Excise Tax? Never heard of her....

• Posted on 26 December 2022
• By Ev (She/Her)
• 1

Have you been hearing whispers in the street about an upcoming increase in the price of nicotine products? Unfortunately, those gossip girls are on to something. Keep reading to find out more about it!

Welcome lovely reader, you’re the next contestant on “What is the Canadian Government up to?”! We all know, and maybe don’t love (hey, lets keep it civilized in the comments) our esteemed government employees over at the hill - but what exactly have they been up to lately? Two words: Excise Tax. 

What is an excise tax? Typically, it is an additional tax imposed on certain products, services, or special-use products that have been imported or delivered in some fashion to the buyer. Some products that have been systematically taxed this way are certain petroleum products, fuel-inefficient vehicles, and automobile airconditioning units. 

You may be asking yourself, how do vape products relate enough to these automotive products to warrant an excise tax? That is the same question we’ve been pondering ourselves for a while now. Unfortunately, we don’t have a satisfactory answer :(

Why was this tax proposed in the first place? 

There are a lot of misconceptions when it comes to vaping. Most e-liquids contain nicotine and while it is a substance that does affect your biology, vaping is considered a less harmful manner to consume compared to traditional cigarettes. Our best bet is this fact alone has contributed to the reasoning, and overall acceptability of this tax in the minds of our elected officials. 

Is this one fact the whole story about vaping? Absolutely not. Did the government open a stream of communication with vapers before they made their final decision? Yes. There were forms sent out to all vape shops throughout Canada, and the patrons had the opportunity to write out why they vape, and why it shouldn’t be taxed. The most common sentiment found was that most vapers actually turned to vape as a cheaper, less harmful way of smoking. Of course, this is a very valid reason for vaping. So why are we seeing the tax move forward?

One of the main goals of this tax, according to the federal government, is to cut down on minors being able to get their hands on nicotine-related products. We’ve all been there, a year or so shy of legal age, and desperately trying to get our hands on something. However, we probably succeeded due to external help - a friend or family member just doing us a “solid”. This tax is to increase the overall price a patron has to pay in-store, which should deter those that these products are not meant for, from attempting to purchase. Basically, minors should see this raise in price and think “hmmm, me and none of my friends have enough allowance or lunch money to buy this. I’ll wait until I’m older and making more money to vape.” 

Is this tax a fair way to mitigate underage usage? If you have kids in your life, you probably think yes, and if not you probably think no. So, then why should those of us who are of legal age have to pay more? Underage usage has been a major thorn in the side of anyone working in this market; from fines to fake ID’s being presented which can lead to investigations, and immediate closure or bankruptcy. Job loss, negative economic impact, and day-to-day life interruptions can occur for anyone regardless of age if minors get their hands on vapes. Overall, minors vaping can seem like such a sheer excuse for the government to charge more money, but if you look closely, you can see that if nothing happens the collateral damage alone affects everyone who vapes. 

This is all very interesting, but how much more is this tax gonna cost me?

The easiest rule of thumb to remember when you go to a store is that the tax is adding approximately $1.00 for every 2ml of e-liquid up to 10ml. The first 10ml's of an e-liquid will have an added tax of approximately $5. Every other 10ml of e-juice present after that 10ml cutoff adds approximately another $1.00. Here’s a estimated breakdown of how this tax will affect certain options of our products: 

A 60ml bottle of Kapow Freebase Nicotine E-Liquid prior to this excise tax would cost $24.95 before taxes. The original price with GST/PST (12% in Manitoba) is $27.95. 

This juice is 60ml, so we know that a $5.00 addition applies, however, that $5.00 is only for the first 10ml of the bottle. We are left with 50ml that remains untaxed. This is where the extra $1.00/10ml comes into play. Every 10ml after the initial 10ml receives approximately $1.00. So we have 50ml left to tax at $1.00, which means an additional $5.00. If we put all of this together we get an overall additional tax of $10.00. Now comes the fun part (she says sarcastically)! 

We have a $24.95 60ml bottle of juice. The GST/PST tax still applies, which brings it to $27.95. Now we add the excise tax ($10.00) for a total of $37.95. 

A 30ml bottle of The Ratio Kiwi Strawberry Menthol Salt Nicotine prior to this increase is $22.99 before taxes. The original price with GST/PST (12% in Manitoba) is $25.75. 

This juice is 30ml, so outright that $5.00 increase applies to the first 10ml of the bottle. We still have 20ml left to tax at approximately $1.00/10ml. This is $2, so the total additional tax on this bottle is $7. If we add the $25.75 and the $7, the new total paid at the till will be $32.75.

This tax sucks, there’s no escaping that fact, but unfortunately it is necessary to keep vape stores in business. Following in the footsteps of the ban on 50mg/ml nicotine products, this tax is the next step of the plan to minimize underage usage. It seems that for the time being, our hands are tied. We hope that this tax only goes on for a little bit until we see a change in underage consumption.