Canada Vape Tax

The Canadian federal government has announced that it will be implementing a new tax on vaping products, effective October 1st, 2022. This so-called excise duty will be applied to all e-Liquid products, in addition to any existing HST or GST. Keep reading about the Canada Vape Tax in this blog post.

Many people are still trying to understand what this new excise duty is all about and what exactly it means. In this blog post, we will discuss the Canada Vape Tax and answer all of your questions.

What Is The Excise Duty On Vaping Products?

Excise taxes are levied on specific items for their production, licensing and sale, like tobacco, alcohol, and gas, which are considered harmful to public health. These taxes are commonly collected by the Canadian federal government and supervised by the Canada revenue agency.

This new tax on vaping products, on e-Liquids to be precise, will be set in motion on October first, 2022. The excise duty will require all e-Liquid bottles and cartridges (pre-filled) produced and imported to Canada, to be labeled with excise tax stamps. Those excise tax stamps indicate that certain goods or products have been taxed. You might already know these excise tax stamps from items such as alcohol and cigarettes.

Who Will Pay This New Vape Duty?

To begin with, the excise duty on vaping products is paid by businesses that produce e-Liquids and vaping products. This is then passed on to the consumer, which means that in the end the customer pays the vaping tax to the retailer.

Which Vape Products Will Be Affected?

The new excise duty will only be applied to e-Liquid, bottled and pre-filled pod system e-Liquids. This also includes disposable vapes. This means only eJuice is affected by this new tax, not any vape hardware (as long as it does not contain e-Liquid). The new excise duty will be applied on e-Liquids whether it contains nicotine or not.

Canada Excise Duty Costs

The new Canada Vape Tax for vape juice is established in The Excise Act, 2001, and work out to be per milliliter:

Tax On Refillable e-Liquids
– for the first 10 ml it is $1 per 2 ml, or fraction thereof in the device
– for amounts over the first 10 ml it is $1 per 10 ml, or fraction thereof

Tax On Hardware Devices Filled With eJuice
If a package carries 2 pods, with each pod containing 1.5 ml of e-Liquid, the vape tax would be $2. The excise duty is always calculated on the quantity of eJuice in each individual pod.

How To Calculate The Canada Vape Tax

Example On A 30 mls Bottle

On a 30 mls bottle of vape liquid in Canada, the new tax will be
$5 for the first 10 mls and $2 for the next 20 mls. In total this is $7 vape tax on a 30 mls bottle. The excise duty in this example works out to be approximately $0.23 cents per ml.

Example On A 60 mls Bottle

On a 60 mls bottle of vape liquid in Canada, the new tax will be
$5 for the first 10 mls and $5 for the next 50 mls. In total this is $10 vape tax on a 60 mls bottle. The excise duty in this example works out to be approximately $0.16 cents per ml.

Example On A 130 mls Bottle – Best Deal!

On a 130 mls bottle of vape liquid in Canada, the new tax will be
$5 for the first 10 mls and $12 for the next 120 mls. In total this is $17 vape tax on a 130 mls bottle. The excise duty in this example works out to be approximately $0.13 cents per ml, which makes it your best value!

Again the new Canada Vape tax is not going to affect unfilled vape hardware. It will only be applied on e-Liquids.