Cigarettes and Alcohol Federal Tax Announcement, Prices on the Rise

After the announcement and tabling of the Federal Budget on Wednesday, decisions have been exercised in favor of raising rates on cigarettes and alcohol.

The excise duty rate on cigarettes increases to $21.56 per carton from $21.03. Additionally, tax rates on alcohol will increase by two percent, effective immediately.

Beginning in 2018, both rates will be adjusted to the Consumer Price Index as a matter of course, with the goal of increasing Public Revenue.

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The elimination of surtax on tobacco manufacturers is also mentioned in the Federal Budget. The aim overall by the Federal Government is to use peak revenue levels reached in the early 2000’s to come instead through the new increase in taxes to the consumer. The deterrent effect is noted, yet most who have seen the budget, say it will have very little effect on consumer spending.

Alternately, a spokesperson for the Canadian Cancer Society states that the move is ill-conceived by noting that the surtax on domestic tobacco manufacturers should have been amped up and not removed at all. The spokesperson believes that higher taxes on cartons themselves, will, however, discourage people from buying cigarettes and decrease the number of teens smoking.

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He states that at the very least it is a step in the right direction. However, he notes that the budget does not achieve the goal of increasingly larger and larger numbers of smokers quitting the habit.


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