Vaping Taxes: A Smokescreen for Profit or a Public Health Measure?

The Canadian government implemented a federal excise tax on vaping products on October 1, 2022, followed by a 12% increase in 2024, and requires excise stamps on all vaping liquids and pre-filled pods. Provinces also had the option of adding their own excise duties. While officials claim this aims to curb youth vaping, some critics argue this mirrors Big Tobacco's tactics of prioritizing profit over public health. Let's explore this complex issue.

The Illusion of Protecting Youth

The government justifies the tax by citing the need to protect youth from the potential harms of vaping.

The director of Action on Smoking and Health, Les Hagen, claims that past price increases have been effective in reducing tobacco smoking among youth, stating "we anticipate the same with a vaping tax increase", and "there's evidence showing that vaping taxes actually do help to reduce you vaping." 

Here's the kicker:

The same research suggests that increasing the cost of vaping products actually just impacts affordability for everyone, including adults, rather than significantly deterring youth vaping. In fact, price increases can push young people towards riskier, unregulated online markets or even back to traditional cigarettes, negating any intended public health benefits.

Check out this video from Rights4Vapers, an advocacy group who's shown time and time again just how ineffective these policies can be, leading to a black market of products that had no need for existence. 

The claim that vaping is a gateway to smoking is constantly being brought up, without acknowledging that it is by far a lesser evil than traditional cigarettes, a view supported by a plethora of scientific data. 

Is Taxation Effective in Curbing Vaping Among Youth?

Yes, taxation is effective in curbing vaping amongst everyone. It works because the tax is so disproportionately high, that many Canadians simply can no longer afford it. 

Mirroring Big Tobacco's Playbook

By implementing a complex tax system that disproportionately burdens lower-income individuals, the government appears to be prioritizing revenue generation over genuine public health concern.

Like Big Tobacco's past use of preemption laws (an industry tactic used to block local regulations), the tiered federal and provincial excise taxes arguably create a confusing and potentially exploitative system. 

This system incentivizes provinces to participate in taxing their citizens under the guise of "health promotion", and at times, could increase government revenue streams in a way that benefits the province financially more so than its citizens.

A Pricey Proposition for All

The "tax-on-tax" structure of the excise duty, combined with existing sales taxes, significantly increases the cost of vaping products for all consumers. While some argue that this will discourage vaping overall, the reality is that it may simply make is less accessible for those who rely on vaping as a less harmful alternative to traditional cigarettes. This particularly affects lower-income individuals, who may be forced to choose between a more expensive, but potentially healthier option, and a cheaper, but more harmful one. 

The Need for Transparency and Evidence-Based Policy

Instead of implementing potentially regressive taxes, many advocates suggest that the government should focus on comprehensive, evidence-based strategies to address youth vaping, one that doesn't involve cherry-picked statistics that are presented without context. Suggestions include further restrictions on forms of advertising, increased public awareness campaigns, and support for real cessation programs. 

Transparency in the decision-making process and a genuine commitment to public health should be prioritized over revenue generation. 

Furthermore, some studies suggest that excise taxes should focus on nicotine content. This would allow those vaping nicotine free or low nicotine products to vape inexpensively, while at the same time, discouraging nicotine intake through higher prices, a clear public health benefit. 

Greater investment in long-term monitoring and research is essential for understanding the effects of vaping and developing effective public health strategies. As it stands, some critics argue that Canada's vaping tax policy resembles a smokescreen, obscuring its true intent and creating more problems than solutions. 

How Much of the Price is Tax?

Check our our Interactive E-Liquid Excise Tax Calculator. Select an option or enter the e-liquid mL quantity to see how much excise tax has been paid on the product, before it's even sold to the customer.