In Canada, excise duties are taxes that are imposed on certain goods that are deemed harmful to society, such as tobacco, alcohol, and cannabis. These taxes are intended to discourage the use of these products and to generate revenue for the government. The excise duties on these products are regulated under the Excise Act, 2001 and are administered by the Canada Revenue Agency (CRA).

In this article, we will compare the excise duty and excise stamping regime in Canada for vaping products, tobacco products, alcohol, and cannabis products. We will examine the specific tax rates and requirements that apply to each of these products, as well as the revenue that is generated from these taxes and how it is used.

Vaping Products Excise Duty and Excise Stamps in Canada

Judge hammering disposable vape with referee’s gavel on white table

Vaping products, such as electronic cigarettes and e-liquids, are subject to an excise duty in Canada. The excise duty on these products is calculated based on a combination of the volume of the product (the liquid/substance) 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 CRA.

To participate in the excise stamping regime for vapour products, manufacturers and importers must register with the CRA and obtain a licence. Once they have been granted a licence, they are required to stamp their vapour products with an excise stamp before they 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.

Tobacco Excise Duty and Excise Stamps in Canada

Tobacco Product Licence and Tobacco Manufacturer’s Licence

Tobacco products, including cigarettes, are subject to an excise duty in Canada. The excise duty on tobacco products is calculated based on a combination of the volume of the product and the product’s sale price. The excise duty rate for tobacco products is currently set at $0.525 per cigarette, or $10.50 per carton of 200 cigarettes. This means that the excise duty on a pack of cigarettes will depend on the number of cigarettes in the pack and the sale price of the cigarettes.

In addition to the excise duty, tobacco products are also subject to other taxes, such as the GST and the HST. These taxes are applied to the sale price of the product, including the excise duty, and are collected by the CRA.

To participate in the excise stamping regime for tobacco products, manufacturers and importers must register with the CRA and obtain a licence. Once they have been granted a licence, they are required to stamp their tobacco products with an excise stamp before they 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.

Alcohol & Liquor Excise Duty in Canada

Alcohol drinks collection in box in hand. Bottles with vodka champagne wine whiskey beer brandy tequila cognac liquor vermouth gin rum absinthe bourbon. Vector illustration in flat style

Alcohol products, such as beer, wine, and spirits, are subject to an excise duty in Canada. The excise duty on alcohol products is calculated based on a combination of the volume of the product and the product’s alcohol content. The excise duty rate for alcohol products varies depending on the type of product and its alcohol content. For example, the excise duty rate for beer

is currently set at $0.00497 per litre of alcohol content, while the rate for spirits is $0.22 per litre of alcohol content.

In addition to the excise duty, alcohol products are also subject to other taxes, such as the GST and the HST. These taxes are applied to the sale price of the product, including the excise duty, and are collected by the CRA.

To participate in the excise stamping regime for alcohol products, manufacturers and importers must register with the CRA and obtain a licence. Once they have been granted a licence, they are required to stamp their alcohol products with an excise stamp before they 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.

Cannabis Excise Duty and Excise Stamps in Canada

Close up photo of marijuana plants at indoor cannabis farm field. Hemp plants used for CBD and health.

Cannabis products, including dried cannabis, cannabis oils, and cannabis plants, are subject to an excise duty in Canada. The excise duty on cannabis products is calculated based on a combination of the volume of the product and the product’s sale price. The excise duty rate for cannabis products is currently set at $0.0025 per gram or 10% of the sale price, whichever is greater. This means that the excise duty on a cannabis product will vary depending on the size and price of the product.

In addition to the excise duty, cannabis products are also subject to other taxes, such as the GST and the HST. These taxes are applied to the sale price of the product, including the excise duty, and are collected by the CRA.

To participate in the excise stamping regime for cannabis products, manufacturers and importers must register with the CRA and obtain a licence. Once they have been granted a licence, they are required to stamp their cannabis products with an excise stamp before they 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.

Overall, the excise duty and excise stamping regime in Canada is designed to ensure that all harmful products, including vaping products, tobacco products, alcohol, and cannabis products, are properly taxed and that the revenue from these taxes is collected by the government. The specific tax rates and requirements for each of these products can vary, depending on the size and price of the product and its potential risks to public health. The revenue generated from these taxes is used to fund a variety of programs and initiatives, including research, education, and support for smoking cessation and substance abuse treatment programs.

Conclusion

It is important to note that the excise duty and excise stamping regime in Canada is constantly evolving, as the government continues to monitor the impact of these taxes on public health and the broader economy. For example, the excise duty rates for tobacco products and alcohol have been increased in recent years in an effort to discourage their use and reduce the negative health impacts of these products. Similarly, the excise duty rates for cannabis products have been adjusted in response to the legalization of recreational cannabis in Canada and the need to regulate the cannabis industry.

In addition to the excise duty and excise stamping regime, there are also other regulations and requirements that apply to the manufacture, import, and sale of these products in Canada. For example, tobacco products are subject to federal and provincial laws that regulate the marketing and labelling of these products, as well as the age restrictions for their purchase and use. Alcohol products are subject to similar regulations, as well as additional requirements related to the production, labelling, and distribution of these products. Cannabis products are subject to a complex regulatory regime that includes federal and provincial laws, as well as licensing and quality control requirements.

Overall, the excise duty and excise stamping regime in Canada is an important tool for regulating harmful products and generating revenue for the government. While these taxes can have a significant impact on the cost of these products and the behaviour of consumers, they also play a vital role in promoting public health and safety. As such, it is important for manufacturers, importers, and consumers to understand the specific requirements and obligations that apply to these products and to comply with all applicable laws and regulations.

Harrison Jordan is a lawyer based in Toronto with a focus on excise duty and excise stamps in Canada for vaping, tobacco, liquor and cannabis products. He can help you with all your legal needs in those areas.

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