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Canada's Vaping Policy: Hazy Logic?
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In Part 1 of this Series, we explored CRA’s recent increased taxation and audit activity in Canada’s Vaping Industry. In Part 2 of this Series we explored Health Canada’s imminent ban on flavoured vaping products. These three initiatives have created an unhappy trifecta that may signal major business difficulties for many vaping manufacturers, importers and retailers in 2025, and in our final Report, we raise concerns about the Government’s policy choices.
The Hazy Logic of Canada’s Regulatory Policy
One the one hand, Health Canada’s expected ban on flavoured vapes is focused on protecting vulnerable citizens (youth) and is laudable. Similarly, CRA’s continued levels of high taxation in this industry help support Canada’s massive spending levels, helping reduce the significant debt we are already leaving to future generations. At this level these policies seem to make sense. On another level they also look rather suspect.
On that front, let’s start by saying that we are not here to proclaim vaping safety. In fact, the Centers for Disease Control (“CDC”), often viewed as the gold standard in health agencies, confirms that vaping aerosols can contain cancer-causing chemicals. While there is no evidence that currently links vaping to cancer, the CDC has also tracked 2,807 hospitalizations and 68 deaths to E-Cigarette or Vaping-Associated Lung Injury (EVALI). (That figure is for the U.S., and to the end of February 2020.) But these 68 deaths from Vaping seems to positively contrast to the American Cancer Society’s (“ACS”) estimates of 125,070 deaths smoking related deaths in 2024 alone.
While we are no statisticians, the math on that seems to indicate a 99.5% reduction between vaping and smoking deaths, and that seems to provoke some interesting regulatory policy questions.
Revenue Creating Hazy Policy Choices
One possible explanation for this hazy logic may lies in government revenue from taxing the Vaping Industry. For example, if the well-being of youth were the only concern, why not implement that flavour ban three years ago when first introduced? Better yet, if the health of Canadians is of primary concern, why not reduce taxation on vaping products completely – to create a much higher cost for the much deadlier smoking? And keep it that way until smoking is reduced to acceptable levels (if there are acceptable levels)?
Is the government’s reticence to prefer vaping to smoking because of an addition to vaping tax revenues? That suspicion remains!
Takeaways
When even the CDC’s own data appears to have concluded that vaping products like e-cigarettes provide a net “benefit” to some adults who smoke (if used as a complete substitute for all smoked tobacco products), one is left to wonder why Canada is not trying to establish vaping as the preferred tax-free alternative to smoking.
Don’t get us wrong: We are NOT advocating for either vaping or smoking, but we are asking about Canada’s policy decisions affecting the former.
We also do want to expressly acknowledge the clear dangers of BOTH vaping and smoking at the same time, with ACS research concluding that:
- People who both smoke cigarettes and vape are 4 times more likely to develop lung cancer than people who only smoke;
- People diagnosed with lung cancer were 8 times more likely to have both smoked and vaped than people without lung cancer.