With the popularity of vaping increasing steadily, the federal government, along with provincial governments, has imposed excise taxes on vape liquids entering the market. The claim is that these taxes aim to increase retail prices to deter underage vaping in Canada.
While many are on the fence about whether this will work as intended, some are concerned it’s a tax grab for the government to get a piece of the pie, so to speak, and recover thier ever-declining tobacco tax revenues. Time will tell what works and what does not as Canadians brace for another increase, with more to come in the future.
The excise duty, or "Sin-Tax," will not be applied to hardware unless it comes with e-liquid. Some examples of those combined products include disposable vapes and closed pod systems. Unlike sales tax (GST/PST), the excise taxes will comprise both federal and provincial portions applied at the manufacturing level, essentially hidden from the retail end-user.
Federal Excise Vaping Tax
2024 brought us an initial federal excise tax on vape liquids sold throughout Canada. The formula for this initial excise tax was $5.00 for the first 10ml of liquid and then $2 for each additional ml of the product. So, 30mL bottles would incur a $7.00 federal excise tax, and 60mL bottles would incur a $10.00 excise tax.
The Revised Federal Excise Tax of 2024
July 1st, 2024, saw a percentage increase in the existing excise tax. So, for example, a 30ml bottle that normally incurred a $7.00 excise tax would have an increase of 12% for a total of $7.84, whereas a 60mL bottle would incur an additional $1.20 (12%) on top of the original $10.00 for a total of $11.20.
New Provincial Excise Vaping Tax
On January 1st, 2025, the provincial government of Manitoba, along with the remaining Canadian provinces, will impose a provincial vaping excise tax matching the existing federal vaping excise tax. A 30ml bottle that incurs a $7.84 excise tax will be doubled for a total of $15.68 excise, whereas a 60ml bottle that incurs a $11.20 excise tax will be doubled for a total of $22.40 excise.
Below are some examples with comparisons between 2024/2025 of overall price increases.
| Vape Product Volume | Base Price | Federal Vape Excise | New Provincial Vape Excise | GST/PST | Total |
| 20mL eLiquid (Average Disposable) |
$26.27 | $6.72 | $6.72 | $4.47 |
$44.48 (2024 - $36.95) |
| 30mL eLiquid | $19.15 | $7.84 | $7.84 | $4.18 |
$39.01 (2024 - $30.23) |
| 60mL eLiquid | $24.79 | $11.20 | $11.20 | $9.98 |
$52.85 (2024 - $40.31) |
Conclusion
Until March 31st, 2025, transitional provisions will allow for the sale of qualifying vaping products that entered the duty-paid market without provincial excise stamps prior to January 1st, 2025. As of April 1st, 2025, the new excise tax regulations will take full effect for all vaping products with no exceptions.
Until that time, and subject to availability, Cloud Barista will work diligently to avoid stocking provincially stamped vaping products for as long as possible. Unfortunately, many vape brands with federal-only excise applied will become unavailable long before the March 31st, 2025, deadline.
All in all, even with the rise in federal excise tax and the implementation of the provincial excise tax, vaping remains a much healthier alternative and substantially cheaper compared to combustable tobacco smoking.
- Team Barista
