The Canadian government has proposed the country's first federal tax on vaping products in its 2022 budget. The e-cigarette tax, part of the proposed federal budget announced on Thursday, will come into effect on October 1 -- if it passes parliament in writing.

The proposed tax is substantial, and includes the option of Canadian provinces to piggyback on their own federal taxes in an equally large assessment. The central government is encouraging provinces and territories to pass equally large taxes, which will be administered by the federal tax authority.

The tax proposed Thursday would only apply to products containing nicotine, including refills and cartridges, single-use e-cigarettes and bottled e-liquids. The tax appears to include nicotine base sold for DIY. The tax does not apply to hardware that does not contain e-liquid.

The tax is $1 per 2ml for the first 10ml in any airtight container (bottle, container, etc.) and $1 per 10ml for additional liquid in the container. That would add $7 to the price of a 30ml bottle, $10 to a 60ml bottle and $14 to a 100ml bottle. There is a $4 tax on 4 packs of 1 mL pods, as each sealed pod is taxed separately, with a minimum tax of $1 for any single container.

The effective tax rate on bottled e-liquid may be higher than 100% of the retail price. It could be worse for home use. The tax for a one-liter DIY nicotine bottle is $104.

The tax burden would double for Canadians living in provinces and territories participating in the proposed harmonized vaping tax system. The proposal is attractive to the provinces because the federal government will do all the accounting and simply send each participating province a check for the tax collected. Several provinces in Canada have ready-made taxes.

Retailers will be allowed to sell duty-free products in stock from October 1 to January 1, 2023.

The proposed tax rules would allow Canadian residents who traveled abroad for more than 48 hours to bring back to Canada up to 10 vaping products containing no more than 120ml of e-liquid without paying duties.

With the Liberals without a parliamentary majority, Prime Minister Justin Trudeau is counting on a deal with the left-wing New Democrats (NDP) to provide enough votes to pass the budget.

According to CTV News, that appears to be a sure thing, meaning the tax will have to be eliminated in the parliamentary budget process.

There will be four days (not necessarily consecutive) of debate and up to three separate votes before the budget gets a final vote in the lower house of parliament. The first day of debate is Friday, April 8. CTV News said the Conservatives -- the official opposition party -- would propose an amendment, followed by a subamendment by the Quebec nationalist party Bloc Québécois.

After the first day of debate (Friday), the House of Commons will have a two-week break until April 25. A vote on the budget will take place that week or early May.

The time between now and April 25, when the House reconvenes, is a time to call and write to members of Congress to register opposition to the proposed tax plan.

The House of Commons will vote on the Bloc Québécois sub-amendment at the end of the second day of debate (on or after 25 April) and the Conservatives' amendment at the end of the third day. The third and final vote -- on the budget motion itself -- took place at the end of the fourth day.

After the budget motion is approved, the government will introduce the Budget Enforcement Bill, which goes through three readings in the House and Senate before a final vote on the completed budget.

The government's Liberal leadership said the tax proposal in the Budget was obtained from a public consultation after Budget 2021 - which could mean it was shaped by advice from the Heart and Cancer Society and some doctors' industry groups, These recommendations often force governments to impose tough vaping restrictions.

The Canadian Cancer Society issued a press release Thursday cheering the proposed tax on e-cigarettes. "The extremely low price of e-cigarettes has been a factor in the dramatic increase in youth vaping, which has tripled in four years, and has led to a new generation of young people becoming addicted to nicotine," a CCS official said.

E-cigarette users in Canada are still nervously awaiting promised federal flavor rules, which have been under scrutiny by Health Canada since September. The draft version of the rule includes a ban on the sale of e-liquids in any flavor other than tobacco, menthol and mint. The flavor ban also earned the Cancer Society brownie points.

The Canadian Parliament amended the Tobacco Act in 2018 to become the Tobacco and Vaping Products Act. The law allows Health Canada -- the country's food, drug and tobacco regulator -- to set standards for vaping products. In addition to planned flavor limits, Health Canada has set a nicotine limit of 20 mg/mL for all vaping products, mandated child-safe refillable cans, and imposed advertising limits.

The Canadian Cancer Society (CCS) applauds the federal government's tax on vaping products, which will help deter young people from vaping. As the proportion of young Canadians vaping continues to rise, CCS has been advocating for measures to protect young people from vaping, so we won't see a new generation becoming addicted to nicotine.

"We strongly support the inclusion of a national e-cigarette tax in the budget as an essential measure to reduce teen vaping," said Kelly Masotti, vice president of advocacy at the Canadian Cancer Society. The extremely low prices of e-cigarettes have been a factor in a dramatic increase in teen vaping, tripling in four years and leading to a new generation of young people becoming addicted to nicotine.

The Canadian Student Survey on Tobacco, Alcohol and Drugs (CSTADS) found that e-cigarette use among Canadian high school students in grades 10-12 increased from 9% in 2014-15 to 16% in 2016-17 to 29% in 2018 - 19.

The e-cigarette tax will take effect on October 1, 2022. The structure of the federal tax will allow provinces and territories to choose to impose taxes and receive additional income in addition to the federal tax.

On March 25, the federal government announced an additional $2 billion in Canada Health Transfer payments to address the health backlog caused by the COVID-19 pandemic. CCS is closely monitoring this investment and looks forward to working with the government to ensure significant funding is allocated to address screening, diagnostic and surgical backlogs in cancer care. CCS also looks forward to being part of the ongoing dialogue between the federal government and the provinces and territories as they work to deliver better health care outcomes for Canadians.

"Over 1 million Canadians are living with cancer, and cancer patients remain the most vulnerable in our community," Masotti added. "The government must act quickly to address all the backlog in cancer treatment and the expected influx of new and advanced diagnoses."

In addition to committing to a tax on e-cigarettes, CCS is pleased to see a commitment to developing a pharmacy care program for people living in Canada. CCS also supports the government's ongoing commitment to extend the duration of Employment Insurance sickness benefits from 15 to 26 weeks starting in summer 2022. CCS will continue to advocate on these issues to ensure that each commitment is implemented.

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