Health officer says e-cigarettes shouldn’t be taxed like tobacco

By Michael Gorman

Source: TheChronicleHerald.ca

The provincial government is regulating e-cigarettes much like tobacco products but has no plans to tax them the same way.

“I think that taxing e-cigs like tobacco products is completely inconsistent with our basic position which is that, based on current information, we are OK with e-cigs being available for adults as a tobacco-use reduction or cessation aid,” Dr. Robert Strang wrote in an email in February to the associate deputy minister of health and wellness.

The email, along with other information, was released in response to a freedom of information request from the Finance Department.

Strang, the province’s chief public health officer, went on to say that taxing e-cigarettes the same as tobacco products would create a disincentive for people to use them and “would generate a strong and very public push back from the vaping community much like we had on banning flavoured e-juice.”

Last fall, when the province introduced legislation to ban flavoured tobacco, it set off a firestorm of controversy for trying to include e-juices, used in e-cigarettes, in the ban while excluding menthol. Among other things, e-cig users said the devices helped them kick smoking; they also decried the government’s lack of consultation.

Eventually, the government gave in to public pressure and split up the bill: this spring it passed the flavour ban, which included menthol, but not e-juices; legislation passed last fall prevented the use of e-cigarettes in public indoor places and prohibited their sale to people younger than 19.

A government spokesman confirmed Tuesday there are no plans to institute a tax on e-cigarettes or e-juices.

The matter has been discussed at Treasury Board, however.

Released information slides note the Revenue Act only applies to tobacco products so there is no legislative or administrative mechanism in place to tax e-cigarettes. It also notes that since e-cigarettes are normally a one-time purchase, a tax would need to be applied to the e-juices.

The information notes that “other provinces (are) starting to see significant reductions in tobacco tax revenue as usage of e-cigarettes go up” and “it is anticipated that within 10 years, e-cigarette usage will exceed tobacco cigarette use.”

“In medium term, Nova Scotia could have substantially lower tobacco tax revenues.”

The province took in $206.3 million in 2012-13 from tobacco sales. That increased to $217.2 million in 2013-14 and is forecast to be $206.1 million when the books are closed on 2014-15. The 2015-16 budget estimates tobacco revenue at $217.8 million.

There is no breakdown of the products that make up those figures, but it stands to reason that totals will go down in future years given the new flavour ban.

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