The federal budget contains several pocketbook initiatives including eliminating the ‘sin’ tax on low-alcohol beer, slapping one on vaping products, and making menstrual products more readily available for Canadians in need.
As excise tax duties rose recently for alcohol products in Canada, the new budget proposes to get rid of this tax for low-alcohol beer – which is beer with no more than 0.5 per cent alcohol by volume.
At the moment, low-alcohol beer is subject to excise duty rates, while its low-alcohol wine and spirit counterparts are exempt.
“This will bring the tax treatment of low-alcohol beer into line with the treatment of wine and spirits with the same alcohol content, and make Canada’s practices consistent with those in other G7 countries,” according to the federal budget document.
The announcement comes a week after the Conservatives and NDP advanced private members’ bills targeting the rising cost of beverages. Since 2017, excise duty taxes on beer, wine, spirits and other alcoholic beverages have increased automatically every year on April 1.
A Plan International Canada survey found that over one-third of women and girls in Canada had to make budgetary sacrifices—either often or occasionally—in order to afford menstrual products.
In Budget 2022, the federal government outlined its plan to give $25 million for Women and Gender Equality Canada—a government department previously known as Status of Women Canada—to start a pilot project aimed at making menstrual products available to Canadians in need.
“Access to menstrual products is a basic necessity, but current barriers make it difficult for some women, girls, trans, and non-binary Canadians to fully participate in school, work, and society,” the budget document reads.
The budget document estimates this program would cost a total of $25 million, with $6 million being spent in 2022-2023, and $19 million in 2023-2024.
Federal labour officials have heard repeatedly about lack of menstrual products in workplaces, with stakeholders telling the government about hygiene and health issues if workers turn to “unsuitable improvised solutions” or if they were to “extend the use of products beyond their recommended time frame,” according to a briefing note by stakeholders sent to then-Labour Minister Filomena Tassi last year.
Tassi acknowledged then that menstrual products are “a basic need for many Canadians, however they are often not treated as such.” She added menstruation is “a fact of life, and part of supporting the health and safety of employees.”
The last budget announced the government’s intention to tax vaping products in an effort to curb the health risks they pose, especially to young people.
Budget 2022 says this excise duty—also known as a sin tax that’s charged on goods like tobacco and alcohol products—will come into effect on Oct. 1 of this year. The tax would amount to $1 for every 2 mL (or fraction thereof) for containers with less than 10 mL of vaping liquid. For containers with more than 10 mL, the rate would be $5 for the first 10 mL and $1 for every additional 10mL (or fraction thereof).
So a 30 ml bottle of vaping liquid would be hit with an excise duty of $7.00 ($5.00 for the first 10 ml and $2.00 for the remaining 20 ml).
“Vaping rates among young people in Canada remain high, and the federal government recognizes the potential risks that vaping products post to them,” says the 2022 federal budget document.
A Health Canada survey found 36 per cent of Canadians between the ages of 15 and 19 have tried vaping products. That number rises to 48 per cent for those between 20 and 24.
The budget document outlines projected revenues of $654 million over the next five years, with $69 million coming in the 2022-2023 fiscal year, after which revenues would increase to $145 million for the next three fiscal years. In 2026-2027, the government projects the tax would bring in $150 million.
The federal government also wants provinces and territories to team up to create a vaping taxation framework – under which an additional tax equal to the proposed federal rate would apply. The revenues would be split 50/50 between the federal government and the provincial and territorial governments.
Phil Hahn – CTV News – 2022-04-07.