Press Release: Alberta Moves to Tax Vaping Products

Alberta– February 28, 2020– The Alberta government announced that it will commence taxing some vaping devices and all nicotine vaping e-liquids at a rate of 20%. This new tax has the potential to undo serious strides the vaping industry has made to convert smokers away from combustible tobacco cigarettes and may contribute to a growing illicit market.

Despite announcing that the “we do not intend to introduce new taxes on products that are already illegal for minors to obtain”(1) early in its tenure, the United Conservative Party has switched gears and will apply the same model of taxation on vaping products that BC has.

“Taxing the industry just under two years after it has been legalized and without a thorough economic impact assessment is like clipping its wings before it has even learned to fly. If governments insist they have to implement a tax then they should do so based on the proportion of risk relative to tobacco and be cautious of the message that the application of an excise sends to the smoker,”(2) said Daniel David, president and CEO of the Vaping Industry Trade Association. “If best estimates are that vaping is 95% per cent less harmful (3) than smoking, then the tax should reflect that,” said David.

An excise tax sends the wrong message and may discourage smokers from making the switch (4) away from cigarettes. Nicotine vaping is cited as being at least twice as effective in transitioning smokers away from cigarettes as traditional cessation products (5). With 45,000 smoking related deaths a year in Canada it is imperative that the government remain focused on providing Albertans with affordable harm reduction alternatives.

The application of a 20% excise tax will also put Alberta businesses at an economic disadvantage, something the provincial government has been sensitive to with other industries. Vapers may try to evade the tax by purchasing their products from jurisdictions with a lower tax rate or from the black market. Currently, the legal nicotine vaping industry is subject to considerably high-quality control standards.

“The Government of Alberta has a duty to ensure access to affordable, less harmful alternatives to smoking” said Daniel David, president and CEO of VITA. “An excise tax on vaping, as it is imposed on tobacco, would be detrimental and counterproductive to health outcome goals.”

Media Inquiries:
Daniel David, President & CEO
Vaping Industry Trade Association (VITA)
media@vitaofcanada.com

1. https://www.cbc.ca/news/canada/edmonton/alberta-vaping-products-tax-1.5076279
2. Michael F. Pesko, Charles J. Courtemanche, Johanna Catherine Maclean. The Effects of Traditional Cigarette and E-Cigarette Taxes on Adult Tobacco Product Use. NBER Working Paper No. 26017
3. Royal College of Physicians. Nicotine without smoke: Tobacco harm reduction. London: RCP, 2016.
4. Cotti, Chad D. and Courtemanche, Charles and Maclean, Catherine and Nesson, Erik and Pesko, Michael and Tefft, Nathan, The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from Retail Panel Data (January 2020). NBER Working Paper No. w26724. Available at SSRN: https://ssrn.com/abstract=3535316
5. The New England Journal of Medicine, https://www.nejm.org/doi/full/10.1056/NEJMoa1808779