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

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Page Title:The Taxation of Nicotine in Canada: A Harm-Reduction Approach to the Profusion of New Products – C.D. Howe Institute
Article Title:The Taxation of Nicotine in Canada: A Harm-Reduction Approach to the Profusion of New Products
URL:https://cdhowe.org/publication/taxation-nicotine-canada-harm-reduction-approach-profusion-new-products/
Published Date:April 27, 2021
Accessed Date:February 8, 2025

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.

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