Higher tobacco and vaping taxes offsets drug plan spending in federal budget

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OTTAWA — The federal government expects that its latest effort to discourage Canadians from smoking, contained in the federal budget tabled Tuesday, will generate $1.7 billion in new revenue.

That increased cash flow happens to coincide with the launch of a new $1.5-billion drug plan offering universal coverage for contraceptive and diabetes medications.

Holland was reticent to share the cost of the program at the time, and said the price tag was likely to change based on negotiations with provinces and territories. "Whatever dark corner the tobacco industry crawls and creeps into to go after our children, wherever they go, whatever loophole they think they can find, they will meet me like an iron wall," he said at the time.

The cost of excise taxes is often passed on to consumers through higher prices, a common — and lucrative — strategy governments use to encourage smokers to quit. In 2022, the smoking rate among people 15 years and older was 10.9 per cent, and the rate of youth vaping in that survey was 30 per cent. Conservative health critic Stephen Ellis said the Liberals' prescription drug program is"really about the preservation of the costly coalition" and their agreement to put off a federal election.

 

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