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B.C. tax changes affecting sugary drinks, vaping products coming into effect April 1

shutter stock_soda_fountainTax changes targeting sugary drinks and e-commerce services based outside of B.C. will come into effect on April 1 after being delayed by the COVID-19 pandemic.

The B.C. government says the changes include the elimination of the provincial sales tax exemption for carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners.

The tax will apply to all beverages dispensed through soda fountains or similar equipment, along with all beverages dispensed through vending machines.

The government says the move is supported by health professionals.

The second tax change will apply to those selling digital software and telecommunication services, who will be required to collect the PST on sales to B.C. customers if they have revenue in the province of more than $10,000.

All Canadian sellers of vapour products, such as vape pens, will be required to register to collect the sales tax on all online or mail-order sales to B.C. customers as part of the new measure.




P.E.I. bans flavoured vape products

Flavoured vape and e-cigarette products are now banned on Prince Edward Island.

The new regulations came into effect on March 1st and the changes  are part of a private members bill from PC MLA Cory Deagle, which received unanimous support from the legislature in 2019.

“The only flavour you’ll be able to use would be tobacco flavoured so all those other flavours will be gone,” Deagle told CBC.  “This is probably one of the biggest steps that we’re going to see trying to get rid of, or at least reduce, the amount of youth that are vaping.”

This is the province’s latest effort to curb youth vaping. In March 2020, P.E.I. increased the age of access for tobacco and vaping products to 21. In addition, this cut c-stores out of the equation by making products only available through vape shops and tobacconists.

“Obviously the age was big, and restricting the access to it was big as well. But the flavours are, I think, clearly what draws youth to it and keeps them on the product as well as being addicted to nicotine,” Deagle said. “Really the flavours is what keeps them coming back.”

Retailers were told of the flavour ban in August 2020 so they would have time to “deplete their inventory of flavoured electronic smoking device products.”

Deagle hopes the changes on P.E.I. will inspire other provinces to follow suit: “I think it went quite far, it’ll be some of the strictest regulations in Canada.”


Tobacco industry’s use of Non Smoking Week to push vaping draws ire in the Maritimes

Health groups in the Maritimes are questioning the tobacco industry’s use of ‘National Non-Smoking Week’ to promote vaping.

The week was established more than 40 years ago by health organizations including the Canadian Cancer Society, the Heart and Stroke Foundation and the Canadian Lung Association which were concerned about what they called “a tobacco epidemic.”

In a news release issued this week, Imperial Tobacco Canada, whose brands include Du Maurier, Player’s and Vuse, framed vaping as a safer option to cigarettes, citing decades of research they have invested in and statements by national health bodies.

“When you look at today’s reality, I believe it is time that we think beyond the typical ways we have approached non-smoking,” said Eric Gagnon, Imperial’s vice-president of corporate and regulatory affairs. “Let’s ask ourselves: does the concept of `non-smoking’ have to be zero-sum? Does it have to be quit or die? Or can it also include replacing cigarettes with a less risky alternative?”

Gagnon told the Times & Transcript that the company is trying to “generate a proper debate.” He said government regulation needs to open up so vaping products can achieve their “full potential in harm-reduction,” citing flavour bans and nicotine caps in vaping products as counter-intuitive.

But Stephane Robichaud, CEO of the New Brunswick Health Council, said the viewpoint that vaping is not causing a great deal of harm itself is dangerous and outdated. He would like to see other programs and methods elevated during Non-Smoking Week instead, programs such as those through Horizon Health that may use medication, discussion and other strategies to help users quit both smoking and vaping.

“In the last 18 to 24 months, science has been building that vaping is not a safe alternative,” Robichaud said. “We have seen an increase in youth experimenting in vaping … and illnesses including chronic lung conditions have been significant.”

Kelly Cull, director of advocacy in Atlantic Canada for the Canadian Cancer Society, said the organization is advocating for governments to continue to invest money in nicotine replacement therapy, counselling and peer support programs.

Vaping, something that framed itself as a tool to stop smoking, has increasingly been used as a gateway to start smoking, Robichaud said, pointing to increases in vape use by New Brunswick students in grades six to 12 between 2016 and 2018, according to the council’s Student Wellness Survey.

Numbers from the 2018-19 Canadian Student Tobacco Alcohol and Drug Survey are alarming, Cull said, with 41% of New Brunswick youth indicating they had tried vaping, 27% in the last 30 days.

New Brunswick already has more young people vaping than the national average, Cull said, but measures similar to what have been introduced elsewhere in the Maritimes, limiting flavours and introducing a nicotine ceiling, for example, could help curb that.

Nova Scotia and Prince Edward Island have both passed legislation to reduce the appeal of vaping, introducing flavour bans and a nicotine ceiling in products.

Imperial doesn’t want to see that happen in New Brunswick, said Gagnon. While the company is in favour of efforts to reduce their products falling into the hands of young people, flavours, such as fruit flavours, are also important for appealing to adult smokers, he said, noting that if they’re not available, there should be concern those trying to quit will return to cigarettes.

Ceiling caps and flavour bans have already contributed to vape shops closing in Nova Scotia, he said.


Industry reacts to Health Canada’s proposed vaping regulations



While the Convenience industry agrees with Health Canada’s mandate to reduce youth vaping, Ottawa’s new proposed vaping regulations aimed at reducing the level of nicotine in vapour products will stand in the way of adult smokers looking to quit, while putting unrealistic expectation on c-store operators.

In a statement, Imperial Tobaccos said the proposal “will severely hinder the federal government’s ability to reach its stated objective of reducing the smoking rate in Canada to less than 5%  by 2035.”

Health Canada announced Friday it is proposing to lower the maximum nicotine concentration allowed for vaping products that are manufactured or imported for sale in Canada to 20 mg/ml. The current limit is 66 mg/ml, which would remain the maximum concentration allowed for any vaping products intended for export markets. The new rules would forbid the sale of any vaping product if the nicotine concentration listed on the packaging is higher than the new limit.

“Health Canada recognizes the concept of offering reduced risk products as a way to reduce exposure to the harmful chemicals caused by smoking. In addition, it recognizes vaping as a less harmful alternative to smoking,” said Eric Gagnon, VP of corporate and regulatory affairs at Imperial Tobacco Canada. “It is unfortunate that the government is considering a measure that will hinder vaping products from reaching their full potential as a less harmful alternative to smoking.”

The Convenience Industry Council of Canada agreed, calling Ottawa’s proposal “misguided,” and said that the move will push adult users back to tobacco, or to the illegal online market. Also, adult smokers considering transition will be discouraged: CICC member sales data shows that more than 80% of convenience store customers purchase the higher nicotine content product when beginning the transition to vape.

“Canada’s convenience stores are the primary destination for adult smokers looking to make a switch to a reduced risk product,” says CICC president and CEO Anne Kothawala. “Our sales data shows that smokers require sufficient nicotine concentration in order to successfully transition. Offering our customers this choice and encouraging them to make the switch is in line with Health Canada’s stated public health objective of reducing smoking rates.”

Imperial Tobacco says the government acknowledges this risk when it states, “it is anticipated that the vaping industry would experience the loss of sales to adult customers who choose to discontinue using vaping products rather than transition to vaping products that contain 20 mg/mL nicotine or below.”

While it could be debated whether or not the current cap of 66 mg/ml is appropriate, said Gagnon, “he proposed 20 mg/ml is too low and will not satisfy a portion of current Canadian vapers nor smokers seeking a less harmful alternative. It is hard to understand why the government would enact a policy measure knowing full well it will drive up the number of smokers in Canada.”

Nicotine caps will not solve the youth vaping issue, adds Kothawala. “We support the government’s goal of addressing youth vaping and are proud that our channel has a proven track record of retailing age-restricted products. Convenience stores are not the problem. Reducing youth vaping requires a multi-faceted approach that clamps down on the unregulated online market and provides for stiffer penalties for any retailers selling to minors. This policy will make it more likely that youth will access higher nicotine vaping products through illegal online markets.”

In addition, she says the the proposed implementation date of 15 days is “simply unworkable” for our retailers. “Previous implementation timelines have been months long – not days – which allow convenience stores to become compliant. This will impose significant costs on our industry at a time when businesses are struggling with both the economic and health impacts of COVID-19. Government has already acknowledged these challenges earlier this year when they provided a six-month extension to previous vape regulations and should apply the same approach in this case. We are calling on the government to reconsider their decision to limit nicotine concentrations and to increase the implementation period for retailers.”

The government says it is also thinking about added regulatory measures that would restrict flavours in vaping products, and make the industry give more information about their products, including details on sales, ingredients and research and development.

-With files from The Canadian Press



Health Canada proposes reducing nicotine concentration limit in vaping products



The federal government says it wants to reduce the amount of nicotine allowed in vaping products as part of greater efforts to curb their appeal to young Canadians.

Health Canada announced Friday it is proposing to lower the maximum nicotine concentration allowed for vaping products that are manufactured or imported for sale in Canada to 20 mg/ml. The current limit is 66 mg/ml, which would remain the maximum concentration allowed for any vaping products intended for export markets.

The new rules would forbid the sale of any vaping product if the nicotine concentration listed on the packaging is higher than the new limit.

“Our work to protect Canadians from the harms of vaping products continues,” federal Health Minister Patty Hajdu said in a statement announcing the move.

“These changes will help reduce the appeal of vaping products to youth.”

The department is launching a 75-day public consultation Saturday on the proposed new regulations, seeking feedback from all Canadians. The consultation will end March 4.

The government says it is also thinking about added regulatory measures that would restrict flavours in vaping products, and make the industry give more information about their products, including details on sales, ingredients and research and development.

The Canadian Cancer Society welcomed the move, saying British Columbia, Nova Scotia and the European Union have already limited nicotine concentration on vaping products to 20 mg/ml, while Quebec has announced its intention to do so. Meanwhile, some products currently sold here contain nearly triple that amount.

“The high rate of youth vaping is of fundamental concern and provides the necessary rationale for the new regulations,” Rob Cunningham, a senior policy analyst with the Canadian Cancer Society, said in a statement Friday.

“High nicotine levels have contributed to a new generation of young people becoming addicted to nicotine through e-cigarettes,” he said.

The Heart and Stroke Foundation of Canada echoed that message and pushed for more.

“We also urge Health Canada to move quickly on other important measures to address the youth vaping crisis including comprehensively restricting flavours and increasing taxation,” said Dr. Andrew Pipe, chair of the board.

The Canadian vaping industry trade association said the lower nicotine limit would make adult smokers who are using cigarettes and other tobacco products considered more harmful than vaping products, less likely to switch.

“Considering the disparity of harm between vaping and smoking, we don’t understand why the federal government would be using Health Canada resources during a global pandemic to explore making it harder for adult smokers to switch to a reduced risk product,” Daniel David, president of VITA of Canada, said in a statement Friday.

Anne Kothawala, president and CEO of the Convenience Industry Council of Canada, made a similar argument, adding the government’s proposal to have the rules come into force 15 days after the final version is published is too short a timeline.

“Previous implementation timelines have been months long _ not days _ which allow convenience stores to become compliant,” she said in a statement.

“This will impose significant costs on our industry at a time when businesses are struggling with both the economic and health impacts of COVID-19.”



Quebec to ban vaping flavours and restrict nicotine content



Quebec intends to ban the sale of flavoured vaping cartridges and limit nicotine content in an effort to stem an increase in youth vaping in the province.

A recent report from the Quebec Coalition for Tobacco Control found that a third (32%) of high school students consume tobacco products or its by-products

“With the growing popularity of vaporization products, especially among young people, it becomes imperative to act to prevent a new generation from becoming addicted to nicotine because of these products,” Health Minister Christian Dubé said December 9, 2020 in a statement.

According the Montreal Gazette, “in 2015, Quebec banned the sale of flavoured tobacco products and saw a reduction in the number of high-schoolers smoking such products within 30 days. Similar action should be taken with regard to vaping, the public health researchers recommended.”

With that in mind, the plan is to ban the sale of flavoured vaping products and limit nicotine concentration to 20 mg/mL (a cigarette contains about eight mg of nicotine).

The Vaping Industry Trade Association (VITA) urged the government to continue to allow the sale of flavoured vaping products in order to service ex-smokers who might otherwise return to cigarettes.

Eyvind Dahl owns Dahl's Coin Laundry & Convenience in Renfrew, Ont.

The ups and downs of tobacco 

After a surge in sales during the COVID-19 lockdown, how do c-stores keep smokers coming back for more?

Eyvind Dahl owns Dahl's Coin Laundry & Convenience in Renfrew, Ont.

Eyvind Dahl owns Dahl’s Coin Laundry & Convenience in Renfrew, Ont.

As Canada locked down in the wake of the COVID-19 pandemic, Eyvind Dahl noticed something at his Renfrew, Ont. c-store went up: tobacco sales. 

Dahl, the owner of Dahl’s Coin Laundry & Convenience, attributes the increase in tobacco purchases to the closure of First Nations’ borders in the province, a protective measure to fight the coronavirus. “When they closed the reserves, our tobacco sales more than doubled,” says Dahl. 

He notes that sales of Imperial tobacco alone jumped from 50 to 100 cartons a week. Hand in hand with that increase in business came a surge in impulse purchases. “All my categories shot up,” says Dahl. “We were so busy it was crazy.”

 Surge then slide

Screen Shot 2020-10-27 at 10.40.46 AMDahl was not alone in seeing a surge in tobacco. According to a survey conducted by the Ontario Convenience Stores Association (OCSA), retailers throughout Ontario showed an increase in tobacco sales that ranged from 10% to more than 30%. The survey of the association’s 6,000 members also found that proximity to a reserve played little role in the booming business. Sales increased across the board, and almost half of the stores surveyed were more than 30 kilometres from the closest reserve. Dahl’s Coin Laundry & Convenience is an hour away from the nearest First Nations community. 

The boom has been temporary, however. “Now that the reserves are back open, sales are going down, down, down,” says Dahl. “It’s going back to normal, which shouldn’t be normal.”

The issue of contraband tobacco has been a significant one for retailers, particularly in Ontario. “The illegal cigarette market has been left unchecked for far too long,” says OCSA CEO Dave Bryans, who is based in Oakville. “This can’t go on. In Ontario, 30 to 60% of butts swept are contraband.”

The OCSA is calling on the provincial government to develop an integrated plan to address contraband concerns and other tobacco issues. “The survey demonstrates a need to work with the Ontario government to develop a tobacco strategy from pricing, formats, promotions and incentives to protect small businesses as well as government’s health policies,” says Bryans.

The Convenience Industry Council of Canada noted a similar surge amongst its members. During a recent interview with CSNC, president and CEO Anne Kothawala said CICC is engaging “Ernst & Young to put together a comprehensive study on contraband tobacco across the country. We need much stronger public policy to address this issue.”

 Competing with contraband

Until then c-stores are looking for ways to enhance tobacco sales. In the current environment, productivity is paramount, says Anthony Ruffolo, vice president, McCowan Design & Manufacturing Limited in Toronto. “Plain packaging has definitely made it more difficult to vend the product quickly. You need to be more efficient and organized.”

Products like McCowan’s secure undercounter tobacco cabinets can help. This may also free up the back wall for new opportunities, space often previously dedicated for tobacco products. “There is an ability to generate profits off the back wall. You may even be able to sell advertising,” says Ruffolo. 

Sara Clarkson, president of Storesupport Canada in Mississauga, points out that helping people work through the plain packaging maze will build customer loyalty. “There is still lots of confusion regarding cigarette brands with the start of plain packaging. Knowing what brands to recommend is key and ensuring stock is available of those brands for your regular customers is also of huge importance.”

Bryans recommends c-stores promote the least expensive products they have in inventory as a way of competing with First Nations’ retailers at a basic level. 

While that will attract some new customers and keep others coming back, there is no way c-stores can compete head on with contraband sales, notes Dahl. A carton of cigarettes from the reserve is $20. His cheapest brand is $120. “It’s a huge difference. I can sympathize with the customer.”

The focus on tobacco sales includes another harsh reality for c-stores: the category is declining.

Bryans notes that c-stores sell 99% of all legal cigarettes and sales are declining 1.5 to 2% a year. “That is a huge concern for the channel. The time has come for a task force to review the tobacco business in Canada.”

Filling the void

One solution is to look for options that can replace tobacco. Vaping seemed a promising category and the profit margin is greater than tobacco. The product is also very popular, but there are concerns about safety and increasing regulations that are undoubtedly affecting retailers.

Many would like to see c-stores be able to sell alcohol, and the industry has been lobbying the government and raising public awareness for the last seven years to encourage a move to an open retailing market. Doug Ford’s Progressive Conservative government has promised that market will soon be a reality in Ontario, but the wait continues.

Ruffolo also recommends retailers look for products and services that set them apart, such as foodservice or local products. “You need to draw in new customers. The more you know your customers, the more you will be able to retain them.”

It’s also critical to remind customers—through signage, conversation, and any other means—that c-stores offer what competitors, from larger stores to smoke shacks and vape shops, do not. That message resonates more clearly and convincingly in a COVID-19 world, notes Clarkson. “With access to grocery stores being more difficult with line-ups and extra time needed to shop, quick convenience is more important than ever. Ensuring staples are in stock and healthy snacks will promote a quick stop at the convenience store.” 


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Vapers, smokers take a hit as N.L. budget focuses on prevention



If you took up vaping to avoid the taxes on cigarettes, your luck just ran out.

A 20% tax on vaping products was a key feature of the Newfoundland and Labrador budget September 29, which aimed to focus as much as possible on community health and prevention.

Vaping has so far escaped the province’s sin tax net, even though research suggests the practice can present significant health risks, especially for teens and young adults.

The province also added an extra 10 cents in taxes per gram of loose tobacco and five cents per cigarette.

The budget also allocated $1.7 million for school initiatives, awareness campaigns and cessation programs to help reduce tobacco use and vaping.


Survey shows a decline in youth vaping



A new survey finds that young people have been vaping less frequently since the COVID-19 pandemic began.

The survey, conducted by the Lung Association of Nova Scotia and Smoke-Free Nova Scotia, finds that respondents decreased vaping to five days per week from six, on average.

They also cut back to an average of 19 vaping episodes per day, down from 30.

There has been a major push by all levels of government to introduce regulations designed to curb youth vaping.

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario.

The researchers say it may be related to warnings of potential complications from COVID-19 for e-cigarette users.

The survey heard from more than 1,800 respondents between 16 and 24 years old, and found most begin vaping at around the age of 15.


Imperial Tobacco opens vape shop in Toronto

The company plans to open more locations in cities across the country

image002Imperial Tobacco Canada is opening a new retail store in Toronto that offers adult consumers a full-range of vapour products, while a select portfolio of these vaping products will continue to be available at convenience stores.

“The opening of our first Vuse store in Canada is an important component of our harm reduction strategy and an integral part of our goal to reduce the health impact of our business by offering a greater choice of less risky products to adult consumers,” Ralf Wittenberg, president and CEO at Imperial Tobacco Canada, said in a release. 

The tobacco giant pointed to multiple studies and academic journals reaffirming the “less harmful nature of vaping products,” adding many health groups, including Public Health England, have estimated that vaping products are” at least 95% less harmful than traditional cigarettes.”

“We have come a long way but there is still significant progress to be made,” said Wittenberg. “Health Canada’s acknowledgment of vaping as a less harmful alternative to cigarettes is indicative of the shift we’re seeing around the world.  This global movement among public health authorities is still unknown to most smokers, and that is where our efforts must be placed: creating the necessary awareness among adult smokers to make the switch.”

The company stated that in order for vape products to “achieve their full potential, it will require the federal and provincial governments to implement a science and evidence-based regulatory framework – a framework that allows and supports the appropriate communication to adult smokers, ensures the availability of these products to adults who are looking for an alternative to cigarettes, and enforces the protection of youth from gaining access to these products.”  

However, most provinces, as well as the federal government, are cracking down on vaping by introducing new rules and regulations that restrict advertising and the selling of vape products in environments frequented by youth. This has been particularly challenging for c-stores. The Convenience Industry Council of Canada argues that c-stores are not a major source for youth vaping and a flurry of new rules and regulations introduced in the last 18 months actually punish neighbourhood stores, while restricting choices for adult smokers who want to quit.  

“As technology advances and social attitudes towards reduced risk products change, we believe that embracing the principles of harm reduction can play a key role in helping Health Canada achieve its goal of reducing Canada’s smoking rate to less than five percent by 2035,” said Wittenberg.  “We are particularly proud to be opening this store during these difficult times. This one location has the potential to have a positive impact on thousands of smokers in Toronto, and we look forward to opening Vuse stores in other Canadian cities when and where regulations permit.”