The Lowdown on Vape Tax

If you're a Canadian smoker who has switched to vaping, it should be fair to say that you're already aware of the new tax law on the use of vapes in the country. If not, it took effect last October 1, 2022, and was an amendment to the Excise Act 2001 introduced last June 23, 2022. . 

The goal of the additional tax is to regulate the growing vape market, reduce youth access to vaping products, and generate revenue for public health initiatives at the same time. Understanding this new vape tax is crucial for consumers like you, especially since it could potentially affect your future vaping habits and expenses.

The tax is a federal excise duty applied to all vaping products being manufactured and sold in Canada. It also covers those imported from other countries. While the tax was imposed to curb the increasing use of vaping products among young people, it also sought to ensure that vapes are taxed like traditional tobacco. Additionally, the vape tax rates are structured in a way that they are applied differently based on the type of vaping product involved.

Specifically, the tax is levied at a rate of $1.00 per two milliliters or mL for the first 10 mL of e-liquid stored in a container, and $1.00 per 10 mL for any additional liquid after the initial 10 mL. This means that if you have a small vape container, you could be taxed higher per milliliter as opposed to having a large bottle. Ostensibly, the law aims to dissuade frequent small purchases which are often made by young vapers.

How much is the vape tax in Canada? Calculating it may appear daunting if you do it on your own. Nevertheless, it follows a generally straightforward process. Here’s a step-by-step guide that you can refer to:

Determine the Total Vape Volume

To do this, look for the numbers listed in your vape container. The total e-liquid volume details can be seen on the label.

Calculate Your Initial Tax Rate

When you compute the applicable tax amount, you just need to remember the basic provisions of the new law. Specifically, for the first 10 mL of e-liquid vape, your taxed amount is $1.00 per 2 mL. Thus, if you have a 10 mL vape bottle, the applicable tax is $5.00.

Add Any Extra Rates

For e-liquid vape volume that exceeds the initial 10 mL, a tax of $1.00 per 10 mL will be imposed. For your 30 mL bottle of vape, you'll get a $5.00 taxed amount for the first 10 mL plus $2.00 for the remaining 20 mL. This means you'll be charged  $7.00 in total excise duty.

The introduction of the new vape tax Canada plan will likely result in a sharp increase in the current price of various vaping products. Many vaping companies will consider the added tax amount as an unnecessary expense, and pass this on to you as the consumer. Thus, if you regularly buy a 30 mL bottle of e-liquid at only $20, your next purchase could cost you $27. This is to allow the vape company to recover the $7.00 extra tax levied against its product. Similarly, pre-filled pods and disposable vape pens will likely see price hikes proportional to their e-liquid content.

As a vape user, you should see the price increase the next time you make a purchase. Thus, your vaping expenses will go up and may turn out to be challenging eventually, especially if you can only afford to make small purchases of e-liquid vapes. An option is to buy large quantities of vape liquids or settle for refillable vape devices. These may mean higher costs for you at first but should give you significant savings in the long term.

On the positive side, you can expect vape manufacturers to come up with promotions designed to help you cope with the vape tax impact. Discounts on bulk purchases may also be extended or a loyalty program can be introduced which you can avail of as part of your vape budgeting agenda.

While the federal vape tax law is applicable all across Canada, several provinces are known for imposing additional duties. Given this, you should become familiar with the vape juice tax Canada scheme being enforced in your area. With this information in your hands, you can have a clearer idea of how much you have to spend for your vaping needs vis-a-vis the total tax that you could get charged for consuming vapes.

Nova Scotia

Last September 15, 2020, Nova Scotia implemented a $0.50 provincial tax rate on liquid vaping products per millilitre. If the vape is available in solid form, the applicable tax is $0.50 per gram.

Saskatchewan

If you're a resident of Saskatchewan, you know that the province has a 20% Vapour Products Tax (VPT) levied against all vaping products. It replaced the Provincial Sales Tax (PST) last September 1, 2021, which imposed only a 6% tax on vapes. 

Ontario

In Ontario, a new tax scheme for vaping production was put in place recently to discourage young people in the province from using vapes. The enhanced duty provides for a $2 fee per two milliliters of a bottle of e-liquid vape containing 10 mL. An additional $2 tax per 10 mL is applied after the first 10 mL volume is purchased.

Explore WAKA Vaping Products

While Canada’s vape tax may come off as an inconvenience for many users, you may want to see it from its long-term goal of regulating the vaping market and protecting the youth. If the law gets to adversely affect you as a vape consumer, you can look for alternative purchasing strategies and avenues. WAKA, with our wide range of vaping products, may be a suitable partner in helping you plan your vaping budget more effectively.