Federal Vape Tax Increase Expected This Summer

Ottawa, May 19, 2024 — Starting July 1, Canadians can expect to pay more for vape products due to a federal tax increase proposed in this year’s budget. The price of a vape pod is set to rise between 12 and 24 cents, depending on the province, a move projected to generate $310 million for the government over the next five years.

Ottawa justifies the tax hike as a measure to curb the high vaping rates among younger Canadians. However, public health experts have mixed feelings about its potential effectiveness and unintended consequences.

Rob Cunningham, a senior policy analyst with the Canadian Cancer Society, believes the tax will contribute to reducing the number of vapers but considers the increase modest. “A 12 percent increase, that’s really close to inflation over the last few years. So it’s not really much of an increase at all,” Cunningham commented. “We could go much higher.”

Dr. Shawn Aaron, a respirologist in Ottawa, echoed Cunningham’s sentiment, suggesting the government could take stronger action. “The federal government could go even stronger,” Aaron said. “It’ll be hard to undo this easy access to vaping products, but government really has to do something to make this a less easy activity for young people.”

Statistics Canada reports that in 2022, one in 15 Canadians aged 15 to 19 vaped daily. Among young adults aged 20 to 24, the rate was even higher, with one in 10 vaping daily.

While some experts advocate for a higher tax, others warn of possible negative outcomes. Rahi Abouk, a professor at William Paterson University in New Jersey, co-authored a study on e-cigarette taxes in the United States. The study found that a $1 increase in e-cigarette taxes led to a 12 percent decline in e-cigarette use but also resulted in a rise in conventional cigarette smoking.

“We noticed that the use of conventional cigarettes goes up after states adopt electronic cigarette taxes,” Abouk noted.

To mitigate this unintended consequence, the federal government has also increased the tobacco tax, effective April 2024. This raises the total tax by an additional $5.49 per carton of 200 cigarettes. Despite this, Abigail Friedman, an associate professor of public health at Yale University and co-author of the study with Abouk, expressed concerns. “The increase on e-cigarettes is substantive,” Friedman said. “But the concurrent increase on cigarettes is very small.”

As the new tax takes effect this summer, its real impact on vaping rates and overall public health remains to be seen. The federal government’s dual approach of increasing taxes on both vaping and tobacco products reflects a comprehensive strategy to reduce nicotine addiction among Canadians, especially the youth. However, the balance between discouraging vaping and not inadvertently promoting smoking will be crucial in achieving the desired public health outcomes.