has already been in place on vaping products sold in Canada since October 1st, 2022—so what does that mean for you and your vaping experience?

Don’t worry; UVape is always caught up on the latest developments in the vaping world so that we can keep making it as easy as possible for you to keep purchasing and using the highest-quality products. Below, we’ll explain everything you need to know about Canada’s vaping excise tax so you can find out how it will affect you.

Canadian flag rendered with smoke effect to symbolize vaping in Canada

Via Adobe Stock.

What Is An Excise Tax?

Excise taxes or excise duties apply to specific goods manufactured within a country or imported for use in that country. This makes them different from tariffs (which apply to goods imported between countries to regulate competition and protect domestic suppliers).

Numerous products are subject to excise taxes in Canada. Excise taxes on the following goods existed in Canada before the tax on vaping products:

  • Spirits
  • Wine
  • Tobacco products
  • Cannabis products
Although excise taxes must technically be paid by the manufacturers or importers of the products they apply to, nearly all businesses affected by excise taxes raise their prices to compensate, increasing consumer prices as a result.

The Canada Vaping Excise Tax Explained

Canada’s excise tax on vaping products requires a duty to be paid on all vaping products intended for use in a vape device in Canada. These goods will also require a stamp confirming that the appropriate duties were paid.

As mentioned above, the Canada vaping excise tax came into effect on October 1, 2022—but there was a transition period between then and December 31, 2022 intended to let the industry adjust. That basically means that vape shops could carry stamped and unstamped vaping products until 2023—but as of January 1 2023, buying or selling unstamped products is illegal.

Diagram showing stamp for products affected by Canada's vape excise tax

Here’s what the excise stamp looks like. Via Canada.ca.

Frequently Asked Questions about the Canada Vaping Excise Tax

The new excise duty on vaping products for use in Canada applies as follows:

  • $1 per 2mL or g (for liquid vs. solid products) for the first 10 mL or g of product packaged in a given device or container.
  • $1 per 10mL or g for amounts above the initial 10 mL or g.

Amounts are rounded up to the nearest mL or g to calculate the amount of the final duty. Here’s how that will look for standard e-liquid containers:

Size of Container Amount of Excise Tax
30mL $7.00
60mL $10.00
120mL $16.00

Who Pays the Canada Vaping Excise Tax & When?

It depends on whether the product being taxed is made in Canada or imported. The duties for vaping products made in Canada must be paid when the product is packaged, by the product licensee (i.e. the party packaging the product).

For imported products, the duty must be paid at the time of importation by the party liable under the Canada Customs Act. This is usually the owner or importer of the product.

Will the Canada Vaping Excise Tax Make Vaping More Expensive?

Businesses manufacturing or importing vaping products will raise their prices to compensate for the new excise tax, passing the costs onto consumers. Still, that doesn’t mean vaping will suddenly become unaffordable.

Remember, if you use cannabis or tobacco products (among others), you’ve almost certainly already been paying for the excise tax on them. So this new legislation isn’t some kind of unique way of penalizing vapers. And even with the new excise tax, vaping remains vastly more cost-effective than smoking (for example, e-liquid will only cost ~25% as much as cigarettes).

Smiling woman holding Canadian dollars to symbolize savings from vaping vs. smoking

Via Adobe Stock.

Does the Canada Vaping Excise Tax Apply to Devices or Just e-Juice?

The new excise tax applies to e-liquid, disposable vapes, pre-filled pod systems, and nic base sold for use in vaping. However, it does not apply to hardware, meaning that you shouldn’t expect to see higher prices on any refillable devices that haven’t been pre-filled before being packaged and sold.

Learn More about Buying Vape Products in Canada

Understanding the ways that new laws and regulations can affect your ability to buy vaping products helps you plan and budget for your devices, e-liquids, and accessories. To learn more or discover our wide range of high-quality vaping products available across Canada, contact UVape and speak with a team member who can answer your questions.

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