The federal excise duty on tobacco products sold in Canada is going up today, a move that will raise the tax rate by approximately 24%.
For cigars, that means an increase from $18.50 to $22.89 per 1,000 cigars, though the increase doesn’t appear to apply at duty-free shops. The increase applies to all tobacco products sold in the country, with the tax on cigarettes and tobacco sticks going from $17.00 to $21.03 per 200 cigarettes, and chewing tobacco and fine cut tobacco for roll-your-own cigarettes going from $21.25 to $26.29 per 200 grams.
The Toronto Sun reports that the government says the increase adjusts for inflation back to 2002, which is the last time the duty was increased. The move is projected to bring in $96 million in 2014, and then $600 million annually going forward.
The excise duty rate is now indexed to the Consumer Price Index and will be adjusted automatically every five years.
The report also makes note that the Canadian government will be spending $91.7 million over the next five years to purchase and install surveillance equipment at smoke-smuggling hot spots along the border.