Monday, December 23, 2024

Ontario’s vape taxes go up on July 1. Here’s what to expect | CBC News

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Taxes on vaping products created in or imported to Canada are set to increase July 1 — but not everyone is convinced they’ll change consumer behaviour.

According to the 2024 federal budget, the increase to the excise tax is an attempt to discourage vaping among Canadians, with the country’s tobacco strategy aiming to cut tobacco use to less than five per cent of the population by 2035.

Statistics Canada says young adults are much more likely to vape than smoke.

A 2022 survey by the agency showed almost half of Canadians aged 20 to 24 have tried vaping, with one in 10 saying they vape every day.

“Increasing tobacco taxes is the most effective strategy to reduce smoking, especially among youth,” said Rob Cunningham, senior policy analyst for the Canadian Cancer Society, in a press release after the changes were included in the budget.

Sahil Marsoniya works at Ottawa Vape and says he’s seen customers buy five or six vapes in one transaction to prepare for the expected price hike. (Isabel Harder/CBC)

‘They’re all addicted’

But even with the tax hike, vape store employee Sahil Marsoniya isn’t convinced business will slow down.

Marsoniya said customers at his store, Ottawa Vape, have been stocking up on supplies before it’s implemented.

Over the past week, several customers came in to purchase five or six vapes at a time, he said.

“They’re all addicted,” he said on Sunday. “They’ll lose more money, but they will not stop.”

Waleed Ramadan sells vapes at Mr. Smoke in Ottawa’s ByWard Market and said people will keep vaping as long as they can afford it.

“Stop them vaping? I doubt it,” he said of the tax. “It’s nicotine. It’s not like you’re just going to stop.”

How much will the tax increase?

The 2024 budget proposed increasing the federal tax by 12 per cent across the country, with provinces given the option to match that hike.

Vaping products are taxed based on their volume. Before today, manufacturers had been federally taxed $1 per two millilitres for the first 10 millilitres of liquid, and then $1 for every 10 millilitres after that.

For example, a product that’s only federally taxed at $1 on June 30 will be taxed at $1.12 on July 1.

Ontario announced its own provincial excise tax in 2023 that also comes into effect July 1, and opted to match the federal amount, meaning a manufacturer that pays a federal tax of $1.12 will pay a combined total of $2.24.

The 2024 federal budget estimates the taxes will increase federal revenue by $310 million over the next five years.

Some vapers considering a switch

Consumers may not see these price increases immediately, however, as it’s an excise tax placed on manufacturers at the time of sale or import.

The federal government has given manufacturers a 90-day window beginning July 1, during which time they can sell vape products produced or imported before the new tax came into effect without having to apply it.

After that stock has been sold, many manufacturers will likely incorporate the new taxes into their prices — and consumers could eventually see the cost passed along to them.

Ottawa resident Dylan Colton said he might consider quitting vaping once that happens, but not nicotine altogether.

To save money, Colton said he might switch to nicotine pouches.

“I’m probably going to convert to Zyns,” he said.

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