BC intends to introduce legislation later this month to increase the PST rate applied to vaping products from 7% to 20%, which would make BC the first province in Canada to introduce a specific tax rate related to vaping products.
The new tax rate would go into effect on Jan. 1, 2020 and would be applied to all vaping devices, the substance or juice that is used with the vaping device, and any vaping part or accessory.
The province’s goal is to restrict youth’s access to vaping products, but it will only continue to make the black market thrive, since cannabis vaping products are in high demand and readily accessible in the illicit market.
“We share the urgent concerns from health professionals and parents surrounding youth vaping in our province,” said Carole James, Minister of Finance. “Our government is committed to deterring young people from turning to vapour products out of convenience and cost. We know from taxing tobacco that teenagers respond the most to price increases and we are now introducing a similar strategy for vaping.”
Vapour Products Subject to Tax:
- Vaping devices
- Cartridges, parts and accessories for these devices
- Vaping substances
Vaping Devices
- Electronic cigarettes (e-cigarettes)
- E-hookahs
- Dry herb vaporizers
- Heated tobacco vaporizers (for use with “heat-not-burn” tobacco products or loose tobacco)
- Mods
- Pod systems
- Vape pens
Vaping devices may be single use or refillable.
Vaping Substances
Vaping substances may or may not include nicotine.
Cannabis e-juice (cannabis in a liquid form designed for use in a vaping device) is a vaping substance. However, dried cannabis flowers, cannabis extracts not designed for use in a vaping device (e.g. oils designed for oral consumption), edible cannabis products, and topical cannabis products will remain subject to 7% PST.
Examples of vaping substances are:
- E-juice (for use with pens, mods; may contain nicotine, or cannabis, or may contain no active ingredients)
- Pods (for use with pod systems)
Tax Rates
Goods and Services Tax (GST)
Generally, when GST is payable on a good on which PST is also payable, the PST amount is not included as consideration for the purposes of calculating the GST. However, with the 20% PST rate that will apply to vapour products, the PST amount will be included in the consideration for the purposes of calculating the GST. For GST information, see canada.ca/en/services/taxes