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Ottawa’s Tobacco Tax Should Reflect The Relative Risks of Different Products

In its budget statement, the federal government announced that it would introduce a special excise levy on vaping products in 2022. A recent paper argues that the federal government should tax each product and category according to its health risks.

Diane Caruana

October 22, 2021

Given the relative safety of vapes, if teens are vaping instead of smoking, this is still a victory for public health.

Currently no such tax is imposed, even though several provincial governments have introduced different types of taxes on vaping products. A 2019 Ottawa Public Health study had reported that one in four high school students had tried vaping. “You’ve got a product that is tasting like cherries and root beer and strawberries being sold, and youth are picking it up,” said Marino Francispillai, the health unit’s program manager for school and community mental health and wellness.

According to the study, 23% of high school students in Ottawa have tried e-cigarettes, whilst 48% believe that vaping doesn’t pose a health risk. The OPH study also indicated that by comparison, only 6% of the students have smoked a cigarette in the last 12 months. “It’s become a bit of an epidemic at this point,” Francispillai said.

Public health experts had explained that these figures need to be taken in the right context. Firstly “trying” does not mean regular use. Secondly, given the research indicating that the level of particulate matter found in e-vapour is insignificant to our health and at least 95% lower than the levels found in cigarette smoke, if teens are vaping instead of smoking, this is still a victory for public health.

A recent paper published by the C.D. Howe Institute, argues that the different risks of any products should be reflected in the taxes imposed on them. “Relative tax rates should reflect our best understanding of the health risks associated with each nicotine- or tobacco-based product. A well-structured set of taxes should aim to encourage smokers to quit or switch to reduced-risk products, but not be too high to drive an illegal market.”

Taxes on safer alternatives should be lower

An article on The Globe and Mail by the study author himself, explains that tobacco and nicotine are viewed by as sin goods, due to their risky nature, and are loosely associated with alcohol, cannabis, gambling and so forth. Vaping and heated tobacco products need to be moved from this position to one which reflects their potential in reducing harm and help people quit smoking.

“Vaping products form the largest component of what we now call alternative nicotine delivery systems (AND systems). Other AND systems come in the form of tobacco- and nicotine-based wet snuff (small pouches that deliver nicotine when the pouch is placed in the mouth) and heated tobacco products (HTP). An HTP is a small tobacco “stick” that is heated rather than burned when placed in a special battery-driven device. Both delivery systems are already subject to a federal excise levy. So, it is natural that we get around to taxing vaping liquid.”