Canadian Excise Tax Information

In the 2022 budget, the Government of Canada approved an Excise Duty to be applied on vaping liquids.

An excise duty is a tax that is applied at the manufacturing level. The duty is to be paid when the product is ready to be sold. Whether the product is sold or sits on a shelf, the tax on the product has been paid. Since this duty is to be paid before the product is sold, sales tax are applied on top of it (tax the tax!). 

This framework is the same as the one used in tobacco, alcohol and marijuana products. Once the duty has been paid a stamp is applied to the product. 

The tax became effective January 1st 2023. Provinces were invited to piggyback on the tax, doubling its rate per bottle. Originally, the tax rate was set to 1$ per 2ml for the first 10ml, followed by 1$ per 10ml.

In the 2024 budget, the government decided to increase the rate by 12% on July 1st 2024. On that same date, the Provincial Governments of Quebec, Ontario, Nunavut, and the Northwest Territories joined the excise tax program.

On January 1st 2025, the following provinces will also join the Excise Tax program: Alberta, Manitoba, Prince Edward Island, New Brunswick and Yukon

Taxation rate as of Jan 1st 2025 is as follows: