WINNIPEG - Electronic cigarettes are taking a bite out of Manitoba's tobacco tax revenues.
The provincial government raised tobacco taxes by one dollar a carton in last week's budget, but is expecting tobacco tax revenues to drop by about 12 per cent from last year.
Barry Draward, an assistant deputy minister of finance, said the main reason for the drop is people switching from tobacco to electronic cigarettes.
The battery-operated e-cigarettes are not subject to tobacco taxes and are used by some people as a nicotine-free alternative.
But others use them with nicotine cartridges, to get the same nicotine hit as a regular cigarette without the tobacco.
Draward says the jury is still out as to whether e-cigarettes are an alternative form of tobacco cigarettes or a stop-smoking aid, and there could be tax implications.
"It would be a health (department) decision, regardless," Draward said.
"If they're saying it's a cigarette replacement, then, in my opinion, we've got to tax it, but we don't know that yet."
But Jodee Mason, a spokeswoman for Finance Minister Greg Dewar, said the province is not going to raise taxes on e-cigarettes.
Manitoba has among the highest tobacco tax rates in the country. At 29.5 cents per cigarette, it's almost half the price of the product.
E-cigarettes and their flavoured cartridges are subject only to the eight per cent provincial sales tax.
Products that are designed to help people stop smoking, such as nicotine patches or gum, are tax-exempt.
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Twenty percent of middle schoolers and 7.2 percent of high schooler e-cigarette users in the U.S. report never smoking cigarettes.
Early 2010 studies found that users got much lower levels of nicotine from e-cigarettes than from conventional cigarettes, but more recent studies show that experienced e-cigarette users can draw levels of nicotine from an e-cigarette that are similar to conventional cigarettes. Yet another study noted that the chosen e-cigarettes for the research malfunctioned for a third of participants. UCSF researchers say this indicates the need for stronger product standards and regulations.
To deliver nicotine, e-cigarettes create a spray of very fine particles that have yet to be studied in depth. "It is not clear whether the ultra-fine particles delivered by e-cigarettes have health effects and toxicity similar to the ambient fine particles generated by conventional cigarette smoke or secondhand smoke," wrote the researchers. But we do know that fine particulate matter from cigarettes and from air pollution are associated with an increased risk of cardiovascular and respiratory disease. And some research has found that the size and spray of fine particulate matter from e-cigarettes is just as great or greater than conventional cigarettes.
They're promoting the products as "harm reduction" for smokers, which allows them to protect their cigarette market while promoting a new product. Companies also using "grassroots" tactics to form seemingly independent smokers' rights groups, just like they did for cigarettes in the 1980s.
One clinical trial found that e-cigarettes was no more effective than the nicotine patch at helping people quit, and both cessation methods "produced very modest quit rates without counseling."