Regarding the federal tobacco tax increase and new e-cigarette tax in the federal budget on Monday April 19, 2021, excerpts from the budget documents are copied below.
Budget 2021
(excerpt)
Taxation of Vaping Products
Young Canadians’ use of vaping products, such as e-cigarettes, is on the rise. One Health Canada survey indicates that, since 2018, use has doubled among Canadian high school students. Vaping with nicotine poses risks, especially to young people: nicotine is highly addictive, can affect memory and concentration, and is known to alter brain development in teens. In addition to raising revenues, vaping taxation could become an effective means to help curtail harmful consumption of these products. Budget 2021 announces the government’s intention to introduce a new taxation framework for the imposition of excise duties on vaping products in 2022. The Government of Canada will also work with any provinces and territories that may be interested in a federally coordinated approach to taxing these products.
Taxation of Tobacco
Tobacco use continues to be the leading preventable cause of premature death in Canada. Tobacco taxation is an effective way to reduce tobacco consumption and help reach the government’s goal of less than 5 per cent of the population using tobacco by 2035. Budget 2021 proposes to increase the tobacco excise duty by $4 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates for other tobacco products. This measure would take effect the day after Budget Day. It is estimated that this measure will increase federal revenues by $2.1 billion over five years starting in 2021-22.