Q&A of Excise Duty on vaping products in Canada

Effective October 1st, 2022, Health Canada is implementing a new Excise Duty on all vape substances that are either manufactured or imported into Canada.

This outlines some frequently asked questions, to help consumers, retailers, manufacturers etc. learn more about WHO, WHAT, WHEN, and HOW of this new excise tax.

How much is excise tax on vaping in Canada?
For vaping liquids:
• $1 per 2 millilitres (mL), or fraction thereof, for the first 10 mL of vaping substance in the vaping device or immediate container
• $1 per 10 mL, or fraction thereof, for amounts over the first 10 mL

For vaping solids:
• $1 per 2 grams (g), or fraction thereof, for the first 10 g of vaping substance in the vaping device or immediate container
• $1 per 10 g, or fraction thereof, for amounts over the first 10 g

1) A package containing 4 pods, with each pod containing 1.5 mL of vaping liquid, attracts $4 of vaping duty ($1 per 1.5 mL pod). It is important to note that the vaping duty is calculated on the quantity of vaping liquid contained in each individual pod, not on the total volume contained in the package.
2) A 30 mL bottle of vaping liquid attracts $7 of vaping duty ($5 for the first 10 mL plus $2 for the next 20 mL).

Greentime Technologies– One stop vape hardware solutions

Who has to pay the vaping excise tax in Canada?
The Federal Government of Canada has now implemented an excise tax on disposable vapes, and e-liquids produced and sold within Canada. Anyone who makes disposable vapes or manufactures e-liquids for sale in the country is expected to pay this excise tax. This includes companies who buy, sell, distribute and market disposable vaping products and those who make them. This tax aims to help reduce the number of disposable vape users, and create money for the government to use on public health initiatives. Making disposable vaping more expensive gives buyers an incentive to quit or make healthier lifestyle choices.

When is the vaping excise tax in Canada effective?
As of January 1st, 2023, a federal excise tax on all vaping products has come into effect in Canada. This tax applies to disposable vapes, vapes and e liquids.
All vape and e-juice products manufactured before Oct 1st, 2022, are exempt from this tax until January 1st, 2023.
While the excise act will add some cost to vape purchases, it opens the door for manufacturers, distributors and retailers of vape products to sell, knowing they comply with the latest regulations.

What products are subject to the vaping excise tax in Canada?
Canadians are now subject to a new excise tax on all vape and e liquid products – including disposable vapes and even those with zero nicotine. This innovative tax structure is designed to encourage the responsible use of vaping products while still allowing access to the technology and enjoying its benefits. Canada’s new excise tax is expected to ensure safe and accountable use amongst consumers.

How to implement the Excise duty on vaping products?
Importers are required to apply for a registration from the CRA. Manufacturers and importers are also required to register for the vaping stamping regime. All vaping products entering the Canadian duty-paid market are required to be packaged with an excise stamp affixed to the product.
As a vaping retailer, you can take the following steps to ensure you are following the law: Ensure that your suppliers are aware of the new excise duty framework on vaping products, and their new obligations including the stamping requirements for vaping products packaged or imported on or after October 1st, 2022. Starting January 1, 2023, you must not be in possession of unstamped packaged vaping products. After this date, you can only sell vaping products that have a vaping excise stamp affixed to the product.

Learn More:
Excise duty on vaping products (from Government of Canada www.canada.ca)