Bill no. 35, the Coordinated Vaping Product Taxation Agreement Act, has received assent in the Yukon Legislative Assembly.
This Bill allows the Government of Yukon to enter into an agreement with the Government of Canada to join their coordinated vaping product taxation framework. The framework will double the existing federal tax on vaping products and the Yukon will receive 50 per cent of the revenue collected in the territory. The Government of Yukon will not add its own tax on these products as part of the agreement.
By joining the national framework, the Government of Yukon aims to effectively reduce vaping rates. The framework is designed to discourage vaping among youth by targeting closed-systems like vaping pods and other single-use devices, more than reusable open systems which studies show are more popular with adults.
The new federal tax rates on vaping products are expected to apply on January 1, 2025.
Passing this Bill makes sure that we can join the federal coordinated vaping product taxation framework. Entering the federal framework is an important step in reducing vaping rates among Yukon youth. It presents an efficient, ready-made way to discourage the use of these products, while also ensuring the Yukon is part of a nation-wide approach.
Minister of Finance Sandy Silver
The Coordinated Vaping Product Taxation Agreement Act is a crucial measure aimed at reducing vaping in the Yukon, a practice associated with numerous health issues. This legislation is about protecting the wellbeing of Yukoners, especially our youth, and helping ensure a healthier tomorrow by preventing nicotine addiction and reducing vaping-related illnesses.
Minister of Health and Social Services Tracy-Anne McPhee
The Government of Canada announced plans to create a federal taxation framework on vaping products in 2021 and provided details on the framework in their 2022 Budget.
Ten of the 13 provinces and territories have joined the federal framework or announced the intention to do so, including the Yukon.
The Canada Revenue Agency will administer the tax on vaping products.
The new federal tax rate will be $2 per two millilitres, or a fraction thereof, for the first 10 millilitres of vaping substance in a product and $2 per 10 millilitres for volumes beyond that.
In 2024–25, the Government of Yukon is expected to receive $115,000 under the new Vaping Transfer.
The Government of Yukon estimates the territory will receive approximately $780,000 in federal vaping transfers in fiscal year 2026–27 once the federal framework is fully implemented.
Jordan Owens
Cabinet Communications
867-338-0615
jordan.owens@yukon.ca
Eric Clement
Communications, Finance
867-393-6482
Eric.clement@yukon.ca