Ottawa Considering Annual Charge on Tobacco Companies to Cover Costs of Regulation

Packs of menthol-flavored and non-menthol cigarettes are displayed for sale in a smoke shop, in a file photo. Mario Tama/Getty Images

The federal government is looking at regulating the tobacco industry by having tobacco manufacturers foot the bill.

The proposed cost recovery plan, detailed in the “Consultation document: Proposed tobacco cost recovery framework” released on Aug. 1, looks to introduce an annual charge to tobacco companies, as first reported by Blacklock’s Reporter.

In November 2023, changes were introduced through Bill C-59 to alter the Tobacco and Vaping Products Act. They include allowing the minister to create regulations requiring manufacturers to pay fees or charges to the government that cover the costs of regulating the manufacture, sale, labelling, and promotion of tobacco and vaping products.

Currently, the cost is $66.2 million and the government uses taxpayers’ money to cover it.

The costs include work done by various organizations, including Health Canada, the Public Health Agency of Canada, Public Safety Canada, RCMP, Canada Border Services Agency, the Canada Revenue Agency, and Indigenous Services Canada.

The newly proposed charge “would be a variable annual charge based on a manufacturer’s tobacco product domestic market share,” the document says. It would be calculated based on the previous fiscal year.

It also notes that fees or charges for vaping product manufacturers are not included at this time.

The government says the document introduces a framework that is open for discussion, noting it is expecting feedback.

“Health Canada will consider this feedback when finalizing the tobacco cost recovery framework regulations, and publish a summary.”

Consultations on the cost recovery plan are expected to be held from Aug. 1 to Oct. 10, the document says.

According to the document, smoking is the leading preventable cause of premature death in Canada. It estimates about 46,000 people die from tobacco-related illnesses each year.

Despite a drop in tobacco use, 11.9 percent or 3.8 million people in the country still smoke.

A 2022 Statistics Canada survey found that 12 percent of Canadians over the age of 25 say they smoke, compared to 4 percent of those aged 15–19. It also found that men were more likely to smoke (13 percent) compared to women (9 percent).

When it comes to the younger population, 59 percent of students in Grades 7–12 said they believed it would be fairly easy or very easy to get a cigarette if they wanted one.

Fifteen percent of students in those grades said they had tried smoking.

Data shows that it’s more likely younger Canadians are trying vaping over cigarettes. Thirty percent of those aged 15 to 19 said they had tried vaping. One in seven said they had vaped in the past month.

However, 47.5 percent of those aged 20 to 24 said they’ve tried vaping, compared to 14.7 percent of those over 25 years of age. One in five Canadians aged 20 to 24 said they had vaped in the last month.