Manitoba to join other provinces in excise tax on vape products

Manitoba is preparing to join other provinces and increase the tax on vaping products next year as a way to discourage their use, especially among young people.

The NDP government is planning to double an existing federal excise tax on the products in the spring budget, with an eye to implementing the levy by July 1.

“A vape tax is one way for us to be able to send a stronger message to young people in particular, but all Manitobans, about the dangers of vaping,” Premier Wab Kinew said.

“And it’s another step to bring Manitoba in line with what other provinces are doing.”

On a full-year basis, the excise tax is estimated to bring in $11 million, Kinew said, and the money will help pay for anti-vaping and anti-smoking programs.

The federal government implemented its most recent levy last fall, and some provinces have introduced their own. Saskatchewan announced in 2021 it would apply a 20-per-cent provincial tax.

Ontario announced last month it would double the federal excise tax, as Manitoba is planning to do. The combined tax would see manufacturers and importers paying $2 per two millilitres of vaping liquids for the first 10 millilitres, then $2 per 10 millilitres for volumes above that.

The Manitoba Lung Association welcomed Kinew’s plan.

“We know that particularly youth are very price-sensitive, and anything that reduces the access by youth is very important,” Neil Johnston, president of the Lung Association of Manitoba, said.

The vape tax is one of a handful of tax changes slated for Manitoba in 2024.

Kinew’s New Democrats, elected Oct. 3, quickly passed a law to temporarily suspend the provincial fuel tax for at least six months starting Jan. 1. as a way to help motorists with inflation. 

Income tax cuts and a reduction in a payroll tax paid by employers, announced by the former Progressive Conservative government, are also set to take effect Jan. 1.

One tax change that is no longer on the radar is an increase on high income earners. In the 2019 election campaign, Kinew’s New Democrats promised to add a new tax bracket with a higher rate on incomes over $250,000 a year. 

The NDP did not revive the promise in the most recent election campaign, and Kinew said the government is focused on the tax changes already in the works for the new year.

“We’re just maintaining predictability for people who’ve already done their tax planning or financial planning for the year to come.”

This report by The Canadian Press was first published Dec. 26, 2023.