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Vape Tax in Canada: Federal Excise Duty on Vaping Products Explained

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Canadian Federal Vape Tax

If you’re thinking of importing, manufacturing, or selling e cigarettes, vaporizers or other vaping products in Canada, you have to know about the excise duty (or tax as some refer to it as) being implemented by the federal Canadian government.

Canada Vape Tax
Canada Vape Tax

In Canada, an excise duty is a tax that is imposed on certain goods that are deemed harmful to society, such as tobacco and alcohol. The excise duty on tobacco products, including vapour products, is intended to discourage their use and to generate revenue for the government.

Under the Excise Act, 2001, vapour products are subject to an excise duty that is calculated based on a combination of the volume of the product and the product’s sale price. The excise duty rate for vapour products is currently set at 20% of the sale price or $0.0025 per milliliter of the product, whichever is greater. This means that the excise duty on a vapour product will vary depending on the size and price of the product.

In addition to the excise duty, vapour products are also subject to other taxes, such as the goods and services tax (GST) and the harmonized sales tax (HST). These taxes are applied to the sale price of the product, including the excise duty, and are collected by the Canada Revenue Agency (CRA).

The excise duty on vapour products is used to fund a variety of programs and initiatives, including research on the health effects of vapour products, education campaigns about the dangers of smoking and vaping, and support for smoking cessation programs. The revenue generated from the excise duty on vapour products is also used to help offset the costs of tobacco-related health care expenses, which can be significant due to the negative impacts of smoking on public health.

Vape Excise Stamps in Canada

Vape Products

The program, which came into effect as of October 1, 2022, requires importers and manufacturers to obtain excise stamps and affix them to the packages of vaping products that contain e-liquid.

Excise Duty Stamps must be obtained by importers and manufacturers of vaping products.

Importers of products that are packaged before they arrive in Canada must apply for Vaping Prescribed Persons Registration, as well as apply for the vaping excise stamp regime, obtain the stamps, and affix them to their packages before the products arrive in Canada. The same goes for importers or manufacturers of vaping products that are packaged in Canada, except that instead of a registration they must obtain a Vaping Product Licence, and affix the excise stamp to packages before the products enter the duty paid market (aka retail).

You will also need to submit a business plan, financial plan, and sales and marketing plan.

If you do not have one, please reach out to my office and i can put you in touch with a great business planner.

Thinking of importing or manufacturing vaping products? See our page here. Want to find out more about the actual stamps and their features? We have a page on the excise duty stamps.

How To Sign Up for the Vaping Excise Stamp Regime as an importer or manufacturer

In Canada, the excise stamping regime is a system that is used to ensure that all tobacco products, including vapour products, are properly taxed and that the revenue from the taxes is collected by the government. The excise stamping regime is administered by the Canada Revenue Agency (CRA) and is regulated under the Excise Act, 2001.

If you are a manufacturer or importer of vapour products in Canada and you want to participate in the excise stamping regime, you must register with the CRA and obtain a licence. To register, you will need to complete the appropriate application form and submit it to the CRA, along with any required supporting documentation.

Once you have been granted a licence, you will be required to stamp your vapour products with an excise stamp before you can sell them in Canada. The excise stamp is a small adhesive label that is applied to the packaging of the product and bears a unique serial number and other identifying information. The excise stamp serves as proof that the appropriate excise duty has been paid on the product.

To obtain excise stamps, you will need to place an order with the CRA and pay the required fees. You will also be required to maintain records of your sales and shipments of vapour products and to file regular reports with the CRA.

It is important to note that failure to comply with the requirements of the excise stamping regime can result in fines and other penalties. Therefore, it is important to carefully follow all of the rules and regulations that apply to the manufacture, import, and sale of vapour products in Canada.

Vape Tax in Canada: Federal Excise Duty on Vaping Products Explained 1
A young businessman smoking an electronic pipe in an office.

Frequently Asked Questions About Canada’s Vaping Tax

How much is the Canada vape tax?

That depends on whether your vaping product contains vaping liquids or vaping solids. If your product contains vaping liquids, the excise duty is:

$1 per 2 millilitres (mL), or fraction thereof, for the first 10 mL of vaping substance in the vaping device or immediate container
$1 per 10 mL, or fraction thereof, for amounts over the first 10 mL

For vaping solids, $1 per 2 grams (g), or fraction thereof, for the first 10 g of vaping substance in the vaping device or immediate container
$1 per 10 g, or fraction thereof, for amounts over the first 10 g

Who has to pay the Canada vape tax?

According to the federal government: “For every vaping product packaged in Canada and intended for the duty paid market, the vaping product licensee who packaged the vaping product must calculate the vaping duty to determine the amount payable to the CRA on their monthly vaping duty and information return. For vaping products imported into Canada and intended for the duty paid market, the person liable to pay the duty under the Customs Act must calculate the vaping duty to determine the amount payable to the Canada Border Services Agency (CBSA) at the time of importation.”

Are there different rates for different provinces?

No. At this time the rate is the same no matter which province or territory you are in. The excise duty needs to be paid no matter which province or territory you import them to into or manufacture them in.

Do I have to pay the excise tax on batteries and other vape parts?

If a particular vaporizer or e-cigarette product you are selling does not contain e-liquid or any other similar substances, you do not need to affix an excise stamp and pay excise duty on those products.

How do I obtain excise duty stamps for my vaping products?

When you apply to the government for your vaping licence or registration, you will also have the opportunity to apply for the vaping excise stamp regime. You obtain them via the federal government’s online system, and they will be shipped to you. From there you need to ensure the stamps are affixed to the packages of

How do I pay and remit the excise duty for vaping products?

Each month you will need to fill out B600, the Vaping Duty and Information Return, which is due by the last day of the calendar month following the reporting period. You have to file a return even if there is no duty to pay or no business transactions. If you are a Vaping Prescribed Person, you need to instead file the B601 form.
Vape Tax in Canada: Federal Excise Duty on Vaping Products Explained 2

Harrison Jordan is a Toronto-based lawyer assisting clients in the vaping / vapour product sector. To reach out to him to see how he can help, fill out the contact form today or call his office at +1.647.371.0032.

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