Excise Duty Notice EDN80 – Vaping Products

The Government of Canada has introduced an excise duty (vaping duty) on vaping products through a new excise duty framework. The vaping duty and the vaping excise stamps apply to vaping substances that are manufactured in Canada or imported, and that are intended for use in a vaping device in Canada. The excise duty framework for vaping products came into effect on October 1, 2022.

Vaping duty means a duty imposed under section 158.57 of the Excise Act, 2001.

Vaping excise stamp means a stamp that is issued by the Minister of National Revenue under subsection 158.36(1) of the Excise Act, 2001, and that has not been cancelled under section 158.4 of that Act.

Vaping product means:

a) a vaping substance that is not contained within a vaping device; or

b) a vaping device that contains a vaping substance.

It does not include a cannabis product or a tobacco product.

The purpose of this notice is to provide information on excise stamps for vaping product licensees that intend to package vaping products in Canada or import packaged vaping products intended for the duty-paid market, as well as for vaping prescribed persons that import packaged vaping products into the duty-paid market. It also provides information on the transitional provisions that relate to the vaping stamping regime.

Excise Warehouse Licence

A vaping product licensee who manufactures and imports vaping products in Canada for export or for sale to an accredited representative, also requires an excise warehouse licence. Under the Excise Act, 2001, vaping products manufactured or imported in Canada that are packaged but not stamped, must be immediately entered into the licensee’s excise warehouse.

Vaping Product Licence – Exceptions

A person does not have to apply for a vaping product licence under the Excise Act, 2001 if they

  • are not manufacturing vaping products in Canada
  • are importing vaping products only for their personal use in quantities that to not exceed the prescribed limit of 5 units, as per section 5.1 of the Stamping and Marking of Tobacco, Cannabis and Vaping Products Regulations
  • are only importing stamped packaged vaping products into Canada (i.e., they do not manufacture vaping products in Canada). In such a case, the person must apply to the CRA to be a vaping prescribed person.

Key Takeaways

  • Application of Customs Act

New section 158.59 of the Act provides that the duties on imported vaping products imposed under new sections 158.57 and 158.58 of the Act must be paid and collected under the Customs Act as if they were duties levied under the Customs Tariff.

  • Duty on vaping products taken for use

New subsection 158.6(1) of the Act provides that if vaping products are taken for use (see commentary for the definition “take for use”) then a duty is imposed in the amount determined in respect of the vaping product under new Schedule 8 to the Act. If the vaping products that are taken for use are packaged, they are also relieved of the duty imposed under new section 158.57 of the Act.

Helpful Links

Overview of Vaping Excise Stamps

A person may apply to be registered for the vaping stamping regime at the same time they apply for a vaping product licence or vaping prescribed person registration under the Act by completing Form L601, Registration for the Vaping Stamping Regime.

For more information on obtaining a vaping product licence, refer to Excise Duty Notice EDN79, Obtaining and Renewing a Vaping Product Licence.

For more information on applying to become a vaping prescribed person, refer to Excise Duty Notice EDN81, Becoming a Vaping Prescribed Person.