The Taxation of Nicotine in Canada: A Harm-Reduction Approach to the Profusion of New Products

Taxes on Nicotine Products Should Reflect Degree of Harm or Risk

• Author Ian Irvine examines alternative nicotine products, from e-cigarettes and heat-not-burn sticks, to oral pods, and proposes that tax rates for individual products reflect their potential health-related harm.
• The author’s harm-reduction approach recognizes that if safer alternatives to cigarettes are available, policy should be developed with the goal of diverting users – particularly those in vulnerable communities where smoking prevalence remains high – away from higher-risk products towards lower-risk ones.
• Relative tax rates should reflect our best understanding of the health risks associated with each nicotine- or tobacco-based product. A well-structured set of taxes should aim to encourage smokers to quit or switch to reduced-risk products, but not be too high to drive an illegal market.