Five jurisdictions join vaping duty system

Summary#

These final regulations, Regulations Amending the Excise Duties on Vaping Products Regulations (SOR/2024-211), were published on November 6, 2024. They add five provinces and territories to the federal coordinated vaping-tax system and set rules for when the extra provincial/territorial duty starts to apply on vaping products (mainly January 1, 2025, with a short transition).

What it does#

• Adds New Brunswick, Manitoba, Prince Edward Island, Alberta and Yukon to the list of jurisdictions participating in the coordinated vaping duty system under the Excise Duties on Vaping Products Regulations.

• Specifies when the additional provincial/territorial vaping duty applies, including to:

  • packaged vaping products stamped on or after January 1, 2025;
  • commercially imported and released vaping products on or after January 1, 2025;
  • vaping products imported by individuals who are residents of those places for personal use on or after January 1, 2025;
  • unstamped vaping products used for analysis or that cannot be accounted for if the last known location is in one of those jurisdictions on or after January 1, 2025.

• Treats certain products stamped before January 1, 2025 as “qualifying vaping products” for transitional purposes.

• Creates a three-month transition period from January 1 to March 31, 2025 during which manufacturers, importers or distributors may still sell federally stamped products in those five jurisdictions or move them out of those jurisdictions. After March 31, 2025, federally stamped products generally may not be sold there.

• Confirms that the regulations come into force on the date of publication (November 6, 2024), while the practical tax and stamping rules take effect as described above.

Who's affected#

• Businesses that make, import, stamp or sell vaping products in New Brunswick, Manitoba, Prince Edward Island, Alberta and Yukon — including small manufacturers, importers and retailers.
• Consumers who buy vaping products in those five jurisdictions, because product availability and labeling (stamps) will change after the transition.
• The federal tax and border agencies that run the system: the Canada Revenue Agency and the Canada Border Services Agency.
• If you are unsure whether a particular product is stamped for your province or territory, that could affect whether it can be sold legally where you live.

Why it matters#

• This aligns provincial and territorial vaping taxes with the federal framework so the same additional duty rate applies in these five places. That reduces differences between provinces and territories that might otherwise create price gaps or cross-border buying.
• The government says a coordinated system can help keep retail prices higher, which it expects could reduce youth vaping.
• Businesses will face modest one-time costs to update stamps, systems and logistics. Small businesses that import or stamp products are the most likely to notice these costs.
• After the short transition period, products sold in those five jurisdictions must bear the correct jurisdictional stamp. Selling unstamped or improperly stamped products could lead to enforcement action.