Canadian Excise Tax & Vaping Laws

Posted by Serge Iskedjian on

Update 2024:  Federal & Harmonized Excise Taxes

What is Changing with the Federal Tax?

In a recent announcement by the CRA on May 14th, 2024, it was declared that all vaping products with federal excise stamps will undergo a 12% tax increase starting July 1st, 2024. This adjustment will affect the current federal excise tax rate and will also be applicable to any upcoming provincial tax rates.

The federal excise stamps will remain the same, so there will be no impact on your sellable inventory. However, you should familiarize yourself with these changes to maintain your margins and so that you can keep your customers informed.

What is the Provincial Excise Tax?

The provincial excise tax is a new tax implemented on vaping products, containing e-liquid, by the Federal government with invitation for provinces to join. Ontario, Quebec, Nunavut, and the Northwest Territories have chosen to participate. This tax will be applied in addition to the new federal excise tax pricing structure on vaping products.

Tax Structure Breakdown

The provincial excise tax rate is equal to the federal rate, effectively doubling the tax in participating provinces. The 12% increase recently announced will impact both the federal and the provincial tax rate.

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GENERAL INFO:

At this time in Canada, electronic cigarettes (a.k.a. e-cigarettes, e-cigs, vapes, vaporizers) are 100% legal for individual use.  There are currently no regulations as to where you can use them, with a few exceptions.  There are, however, several municipal and provincial vaping regulations that have been created by municipalities and provinces so we will break down the legalities of vaping per province.

Federal:

The federal government has not imposed any restrictions regarding the use of e-cigarettes, or the sale of e-cigarettes and vaping accessories in Canada.  All regulations have taken place at a provincial or municipal level in Canada.


Ontario:

You must be 19 to purchase e-cigarettes and vaping supplies.  Similar to tobacco products, it is illegal to sell e-cigarettes and vaping supplies to anyone under the age of 19.  It is required by law for retailers of the vaping industry in Ontario to receive proper government approved identification from the customer before selling them e-cigarettes or supplies. A more recent by-law states any person under the age of 19 is not permitted entrance into a vape shop; we must note that many responsible vape shops in Ontario have already been enforcing this on their own for sometime.

Under the Smoke-Free Ontario Act, 2017, you can not vape in any enclosed workplace, enclosed public place, and all other areas designated as smoke/vape free.  If you vape where it is not allowed, you may be charged with the offence and subject to a fine if convicted. The most recent regulation that has taken place in Ontario with regards to vaping inside of a specialty vape shop (current & new retail establishments must now apply for a specialty vape shop license) is as follows: Using an electronic cigarette (including inhaling & exhaling vapour) is permitted if the following conditions are met:

  • Use is for the purpose of sampling a vapour product
  • No more than two persons may sample a vapour product at the same time
  • Specialty vape stores must provide fresh, one-time use disposable mouthpieces for sampling, unless the electronic cigarette is the personal possession of the person sampling a vapour product.
  • The electronic cigarette must not contain Cannabis, Tobacco (i.e. Heat-Not-Burn Tobacco Products), or a Controlled Substance.

ONTARIO VAPING LAW UPDATE NOVEMBER 2019:  The Ontario government has just proposed an advertising ban for vaping products in convenience stores and gas stations.  Under these new laws, vaping ads will only be allowed in specialty vaping stores where all customers must by 19+ to enter.


Alberta:

Alberta has no official regulations regarding the use of e-cigarettes, with the exception of the bi-law in Calgary.   There official stance is basically ‘beware because they have not been tested’ (Source).
Calgary:  In June of 2015, the Calgary City Council passed a by-law banning the use of e-cigarettes and vaporizers everywhere the use of tobacco cigarettes is currently banned.  They made an exemption for Calgary Retail Vape Shops to allow customers to test & try e-cigarettes in their stores.   This only applies to “Stand alone, enclosed retail vape shops (Source).
This means there are currently no laws against vaping inside, including bars, restaurants, hotels, etc. unless specified by the individual establishment.  It is always a polite, and generally a good idea, to ask for permission before using your vape in any indoor public area. Exception: City of Calgary.

Law Update:  No provincial legislation, but some municipalities, (i.e. Cold Lake, Red Deer, Bonnyville) have by-laws to restrict e-cigarette use in public places.

ALBERTA VAPING UPDATE, OCTOBER 2019:  Alberta Heath Minister Tyler Shandro announced that the province will review their Alberta Tobacco and smoking regulation act with its aim to regulate vaping.  The review was started November, 2019.  It will most likely look at promotions and advertising of vaping products in Alberta.  At this time the tobacco laws in Alberta do not discuss vaping.  –citation


British Columbia

In March of 2015, the British Columbia Government proposed legislation (British Columbia Bill 14, Tobacco Control Amendment Act, 2015) which at its beginning focused on banning e-cigarettes from being used indoors, banning the sale of e-cigarettes to anyone under the age of 19, and restricting advertising or promotion of e-cigarettes.   It was proposed to be in affect February 2016.

Law Update: Tobacco and Vapour Products Control Act

Date in effect: Sept. 1, 2016

Under this law, the following are banned:

  • Sale and supply to minors (under 19);
  • Sales wherever tobacco sales are banned;
  • Vaping anywhere (inside public and work places) smoking is banned with the exception of vape shops where minors are not allowed to enter; with a maximum of two people sampling a product at the same time;
  • Vaping in cars with children under 16;
  • Vaping within six metres of doors, air intakes and open windows;
  • Any kind of promotion in stores except point of sale showing availability and price, including duty free shops;
  • All point of sale display except where minors are prohibited, permits vending machines in adult only venues, including duty free shops;
  • Kindergarten to Grade 12 school sites at all times;
  • Ban on health authority property unless in designated areas.

BRITISH COLUMBIA VAPING LAW UPDATE:  NOVEMBER 2019:  Health Minister Adrian Dix is to introduce new legislation in British Columbia to increase the sales tax on vaping products from 7% to 20%.  He is also considering allowing flavors outside of tobacco to be only sold in specialty vape shops.  Furthermore, he would cap the legal level of nicotine to 20mg/ml, and increase funding for youth vaping awareness programs in British Columbia. The legislation is set to come into effect January 1st, 2020.   – citation


Manitoba

In Manitoba, Bill 30 was introduced into parliament for its 1st reading.  It is called the Non-Smokers Health Protection Amendment Act (e-cigarettes).    This bill proposes the following:  E-cigarettes could be used only in places where smoking is permitted, with the exception of vape shops.   There is also no sale of e-cigarettes allowed to anyone under the age of 18.  E-cigarettes may be used in designated rooms in group living facilities and hotels similar to present exemptions for smoking.  Customers may use e-cigarettes to test or sample products in vape shops where the sale of e-cigarettes is the main business activity.

There would also restrictions in place which are ‘similar to restrictions presently in place for tobacco products’ regarding to the display and advertising of e-cigarettes.  This change was an amendment to the ‘Non-Smokers Health Protection Act’

Bill 30 achieved Royal Assent on November 5, 2015 and is currently in proclamation.  This means it is ‘almost’ enforceable. Once the regulations are proposed and passed, it will be given an effective date for enforcement  (Source).

The most recent information regarding Bill 30 is with Minister Crothers in December 1st and is as follows:

“You are correct that while Bill 30 was passed and received Royal Assent on November 5, 2015, it has not yet come into force.  The in force date will be set once the regulations, which will outline specific requirements for some of the issues you mentioned, including signage, have been developed.

As part of the regulation development, Manitoba Health, Healthy Living and Seniors (MHHLS) will consult with stakeholders, including vape shop owners.  However, a time frame for this consultation has not been determined.

Should you have any further questions or concerns about Bill 30, please contact Mr. Andrew Loughead, Manager, Tobacco Control and Cessation, MHHLS, at Andrew.Loughead@gov.mb.ca or at 204-784-3900 in Winnipeg.”

This means there are currently no laws against vaping inside, including bars, restaurants, hotels, etc. unless specified by the individual establishment.  It is always a polite and good idea to ask for permission before using your vape in any indoor public area.
Law Update:

Law: The Non-Smokers Health Protection and Vapour Products Act

Royal assent received: Nov. 5, 2015

Under this law, the following are banned:

  • Vaping in indoor public places like schools, libraries, hospitals, malls, restaurants, indoor workplaces;
  • Vaping in cars where children under 16 are present;
  • E-cigarette advertising and promotion (similar to bans on advertising on other tobacco products).

The new law also provides exemptions for vaping in the following places:

  • Where e-cigarettes are predominately sold;
  • Designated smoking/vaping rooms in hotels and group living facilities.

Nova Scotia

Nova Scotia was one of the first provinces to implement significant restrictions on vaping and e-cigarette sales in Canada.  Nova Scotia passed legislation that came into effect on May 31st, 2015.   This ban treats e-cigarettes in much the same way as tobacco cigarettes.  They must be kept out of view, unless the store does not permit minors to enter.  There is no point-of-sale promotion permitted.  There is no signage or advertising allowed outside of the store.  No selling to anyone under the age of 19.  No selling in pharmacies, or anywhere else tobacco sales are prohibited (Source).

While e-cigarettes are being treated like regular cigarettes in retail settings, they will not be taxed as a tobacco product.

Law Update:

Law: Smoke-Free Places Act (amended) and Tobacco Access Act (amended)

Date in effect: May 31, 2015

Under this law, the following are banned:

  • Sale and supply to minors;
  • Possession by minors;
  • Sale in pharmacies;
  • Vaping in any venue where smoking is banned;
  • Vaping on school property, in cars with children under 19, on restaurant/bar patios, within four metres of doors, windows and air intakes of workplaces;
  • Requirement to display age restriction signage;
  • Point-of-sale promotion. (Vape shops are exempt but there is a ban on any promotion from outside the shop.)

NOVA SCOTIA VAPING LAW UPDATE DECEMBER 2019:  Nova Scotia announces ban on all flavoured e-liquids or vaping products to come into effect April 1, 2020.  If this ban comes int effect, it will be the strongest ban of any province in Canada.  – citation


New Brunswick:

On July 1, 2015, New Brunswick Government amended two acts to include e-cigarettes.  The Smoke-Free Places Act and the Tobacco Sales Act have both been amended to include e-cigarettes.   The tobacco sales act is now called the tobacco and electronic cigarette sales act, and states the following:

  • The sale of e-cigarettes and e-juices to people under 19 years of age is not allowed and these products must be hidden from sight.
  • Smoking supplies (rolling papers, blunt wraps, cigarette tubes and filters, cigarette holders and pipes) cannot be sold to people under 19 years of age or be placed on display.
  • No one under the age of 19 may enter a vapour shop unless accompanied by an adult.
  • Most requirements for posting health warning signage have been eliminated.
  • Outdoor advertisement by tobacconists and vapour shops is not permitted and promotional material inside these shops must not be seen from the outside.
  • Restrictions on promotional materials that presently apply to tobacco in other retail shops will now also apply to electronic cigarettes and smoking supplies (Source).

Law Update:  

Law: Tobacco and Electronic Cigarette Sales Act

Date in effect: July 1, 2015.

Provisions of the act include:

  • A ban on sale and supply to minors;
  • Sales banned wherever tobacco sales are banned;
  • A ban on use in indoor public spaces and workplaces;
  • A ban on or in school property, in cars with children under 16, within three metres of patios, within nine metres of doors, windows and air intakes of workplaces;
  • A ban on promotion visible from outside retail premises; permits signage showing only availability and price, but vape shops exempted in the inside of their premises only;
  • Vape shops are allowed point of sale display.

Quebec

Since 2015 in Quebec, most of the rules on smoking also apply to vaping, including a ban on selling vaping products to people under 18. Now online sales of vaping products to people under 18 are also illegal. Delivery personnel have a duty to check that the buyer is 18 or older.

Also banned are vaping products with flavours of candy, dessert, pot, soft drinks and energy drinks.  These changes are added to existing restrictions, such as where you can’t smoke, either tobacco or electronic cigarettes.

According to Bill 44, it’s forbidden to:

  •  Allow e-cigarettes and related accessories to be seen from the outside of a shop. To prevent this, you’ll need to frost your window.
  • Communicate to consumers inappropriately regarding tobacco products displayed in the shop. This means a seller cannot communicate on the alleged benefits of vaping.
  • Advertise a vaping product whose sale or distribution is forbidden. In broad terms, ad in newspapers, posters, leaflets, Facebook posts, or on any other social network are not allowed. Likewise, it is not possible for a vape seller in Quebec to own a website that promotes its products.
  • Allow clients to test products or flavours. If you run a vape shop, you can’t allow a potential client test any products nor demonstrate how they work. Both owners and clients complain about this but it’s the law.
  •  Sell, or offer products other than those related to e-cigarettes. For instance, owners or shop staff cannot offer food or water to clients, neither for free or at a price.
  • Offer loyalty cards or any discounts or coupons.
  • Sell vaping products, to minors, nor allow their presence within the shop. The client or visitor must prove he is over the age of legal majority. If the seller doubts the age of a visitor, he must ask for ID.
  • Fail to display, in full view of everyone, on the cash registers or near them, messaging regarding the ban on the sale of tobacco to minors and the health warnings from the Ministère de la Santé et des Services sociaux (Source).

Saskatchewan
The City of Saskatoon has implemented legislation banning vaping anywhere smoking cigarettes is currently prohibited.  They added an exemption to allow vaping inside vape shops.  There are currently no provincial wide laws regarding e-cigarettes and vaping in Saskatchewan.
This means there are currently no laws against vaping inside, including bars, restaurants, hotels, etc. unless specified by the individual establishment.  It is always a polite, and generally a good idea, to ask for permission before using your vape in any indoor public area. Exception:  City of Saskatoon.

Newfoundland and Labrador
The Provincial government in Newfoundland and Labrador are currently ‘working on new legislation’ regarding vaping and e-cigarettes.  At this time no official policies are in place.
There are currently no laws against vaping inside, including bars, restaurants, hotels, etc. unless specified by the individual establishment.  It is always a polite, and generally a good idea, to ask for permission before using your vape in any indoor public area.
Law Update:

Laws: Smoke-Free Environment Act, Tobacco and Vapour Products Control Act

Date in effect: June 7, 2016

Under the law, the following are banned:

  • Sale  to minors;
  • Vaping in public places, workplaces and vehicles with children under 16.

Vaping will be allowed in designated e-cigarette rooms in long-term care facilities and certain workplaces.

The following will be banned under provisions coming into effect July 1, 2017:

  • Sale banned wherever tobacco sales banned;
  • Point-of-sale promotion, products and promotional materials cannot be visible inside, or outside the shop;
  • Restrictions on signage inside shops.

As of July 1, 2017, Vape Shops will be allowed to operate if the only business conducted is the sale of vapour products.


Prince Edward Island
Law Update:

Law: Tobacco and Electronic Smoking Device Sales and Access Act

Date in effect: Oct. 1, 2015

Under this law, the following are banned:

  • Sale and supply to minors and purchase by minors;
  • Sale where tobacco sale is banned;
  • Vaping in indoor public spaces and workplaces;
  • Vaping in cars with children under 19, on restaurant/bar patios except between 10 p.m. and 3 a.m., within 4.5 metres of doors and air intakes;
  • Vaping on construction sites;
  • Point of sale promotion and promotion visible from outside retail premises;
  • Outdoor signage;
  • Any advertising that is misleading regarding the characteristics, health effects and health hazards of these devices.

Law: Amendments to the Smoke Free Places Act

Date in effect: Sept. 1, 2015

Under this law, the following are banned:

  • Use of electronic smoking devices in indoor public spaces and workplaces, except in a designated smoking room in a long-term care facility;
  • Use in cars with children under 19;
  • Use in restaurant/bar patios except between 10 p.m. and 3 a.m.;
  • Use on construction sites;
  • Outdoor designated smoking areas that are within 4.5 metres of doors and air intakes.

PRINCE EDWARD ISLAND (PEI) VAPING LAW UPDATE – November 2019:   PEI has set in place a legislation to raise the legal age of vaping from 19 to 21.  It is set to restrict the sales of vaping products to ‘tobaccoinist shop’.  This is a location where selling tobacco products or vaping products is the primary business.   The bill would also restrict flavours, however to what extent is still not fully understood.  This legislation has now passed its 3rd reading and just needs to be given royal assent to be law in PEI.


Northwest Territories, Nunavut, and Yukon
Currently, there are no territorial or municipal regulations/laws/bills for the Northwest Territories, Nunavut, or Yukon.  There are currently no laws against vaping inside, including bars, restaurants, hotels, etc. unless specified by the individual establishment.  It is always a polite, and generally a good idea, to ask for permission before using your vape in any indoor public area.

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