Statutory authorities: Tobacco and Vaping Products Act, Canada Consumer Product Safety Act

Sponsoring department: Department of Health

REGULATORY IMPACT ANALYSIS

STATEMENT: (This statement is not part of the Regulations.)

Executive summary

Issues: There has been a rapid increase in youth vaping in Canada. Young persons are being exposed to vaping product-related harms, including those related to nicotine exposure, which can result in a dependence on nicotine and an increased risk of tobacco use. Health Canada has identified the availability of high-nicotine concentration vaping products in the Canadian market since 2018 as one of the key factors that has contributed to the rapid rise in youth vaping.

Description: The proposed Concentration of Nicotine in Vaping Products Regulations (proposed Regulations) would establish a maximum nicotine concentration of 20 mg/mL for vaping products manufactured or imported for sale in Canada and prohibit the packaging and sale of vaping products if the nicotine concentration displayed on the package exceeds that value. The proposed Regulations would also amend the Vaping Products Labelling and Packaging Regulations (VPLPR) to align with this limit for products intended for the domestic market, while continuing to prohibit a nicotine concentration of 66 mg/mL or more in vaping products intended for export.

Rationale: Lowering the maximum concentration of nicotine allowed in vaping products is expected to contribute to reducing the appeal of these products to youth, which would help address the rapid rise in youth vaping. The proposed Regulations would support Canada’s Tobacco Strategy (CTS), which aims to reduce the burden of disease and death from tobacco use and its consequential impact on the health care system and society. They are expected to primarily benefit youth by contributing to the reduction in the number of those experimenting with vaping products, who could otherwise be exposed to and dependent on nicotine and transition into tobacco users. There would be longterm benefits in terms of avoided tobacco-related mortality and morbidity, and exposure to second-hand smoke.

The proposed Regulations would result in total incremental costs for the vaping industry estimated at $452.0 million present value (PV) over 30 years (or $36.4 million annually). The monetized costs to the vaping industry are associated with the disposal of their stocks of vaping products above 20 mg/mL nicotine, as these would no longer be sold or distributed, and potential industry profit losses. Implementation of the proposed Regulations would result in one-time incremental costs to Health Canada, which would not be significant when compared to the total costs of the proposed Regulations. There would be no incremental costs to Health Canada from performing compliance and enforcement activities.

A break-even analysis indicates that a decrease in the vaping initiation rates in the range of 2.58% to 4.11% relative to the baseline initiation rate would be sufficient to produce public health benefits equivalent to or greater than the estimated monetized costs.

The small business lens applies. There is no administrative burden on businesses that would result from the proposal; therefore, the one-for-one rule does not apply.

The proposed Regulations would align with restrictions in place in the provinces of British Columbia and Nova Scotia. They would also align with measures in place in the European Union, Iceland, Israel, Moldova, Saudi Arabia and the United Kingdom. They would not align with measures in the United States, as there is currently no restriction on the nicotine concentration of vaping products at the federal level.

Download proposed regulations here.

Canada Gazette, Part 1, Vol. 154, No. 51 – December 19, 2020

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