Understanding Taxes on Cigarettes in Canada

Cigarettes have become a social and economic burden in Canada due to their health risks and financial implications. However, with the increasing demand for tobacco products, the Canadian government has put in place taxes and regulations which aim to discourage smoking. Taxes are one of the most effective ways to regulate the use of tobacco products in the country. However, understanding the taxes on cigarettes can be confusing to many Canadians. This article seeks to provide a clear and concise understanding of taxes on Canadian cigarettes in Canada.

The federal government and provincial governments impose taxes on cigarettes. The federal government imposes a tax known as the Federal Tobacco Tax. The tax is currently set at $0.5275 per cigarette or $21.10 per pack of 40 cigarettes. The tax is collected at the manufacturing level; thus, cigarette manufacturers are responsible for paying the tax to the government. In addition, the federal government imposes an excise tax on cigarettes. The excise tax is $0.02379 per cigarette or $0.9516 per pack of 40. The excise tax is also paid by the manufacturer.

Each province and territory has its own tobacco tax which is imposed on the sale of cigarettes. The tobacco tax varies across provinces and territories. For instance, in Ontario, the tax is $0.215 per cigarette or $8.60 per pack of 40 cigarettes. In Quebec, the tax is $0.1425 per cigarette or $5.70 per pack of 40 cigarettes. Retailers are responsible for collecting and remitting the provincial tobacco taxes to the government. The taxes are included in the retail price of cigarettes.

The federal and provincial taxes on cigarettes account for a significant portion of the retail price of cigarettes. For instance, in Ontario, taxes make up around 60% of the retail price. In addition to the taxes, there are other charges which retailers impose, including a markup, which can vary depending on the retailer. This means that the price of cigarettes can vary significantly across provinces and territories.

The primary aim of taxes on cigarettes is to discourage smoking. High cigarette prices due to taxes have been shown to reduce demand for cigarettes. According to research, a 10% increase in cigarette price leads to a 4% reduction in demand for cigarettes. In addition, taxes on cigarettes provide a source of revenue for the government. However, it is worth noting that the government uses revenue from cigarette taxes to fund anti-smoking campaigns, healthcare, and other public services.

It is also worth noting that the government imposes taxes on both imported and domestic cigarettes. The taxes imposed on imported cigarettes are the same as those imposed on domestic cigarettes. This makes it difficult for smugglers to bring in cigarettes from other countries. In addition, the government has implemented measures to combat the smuggling of cigarettes, including increasing the penalties for offenders and increasing border security.

Taxes are an unavoidable part of life, and it’s hard to go a day without paying some form of tax. One form of taxation that is often misunderstood is taxes on cigarettes, particularly in Canada. In an effort to curb smoking and improve public health, Canadian provinces have implemented various taxes on cigarettes. In this post, we’ll delve into what these taxes are, how they work, and what impact they have on smokers in Canada.

To understand taxes on cigarettes in Canada, it’s important to first understand how cigarettes are taxed. In Canada, cigarettes are subject to both federal and provincial taxes. The federal government imposes an excise tax on cigarettes, which is currently $0.60478 per cigarette or $12.10 per carton of 20 cigarettes. On top of this federal tax, Canadian provinces also levy their own taxes on cigarettes. The amount of provincial tax varies by province, with some provinces like Quebec and Northwest Territories having the highest taxes in the country.

The purpose of these taxes is mainly to discourage smoking and to cover the costs of related health care. By increasing the cost of cigarettes, governments hope to incentivize smokers to quit and prevent young people from picking up the habit in the first place. The revenue generated by these taxes is used to fund various health initiatives, such as anti-smoking campaigns, medical research and to cover the costs of tobacco-related illnesses.

While taxes on cigarettes may seem like a burden for those who smoke, research has shown that these taxes can be effective in reducing smoking rates. The World Health Organization (WHO) estimates that increasing the price of cigarettes by 10% can lead to a 4% reduction in smoking among adults and a 7% reduction among youth. Additionally, these taxes can save lives and reduce health care costs. In Canada, smoking-related illnesses like lung cancer, heart disease, and stroke are responsible for more than $17 billion in direct health care costs annually.

However, some critics argue that these taxes disproportionately affect low-income individuals, who may be more likely to smoke and less able to afford increased cigarette prices. There are also concerns that high taxes on cigarettes could lead to an increase in the black market for tobacco products, where unregulated and potentially dangerous products are sold outside of government control.


In conclusion, taxes on cigarettes in Canada serve both health and economic purposes. The taxes aim to discourage smoking and reduce the costs associated with smoking-related illnesses. Understanding the taxes on cigarettes is essential for Canadian smokers as it can help them make informed decisions about their smoking habits. The government continues to impose taxes on cigarettes to encourage smokers to quit and reduce the number of smokers in the country. The implementation of taxes on cigarettes is a win for public health in Canada, and the government should continue to enforce these taxes.

In conclusion, taxes on cigarettes in Canada are an important part of the country’s public health strategy. These taxes generate revenue for health initiatives and have been shown to be effective in reducing smoking rates. However, it’s important that these taxes are not overly burdensome on low-income individuals, and efforts should be made to prevent the black market for tobacco products. Whether you’re a smoker or not, it’s important to understand how these taxes work and the impact they have on public health in Canada.

Jason Holder

My name is Jason Holder and I am the owner of Mini School. I am 26 years old. I live in USA. I am currently completing my studies at Texas University. On this website of mine, you will always find value-based content.

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