The Alberta government plans for a new provincial tax on vaping products, which sparked concern among local vape shops who feared potential negative consequences.The tax aimed to discourage vaping and generate revenue for the province. It mirrored existing federal rates, charging $1 per 2 millilitres or grams for the first 10 millilitres or grams of vaping liquid and $1 per 10 millilitres or grams after the first 10.The province projected that the new tax would generate $4 million in revenue for the 2024-25 fiscal year, rising to $18 million in 2025-26. The federal government agreed to administer the tax collection at no cost to Alberta.The Alberta vape tax is set to take effect as early as January 1, 2025.This move placed Alberta among several other provinces and territories already participating in a federal-provincial coordinated vaping tax framework. Ontario, Quebec, the Northwest Territories, and Nunavut had previously implemented similar vaping taxes.The federal government raised the vaping excise duty rates by 12% on July 1, and the federal increase is in addition to the new Alberta provincial tax.However, the impending tax hike raised alarm bells for some in the Alberta vaping industry. Chris Fraser, who operated One Stop Vape Shop Superstores in Alberta since 2009, expressed deep concerns about potential unintended consequences."By increasing these taxes so high, it is going to increase the black market," Fraser warned. "It is going to increase people saying, 'Well, it cannot be that hard to make it.'"Fraser calculated that the combined federal and provincial taxes would amount to a 350% tax from the cost of production to final sale. He argued this contradicted Premier Danielle Smith's promise not to introduce new affordability taxes."This is not to protect the children tax. This is a direct affordability tax," said Fraser.Fraser pointed out that while Alberta projected $18 million in annual revenue from the tax, the federal government collected over $400 million in vaping taxes nationally last year.Fraser's primary concern was the possibility that high taxes would encourage people to make their own vaping products. He stressed the extreme danger of mishandling pure nicotine in this process."You stick your finger in pure nicotine, and you are dead before you know it," cautioned Fraser.Fraser pointed out that five Ontario vape shops he knows of had already announced closures following the implementation of that province's tax on October 1.He predicted the Alberta tax would lead to job losses and reduced government control over product safety.Current regulations have already placed strict limits on how vape shops advertise and display products. Fraser said his shops followed these rules but observed some competitors ignoring them to stay financially afloat."We are already planning, thinking of an exit plan if we have to, or have to change our store to something else if we will not be able to survive," said Fraser, explaining that his business had not fully recovered from COVID-19 pandemic-related financial losses.Instead of taxation, Fraser advocated for increased education about vaping. He argued that raising prices did not effectively stop young people from experimenting with substances, including cigarettes and cannabis."The only thing you can do is parents have to be parents and educate their kids, and schools have to make education on addiction a priority," said Fraser.Health Canada viewed the coordinated tax approach as part of a broader strategy to address vaping concerns, particularly among younger Canadians.With the tax not set to take effect until 2025, stakeholders on all sides prepared for further discussions and potential changes to the vaping tax.
The Alberta government plans for a new provincial tax on vaping products, which sparked concern among local vape shops who feared potential negative consequences.The tax aimed to discourage vaping and generate revenue for the province. It mirrored existing federal rates, charging $1 per 2 millilitres or grams for the first 10 millilitres or grams of vaping liquid and $1 per 10 millilitres or grams after the first 10.The province projected that the new tax would generate $4 million in revenue for the 2024-25 fiscal year, rising to $18 million in 2025-26. The federal government agreed to administer the tax collection at no cost to Alberta.The Alberta vape tax is set to take effect as early as January 1, 2025.This move placed Alberta among several other provinces and territories already participating in a federal-provincial coordinated vaping tax framework. Ontario, Quebec, the Northwest Territories, and Nunavut had previously implemented similar vaping taxes.The federal government raised the vaping excise duty rates by 12% on July 1, and the federal increase is in addition to the new Alberta provincial tax.However, the impending tax hike raised alarm bells for some in the Alberta vaping industry. Chris Fraser, who operated One Stop Vape Shop Superstores in Alberta since 2009, expressed deep concerns about potential unintended consequences."By increasing these taxes so high, it is going to increase the black market," Fraser warned. "It is going to increase people saying, 'Well, it cannot be that hard to make it.'"Fraser calculated that the combined federal and provincial taxes would amount to a 350% tax from the cost of production to final sale. He argued this contradicted Premier Danielle Smith's promise not to introduce new affordability taxes."This is not to protect the children tax. This is a direct affordability tax," said Fraser.Fraser pointed out that while Alberta projected $18 million in annual revenue from the tax, the federal government collected over $400 million in vaping taxes nationally last year.Fraser's primary concern was the possibility that high taxes would encourage people to make their own vaping products. He stressed the extreme danger of mishandling pure nicotine in this process."You stick your finger in pure nicotine, and you are dead before you know it," cautioned Fraser.Fraser pointed out that five Ontario vape shops he knows of had already announced closures following the implementation of that province's tax on October 1.He predicted the Alberta tax would lead to job losses and reduced government control over product safety.Current regulations have already placed strict limits on how vape shops advertise and display products. Fraser said his shops followed these rules but observed some competitors ignoring them to stay financially afloat."We are already planning, thinking of an exit plan if we have to, or have to change our store to something else if we will not be able to survive," said Fraser, explaining that his business had not fully recovered from COVID-19 pandemic-related financial losses.Instead of taxation, Fraser advocated for increased education about vaping. He argued that raising prices did not effectively stop young people from experimenting with substances, including cigarettes and cannabis."The only thing you can do is parents have to be parents and educate their kids, and schools have to make education on addiction a priority," said Fraser.Health Canada viewed the coordinated tax approach as part of a broader strategy to address vaping concerns, particularly among younger Canadians.With the tax not set to take effect until 2025, stakeholders on all sides prepared for further discussions and potential changes to the vaping tax.
