The Yukon government is pursuing tax-related measures to tackle a rise in vaping and to reduce the number of vaping-related lung ailments.

Last Thursday, the government tabled the Coordinated Vaping Product Taxation Agreement Act in the legislature.

The bill will help target growing rates of vaping across the territory, especially among youth, by enabling the Yukon to participate in a federally co-ordinated vaping tax, the government said in a statement.

If the legislation is passed, the government would enter into an agreement with the federal government to double the current federal tax on vaping products sold in the Yukon.

This agreement would also allow the Yukon to receive 50 per cent of the taxation revenue collected in the territory.

The territorial government anticipates receiving $115,000 under the new Vaping Transfer in 2024-25, if the legislation passes this spring.

If fully implemented, the Yukon’s Department of Finance estimates the territory would receive approximately $780,000 in federal vaping transfers in fiscal year 2026-27.

As part of the agreement, the Yukon will not add its own tax to these products. If passed, the new tax rate would be implemented as early as Jan. 1, 2025.

“The taxation of vaping products in the Yukon, at levels comparable to those in other provinces and territories, will create a level playing field across all jurisdictions,” said Finance Minister Sandy Silver.

“By increasing the federal tax on these products, we expect to reduce the widespread consumption among youth, prevent nicotine addiction and help reduce incidences of vaping-related illness.”

Health and Social Services Minister Tracy-Anne McPhee said the planned measure “marks a significant step forward in our ongoing efforts to protect the health of Yukoners, particularly our youth, from the risks associated with vaping.

“By participating in the federally-co-ordinated vaping taxation arrangement, we are not only addressing the rising rates of vaping in our territory but also taking a proactive stance in preventing nicotine addiction and reducing vaping-related illnesses.

“This initiative reflects our commitment to public health and the well-being of our community,” McPhee added.

In 2021, Ottawa announced its intent to introduce a new federal taxation framework for the imposition of excise duties on vaping products as part of the annual federal budget.

In Budget 2022, Canada presented details about how the tax would work, as well as initial estimates of the revenue potential for the new tax.

In a statement and subsequent government motion in November 2023, the Yukon government signaled its intention to join the federal co-ordinated vaping product taxation framework.

In 2022, one-third of youth aged 15 to 19 and nearly half of young adults aged 20 to 24 reported having tried vaping.

Since the legalization of e-cigarettes with nicotine in 2018, vaping among youth has risen significantly, from eight per cent to 15 per cent, the Yukon government reports.

The vaping rate among young people (aged 15 to 24) is the highest out of all age groups.

Ten of the 13 provinces and territories have either joined the federal government’s vaping product taxation framework or have announced their intent to do so, including the Yukon. Three jurisdictions will continue to impose their own tax.

The federal tax consists of the regular federal duty and a second, supplemental, duty on vaping products.

Once implemented, the tax rate will consist of $2 per two millilitres, or a fraction thereof, for the first 10 millilitres of vaping substance in a product, and $2 per 10 millilitres for volumes beyond that.