Nicotine buzz in the air as vaping rises, smoking falls

Canadian governments hitting tobacco and vaping products with new tax increases

Vape shops like this one have been waging a campaign against a move by government to ban flavoured vaping liquids | Nelson Bennett

Ever since tobacco was introduced to Europeans in the mid-16th century, governments the world over have been taxing it, and puritans and physicians have been trying to outlaw it.

The delivery systems for nicotine have changed over the centuries, from snuff and pipes to cigars, cigarettes and chewing tobacco and, more recently, the modern e-cigarette, or vape.

Smoking has been declining for decades now, and vaping may now be accelerating the trend.

The number of cigarette smokers in Canada has dropped significantly since 1965: from about 50% to 15% of the population by 2017, according to the University of Waterloo.

While that decline is partly attributable to health concerns and anti-smoking campaigns that have led Canadians to kick the habit for good, or stopped them from taking it up in the first place, it may also be partly due to displacement, as more smokers switch to vaping.

While the number of people who smoke cigarettes in Canada continues to decline, more Canadians – especially younger ones – are vaping, raising concern among health and government officials.

There are 1,500 vape shops countrywide, and about 14 in Vancouver, which is roughly equal to the number of cigar and tobacco stores in the city.

The vaping product market in Canada was estimated at $1.36 billion in 2019, according to the federal government. There are roughly 200 vaping liquid manufacturers in Canada and 15 to 20 large distributors.

Canada’s vaping business has grown steadily over the past decade but is now being hit with regulatory speed bumps and anti-vaping campaigns.

“Over seven years, we saw significant growth, especially in the first few years, up until 2017,” said Saadiq Daya, co-owner and CEO of VanGo Vapes, which is one of a handful of B.C.-based e-juice manufacturers.

VanGo makes and sells vape juice to retailers, mostly in Canada, as well as online. Its production facility in Coquitlam employed up to 30 people, but is now down to 10.

That staff reduction is partly due to business efficiencies, Daya said. But he added that a rash of vaping-related deaths and illnesses in the U.S. in 2019 also resulted in a decline in business.

The e-cigarette or vaping use-associated lung injury (EVALI) disease in the U.S. has since been linked to vaping of THC, not nicotine, and vitamin E acetate, an additive in THC vaping liquids that is not used in nicotine vape juice.

“When the EVALI hit, sales went down,” Daya said. “We did recover, but we didn’t fully come back to where we were.”

While few believe that inhaling vapourized strawberry-mint-flavoured nicotine is good for you, it’s also generally accepted that it’s probably better than cigarette smoking, which kills about 40,000 Canadians a year.

”For persons who smoke, the best thing they can do to improve their health is to quit smoking,” the federal government said in a recent Canada Gazette’s publication of new regulations coming into effect for vaping. “However, persons who smoke can also reduce their exposure to harmful chemicals in tobacco smoke by completely switching to vaping.”

The reality is that nicotine, like alcohol or cannabis, is one of those guilty pleasures that a certain segment of the population may never give up, whether in the form of cigars, cigarettes or vaping liquids.

Cigar smoking remains a luxury vice, with only about 3% of Canadians willing to shell out $30 to $80 for a Cuban Cohiba. And though pipe smoking appears to be enjoying a bit of a renaissance among hipsters, so few Canadians smoke a pipe that it’s not even measured in the Canadian Tobacco and Nicotine Survey.

Michael Rashti, partner in Vancouver’s Alpha Tobacco House of Cigars, said he has noticed an increase in the number of pipe smokers. He has also seen an uptick in business in general during the pandemic.

“In general, smoking is going up,” he said. “Smoking and drinking [went] up when corona hit.”

Federal excise taxes on tobacco were hiked in the last budget, and provincial tobacco taxes will go up July 1 to $0.65 per gram from $0.29 for tobacco. New federal excise taxes on vaping will also go into effect in 2022.

Canadian governments rake in $8 billion a year in tobacco taxes. Tobacco tax revenue for the B.C. government in the 2020-21 fiscal year was $720 million, according to the Canadian Taxpayers Federation.

Vaping is currently cheaper than tobacco products, but new taxes for vaping are now being introduced. And it is coming under increasing scrutiny and regulation.

Provincial and federal governments in Canada have proposed to limit nicotine levels in vaping liquids and to ban flavourings as a way to discourage vaping among youth.

Ian Irvine, a professor of economics at Concordia University and research fellow at the C.D. Howe Institute, has cautioned policymakers against treating vaping the same as smoking, because vaping is generally accepted to be less harmful to health than smoking.

The main concern for health and government officials is that vaping is something that is done overwhelmingly by younger people, and that nicotine addiction through vaping could lead younger people to tobacco.

So far, though, the statistics seem to suggest the reverse. The rate of smoking among teens has been declining since 2013, as vaping has increased.

Irvine notes that smoking among Canadians in their 20s fell from 13% to 8% between 2019 and 2020, according to the Canadian Tobacco and Nicotine Survey.

“Young people recognized early on that vaping was much less dangerous than smoking, and they reorganized their sin portfolio accordingly,” Irvine writes.

“If vaping were really a gateway to tobacco use, as argued by some health officials, smoking rates should increase among 20-year-olds as vapers move from their teens. But the data show exactly the opposite; vaping is a reverse gateway.”

While the long-term health impacts of vaping are not yet known, the impacts of smoking are.

Irvine therefore urges policy makers to consider vaping as part of a harm-reduction approach, which “suggests that society may tolerate the consumption of even substantial nicotine volumes if that consumption has modest rather than severe health consequences.” •