There's a new vaping tax coming, budget reveals

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New Brunswick will double the tax on vaping products at the end of the year.

A single line in Tuesday’s budget signalled the Higgs government will now take Ottawa up on its offer to double the federal tax on e-cigarettes.

Until Tuesday, New Brunswick was the only province in the country that had not either formally indicated it would sign an agreement with Ottawa or introduce its own tax provincially.

But the timing of the decision means that New Brunswick will miss out on millions in revenue it otherwise would have received, if it had gotten an agreement in place sooner.

The 249-page budget document includes a single line item under revenues now forecasting $1 million from a “vaping duty.”

In his budget speech inside the provincial legislature, Finance Minister Ernie Steeves noted that the prevalence of youth vaping “remains a significant concern in the province.

“Almost 13 per cent of high school students in New Brunswick report vaping daily,” Steeves said, while noting that the province has already implemented a flavoured vape ban while intending to strengthen vaping enforcement.

“As a complementary measure, I am pleased to announce the government’s intent to enter into a co-ordinated vaping product taxation agreement with the federal government,” Steeves said.

The feds began collecting a vaping tax last year, and then asked provinces to do the same in efforts to double the duty, while offering to collect the money for them and then remitting half the proceeds back to the province where they were collected.

The province says /the deal with Ottawa will begin on Jan. 1, 2025.

The federal tax is one dollar for every two millilitres of e-liquid sold in a bottle, pod, or cartridge up to 10 mL, and then another dollar after that.

It means vapers pay an extra $7 in taxes on a standard 30 mL bottle of vape juice.

When the deal with Ottawa kicks in, those duties double.

Four provinces – Newfoundland and Labrador, Nova Scotia, Saskatchewan, and British Columbia – have already put in place a provincial e-cigarette tax.

They’re collecting that revenue already.

Meanwhile, Ontario and Quebec will see the feds start collecting tax for them in July this year.

Steeves acknowledged that New Brunswick would now be “part of a second wave of participating provinces and territories” in January.

In an interview, Canadian Cancer Society lawyer and senior policy analyst Rob Cunningham said it means New Brunswick can expect to collect $4 million annually from the tax over a full year, given that it anticipates to collect $1 million in January, February, and March, the last three months of the fiscal year.

“It’s very positive that the New Brunswick government is going to participate,” Cunningham said. “This is important to reduce youth vaping.

“We know that youth are especially responsive to a higher price and right now e-cigarettes are far less expensive than cigarettes.”