The Yukon government is implementing measures to tackle a rise in vaping and reduce the number of vaping-related lung ailments. Today, the Government of Yukon tabled Bill No. 35, the Coordinated Vaping Product Taxation Agreement Act, in the Yukon Legislative Assembly.
The Bill will help target growing rates of vaping across the territory, especially among youth, by enabling the Yukon to participate in a federally coordinated vaping tax.
If passed, the Government of Yukon will enter into an agreement with the Government of Canada to double the current federal tax on vaping products sold in the Yukon. This agreement will also allow the Yukon to receive 50 per cent of the taxation revenue collected in the territory.
The Yukon government anticipates receiving $115,000 under the new Vaping Transfer in 2024–25, if this legislation passes. If fully implemented, the Yukon’s Department of Finance estimates the territory will receive approximately $780,000 in federal vaping transfers in fiscal year 2026–27.
As part of the agreement, the Yukon will not add its own tax to these products. If passed, the new tax rate will be implemented as early as January 1, 2025.
The taxation of vaping products in the Yukon, at levels comparable to those in other provinces and territories, will create a level playing field across all jurisdictions. By increasing the federal tax on these products, we expect to reduce the widespread consumption among youth, prevent nicotine addiction and help reduce incidences of vaping-related illness.
Minister of Finance Sandy Silver
The introduction of Bill No. 35 marks a significant step forward in our ongoing efforts to protect the health of Yukoners, particularly our youth, from the risks associated with vaping. By participating in the federally-coordinated vaping taxation arrangement, we are not only addressing the rising rates of vaping in our territory but also taking a proactive stance in preventing nicotine addiction and reducing vaping-related illnesses. This initiative reflects our commitment to public health and the wellbeing of our community.
Minister of Health and Social Services Tracy-Anne McPhee
In 2021, the Government of Canada announced their intent to introduce a new federal taxation framework for the imposition of excise duties on vaping products as part of their annual budget.
In Budget 2022, the Government of Canada presented details about how the tax would work, as well as initial estimates of the revenue potential for the new tax.
In a statement and subsequent government motion in November 2023, the Government of Yukon signalled its intention to join the federal coordinated vaping product taxation framework.
In 2022, one-third of youth aged 15 to 19 and nearly half of young adults aged 20 to 24 reported having tried vaping. Since the legalization of e-cigarettes with nicotine in 2018, vaping among youth has increased significantly, from eight per cent to 15 per cent. Vaping rate among young people (aged 15 to 24) is the highest out of all age groups.
Ten of the 13 provinces and territories have either joined the federal government’s coordinated vaping product taxation framework or have announced their intent to do so. This includes the Yukon. Three jurisdictions will continue to impose their own tax.
The federal tax consists of the regular federal duty and a second, supplemental, duty on vaping products. Once implemented, the tax rate will consist of $2 per 2 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.
Laura Seeley
Cabinet Communications
867-332-7627
laura.seeley@yukon.ca
Eric Clement
Communications, Finance
867-393-6482
Eric.clement@yukon.ca