BACKGROUND AND IMPLEMENTATION CHALLENGES: As with many countries, vaping in Canada skyrocketed over the past decade. Rates among young adults are 5 times higher than older adults indicating this has become a generational problem. Research shows that many young people report vape products are easy to access, partly due to their low cost. Health groups advocated at national and regional levels for taxes on vape products to deter consumption. However, balancing harm reduction and risk prevention within government and across the country made advocacy efforts challenging.
INTERVENTION OR RESPONSE: Despite a significant amount of opposition from the vape industry who fought restrictions with a well-resourced grassroots campaign of vapers, public health advocates framed the tax as a revenue source and youth protection measure. In 2020, three provinces adopted sales and ad valorem vape taxes. This created a patchwork of pricing measures across the country and encouraged the federal government to create an excise tax whereby e-liquids would be taxed at $1 per 2 ml for first 10ml and $1 per 10 ml thereafter. The 2024 tax framework was a promising solution which standardized the tax rate across the country and doubled it ($2) if provinces bought in.
RESULTS AND IMPACT: Prevalence is expected to decline following tax implementation. The excise tax on e-liquids with a collaborative provincial component was promising but not without limitations and industry manipulation. Following the tax, the vape industry modified their products and pricing strategies which in turn meant the cost per puff of nicotine remained low. A graduated tax model meant that bulk purchasing may be incentivized.
CONCLUSIONS: Industry innovation and vape product advancements mean that the Canadian vape tax model may need to be adjusted to further increase the price of nicotine products. Measures such as device taxation, minimum pricing strategies and graduated pricing based on nicotine concentration could be considered.