Vape Tax: What You Need to Know
Last Updated: July 2, 2026
The topic of taxes can be a complicated one, especially when doing business across borders. As Canada applies its federal vaping excise duty, it is important to understand the implications of this taxation. Knowing what constitutes the duty, who has to pay it, and precisely how it is calculated will allow you to plan appropriately for this extra cost.
To help make things clearer, we’ve outlined what you need to know about Canada’s vaping excise duty. Read on to get up-to-date information so you can make sure your importation process runs smoothly.
What is the Vape Tax?
In October 2022, Canada brought into effect a federal vaping excise duty on vaping products manufactured in Canada and those imported into Canada for the duty-paid market. The vaping duty applies whether or not the vaping product contains nicotine. The Canada Revenue Agency’s general information on vaping products provides more information about which products fall under the rules.
The vaping duty is an excise duty that applies to certain goods manufactured in Canada or imported for use in the country, rather than a tariff that regulates competition or supports domestic suppliers. Canada’s excise duty system also covers products such as wine, spirits, tobacco, and cannabis.
The vaping duty applies to vaping products, which generally include a vaping substance that is not contained in a vaping device or a vaping device that contains a vaping substance. This can include e-liquid, disposable vapes, and pre-filled pod systems.
Standalone hardware that does not contain a vaping substance generally does not fall under the vaping duty simply because it can be used for vaping.
Importing Vaping Products
An importer who also manufactures vaping products in Canada or applies vaping excise stamps to imported packaged vaping products in Canada should obtain a vaping product licence. The CRA requires a licence for businesses that manufacture vaping products in Canada or apply vaping excise stamps to imported packaged vaping products in Canada.
However, an individual or business that only imports packaged, stamped vaping products into Canada for the duty-paid market generally needs to apply to the CRA to become a vaping prescribed person and obtain vaping excise stamps.
Packaged vaping products imported by a vaping prescribed person must have the required vaping excise stamp affixed before importation. If an imported vaping product intended for the duty-paid market is not stamped when reported to the Canada Border Services Agency, it must generally be placed in a sufferance warehouse for stamping. An exception applies when a vaping product licensee imports packaged vaping products for stamping in Canada.
Eligibility
Importers may be eligible to become a vaping prescribed person if they:
- Are not the subject of a receivership in respect of their debts
- Have not failed, during the five years before the application date, to comply with applicable federal, provincial, or territorial legislation dealing with the taxation or control of alcohol, tobacco products, cannabis products, or vaping products
- Have not acted to defraud His Majesty during the five years before the application date
- Have sufficient financial resources to conduct their business responsibly
- Ensure that each individual applying to be, or involved as part of a partnership or unincorporated body applying to be, a vaping prescribed person is at least 18 years old
Application and Documents
To apply, importers should complete and submit Form L603, Vaping Prescribed Person Application to their regional excise office.
The CRA also requires supporting documents, including:
- A business plan, including a business overview
- A sales and marketing plan
- A financial plan, including a source of funds
- A 12-month projection of vaping excise stamp usage
- Financial security
- Form L601, Registration for Vaping Stamping Regime
- Form L600-B, Schedule B, where applicable
The minimum financial security for a vaping prescribed person is $5,000, while the maximum is $5 million. The amount can depend on the number and type of vaping excise stamps involved.
Who has to pay the Vape Tax?
Importers bringing packaged, stamped vaping products into Canada, as well as other persons liable for the duty under the applicable legislation, are responsible for paying the vaping duty.
Packaged vaping products are products placed in the smallest package, including any outer wrapper, package, box, or other container, in which the product will be sold to consumers. CRA’s vaping duty calculation guidance explains how packaging affects the duty calculation.
For imported stamped vaping products, the importer, owner, or other person liable for the duty under the Customs Act generally pays the vaping duty to the Canada Border Services Agency (CBSA) at the time of importation.
Unpackaged vaping products imported by a vaping product licensee for further manufacturing in Canada are not subject to vaping duty or additional vaping duty at the time of importation. The duty can become payable later when the products are packaged.
If a vaping product licensee packages vaping products manufactured in Canada, the licensee generally becomes responsible for the applicable vaping duty at the time of packaging.
Calculating the Vape Tax
Duty rates, as outlined in Schedule 8 of the Excise Act, 2001, are currently:
- Vaping liquids:
- $1.12 per 2 milliliters (mL), or fraction thereof, for the first 10 mL
- $1.12 per 10 mL, or fraction thereof, after the first 10 mL
- Vaping solids:
- $1.12 per 2 grams (g), or fraction thereof, for the first 10 g
- $1.12 per 10 g, or fraction thereof, after the first 10 g
The rates increased from $1 to $1.12 effective July 1, 2024. CRA’s current excise duty rates provide the current rates for vaping duty and additional vaping duty.
For example, a 30 mL bottle of vaping liquid amounts to $7.84 in federal vaping duty:
- First 10 mL: $5.60
- Remaining 20 mL: $2.24
- Total: $7.84
A 60 mL bottle amounts to $11.20 in federal vaping duty:
- First 10 mL: $5.60
- Remaining 50 mL: $5.60
- Total: $11.20
If the vaping products are packaged in Canada, the vaping product licensee should calculate the applicable duty and report the amount payable to the CRA through the required vaping duty and information return. If the vaping products are imported and already stamped, the person responsible for paying the duty generally pays the amount to the CBSA at importation.
Additional Vaping Duty in Specified Provinces
Canada also applies an additional vaping duty to vaping products manufactured in Canada or imported when the products are intended for consumption, use, or sale to consumers in a specified vaping province.
The additional vaping duty uses the same rates as the federal vaping duty. This means a product entering the duty-paid market of a specified vaping province can incur both federal vaping duty and additional vaping duty.
As of 2026, the specified vaping provinces and territories are:
- Ontario
- Quebec
- Nova Scotia
- New Brunswick
- Manitoba
- Prince Edward Island
- Alberta
- Yukon
- Northwest Territories
- Nunavut
Nova Scotia Joins the Coordinated Vaping Duty System
Nova Scotia became a specified vaping province effective February 26, 2026. An additional vaping duty applies to qualifying vaping products intended for consumption, use, or sale to consumers in Nova Scotia beginning April 1, 2026.
A transitional period applied from April 1 through June 30, 2026. Starting July 1, 2026, vaping products sold in the duty-paid market of Nova Scotia must carry the Nova Scotia-specific vaping excise stamp.
For example, a 30 mL bottle intended for sale in a specified vaping province would attract:
- Federal vaping duty: $7.84
- Additional vaping duty: $7.84
- Total vaping duties: $15.68
The additional duty is separate from the federal vaping duty and applies because the product enters the duty-paid market of a specified vaping province.
Conclusion
Vaping is a growing industry with many taxes and regulations that importers need to keep in mind. Canada’s vaping excise duty poses several considerations for importers, as it requires careful planning and an understanding of the related regulations.
Importers must understand how vaping duty applies to their products, determine whether additional vaping duty applies based on the destination market, and meet the applicable excise stamping and licensing requirements.
With that said, the best way to support compliant importation is to consult an experienced broker who specializes in imports into Canada. By working with an experienced customs professional and making informed decisions, importers can better manage the customs and excise requirements that apply to vaping products.
How GHY Can Help You
At GHY, we are committed to helping you save money on imports. Our experienced team of customs brokers and concierges will take care of all of your import needs. Book a meeting with one of our Trade Experts, we can advise on how the Vape Tax will affect your bottom line, saving you time and money in the long run.
We also provide full-service solutions for managing, tracking, and filing all required paperwork associated with international trade. This ensures that all processes are handled efficiently and accurately so that your shipments arrive on time and comply with applicable regulations. With GHY at your side, you can rest assured that you’ll receive the best service possible at a competitive rate.
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