Tobacco Taxation Increase

Published: May 5, 2021
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Abstract

This is an independent cost estimate of a budgetary measure contained in the federal government’s Budget 2021. A list of the PBO’s cost estimates of components of the Budget can be viewed on this page. 

Increasing the tobacco excise duty rate by $4 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates for other tobacco products outlined in the table below:

Products

Excise Duty Rates

Before Budget Day 

After Budget Day

Cigarettes (per carton of 200)

$25.09

$29.09

Tobacco Sticks (per stick)

$0.12545

$0.14545

Manufactured Tobacco (per 50 grams or fraction thereof)

$7.84062

$9.09062

Cigars

$27.30379 per 1,000 cigars plus the greater of $0.09814 per cigar and 88 per cent of the sale price or duty-paid value

$31.65673 per 1,000 cigars plus the greater of $0.11379 per cigar and 88 per cent of the sale price or duty-paid value

Inventories of cigarettes held by certain manufacturers, importers, wholesalers, and retailers at the beginning of the day after Budget Day are subject to an inventory tax of $0.02 per cigarette, subject to certain exemptions.