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Feds hiking tobacco tax

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OTTAWA -- Hoard ‘em if you got ‘em.

Starting Wednesday, the federal government is hiking the excise duty – essentially, an additional federal tax -- on tobacco products by nearly 24%.

That’s $4 more for a carton of smokes.

It’s expected the increase will add $96 million in additional revenue for the feds this year, and more than $600 million annually after that.

The Canadian Cancer Society applauded the move Tuesday, saying it will reduce smoking, especially amongst youth, and ultimately save lives.

All tobacco products are included in the rate hike.

And whereas tobacco products at duty-free shops had been charged a slightly lower excise duty than elsewhere in Canada (for example, $15 instead of $17 per carton of cigarettes), the rate will now be the same -- $21.03 per carton -- everywhere. (Products at duty-free shops will still be exempt from GST or HST.)

According to the government, the increase is adjusting for inflation going back to 2002, the last time the duty was increased.

What’s more, large retailers and wholesalers with more than 30,000 cigarettes – or 150 cartons -- in inventory as of Wednesday morning will have to send the feds two cents for every cigarette they have in stock to account for the higher duty rate.

Going forward, the excise duty will be indexed to the Consumer Price Index and adjusted automatically every five years.

The feds are also spending $91.7 million over five years to buy sensor devices -- radar, sonar and long-range thermal video cameras – to keep watch at smoke-smuggling hot spots along the border.

 

Up in smoke: How tobacco excise duty is going up

Cigarettes and tobacco sticks

-- Across Canada -- from $17 to $21.03 per 200 cigarettes and tobacco sticks

-- Duty-free shops -- from $15 to $21.03 per 200 cigarettes and tobacco sticks

Chewing tobacco and fine cut tobacco for roll-your-own cigarettes

-- Across Canada -- from $21.25 to $26.29 per 200 grams

-- Duty-free shops -- from $18.74 to $26.29 per 200 grams

Cigars

-- Across Canada -- from $18.50 to $22.89 per 1,000 cigars

-- Duty-free shops -- N/A

 

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