This post provides links to updated data sheets on tobacco tax revenues, industry earnings, cigarette sales and smoking rates. Some highlights are provided below.
Appreciation goes to those working in the government agencies which have collected this information and made it available.
- Taxes on cigarettes in Canadian jurisdictions
- Tax revenues from tobacco sales, 1990 to 2022
- Manufacturers’ and federal tax revenues from cigarette sales.
- Tobacco tax revenues per smoker, Canada 2011 to 2022
- Provincial cigarette and fine-cut sales per smoker
1) The average Canadian cigarette smoker provided governments with $1,862 in tobacco-specific taxes in 2022
Almost all (90%) of the federal tobacco tax is collected on manufactured cigarettes, with taxes on cigars and loose tobacco totalling about 340 million. Provincial governments do not provide detail on revenues from different types of tobacco.
These revenues represents an average of $1,685 in tobacco taxes collected from each of Canada’s 3.8 million cigarette smokers – with the federal government reporting $779 in tobacco tax revenue per smoker and provincial governments reporting between $616 and $1,311 per smoker during the year.
Almost two-thirds (63%) of Canada’s smokers live in Quebec and Ontario, where where tobacco taxes are lowest.
2) Total tobacco tax revenues in Canada fell by 10% year over year.Related data sheets:
Overall, tobacco tax revenues across Canada fell by 10% in 2022-2023 compared with the previous fiscal year.
Federal revenues from tobacco excise taxes fell by $217 million, from $3.18 billion to $2.96 billion (-7%). All of the provinces experienced a decline in tobacco tax revenues, from a provincial total of $3.93 billion in 2021-22 to $3.4 billion in 2022-2023. The drop was greatest in British Columbia (-25%), Newfoundland (-23%), Alberta (-17%), New Brunswick (-16%) and Nova Scotia (-15%) and Manitoba (-14%). It was smallest in Prince Edward Island (-0.2%), Ontario (-7%), Saskatchewan (-9%) and Quebec.
Total provincial tobacco tax receipts have dropped by one-quarter (24%) over the past two years, and by almost one-third (31%) once inflation has been taken into account.
Related data sheets:
3) Industry revenues from cigarette sales are falling -- but are keeping up with inflation better than federal tobacco tax revenues.
Tobacco manufacturers are required to report to Health Canada the number cigarettes they sell, and also to report on their wholesale revenues (including federal taxes) from these sales. This data is periodically released by Health Canada in an aggregate form for each calendar year.
From this data a comparison with the revenues to manufacturers and the federal government from cigarette sales during the calendar year can be made. Before 2014, government and industry generated equivalent gross revenues from cigarette sales and taxes. Since 2014, industry revenue has been significantly higher than federal tax revenues from cigarette sales.
Related data sheets:
4) Tobacco companies report selling 13.4 cigarettes per day per smoker.
Across Canada, the the number of cigarettes (and fine-cut equivalents) reported sold per smoker ranges from fewer than 10 per day in Newfoundland to 15 per day in Quebec, with a national average of 13.4 per day (4,838 per year).
The number of cigarettes sold per smoker has fallen slightly since 2018. Possible reasons for this are explained in the next section.
Related data sheets:
5) Smoking surveys and sales statistics tell different stories about reductions in tobacco use.
Between 2021 and 2022, estimates of the number of smokers in Canada fell by 1% (from 3.830 million to 3.804 million) and the number of cigarettes reported sold fell by 12% (from 20.9 billion to 18.4 billion).
This is not the first time in the past decade that there has been a large difference in the year-over-year estimates of smoking (from Statistics Canada's Canadian Community Health Survey) and reported cigarette salse (from industry reports to Health Canada). A similar difference was found in 2020, when smoking rates fell much more deeply than did cigarette sales (-11% vs -3%).
Such discrepancies could result from a number of factors, including:
▪ changing patterns of nicotine use (e.g. smokers shifting to or away from e-cigarettes)▪ normal variance in the estimates of smoking behaviours
▪ changes to survey methods which lower or increase prevalence estimates (as happened in 2020)
▪ increases or decreases in unreported illicit cigarette sales
▪ incomplete reporting by manufacturers
▪ incomplete reporting by manufacturers
In 2022, tobacco companies commented on an unexpectedly large reduction in reported sales in 2022, particularly in the western provinces. In a submission to the Ontario Court, Imperial Tobacco reported: "A review of the cash flow actuals vs. forecast for the period from February 28, 2022 until August 29, 2022 shows a decline of $212 M in collections (equivalent to -8.3%). This is
driven by a lower sales volume than expected for this period. Although the volume decline
is affecting all the regions, it is significantly more severe in the Western provinces.
ITCAN’s belief is that this steep decline is affecting not only ITCAN’s business but the
entire legitimate cigarettes category. ITCAN’s observation is that a significant and
unexpected increase in demand for illicit products is the main cause of the decline."
Sales data reported to Health Canada confirm that legal tobacco sales fell by a greater percentage in British Columbia in 2022 than the reduction in the number of smokers would account for.
Related data sheets:
