Ontario to Double Taxes on Vapes Sold in Province

Ontario, in partnership with Canada’s national government, will double the tax on all vaping products sold in the province.

The federal/provincial tax partnership scheme that was announced in 2022 allows provinces to double the current federal vape tax and keep half the proceeds, according to Vaping360.

The Canadian Vaping Association (CVA) urged the federal government to reconsider its proposal to impose an additional provincial levy, as this would effectively double the already substantial tax burden. “The CVA suggests a more equitable approach where the federal government shares the revenue generated by the current levy with the provinces,” the industry group wrote in a statement.

“With the introduction of the excise tax, depending on product type, vape products are now almost as expensive as cigarettes despite the significant reduction in risk,” the statement says.

The CVA cautioned that the increased tax may lead to more illicit trade. “Legal businesses will find it nearly impossible to compete with the unregulated market that remains largely unchecked. The consequence of such punitive taxation will be widespread business closures, significant job losses and an increase in criminal activity.”

“The CVA encourages the province to leverage its negotiating influence with the federal government to establish a fair revenue-sharing framework for the existing tax revenue. Preserving the regulated market, rather than destroying it, will lead to higher tax revenues. The additional revenue generated can be used by the province to increase enforcement resources and support educational programs for youth,” said Darryl Tempest, government relations counsel to the CVA.