Albertans face new taxes on EVs, vaping products in 2025

Albertans who drive Teslas and other fully electric vehicles will have to pay an extra $200 when they renew their annual vehicle registrations, starting in early 2025. 

The EV tax is one of two new provincial tax increases to take effect this year. A tax on vaping products starts on Jan. 1. The EV registration fee will take effect after a bill that was passed by the legislature has been proclaimed into law.

Both measures were announced last February in the province's 2024-25 budget.

Finance Minister Nate Horner justified the EV fee because owners don't pay a fuel tax, which is used to maintain provincial highways. The province also says EVs are harder on pavement than gas-powered vehicles because of their heavy batteries.

William York, Edmonton-based president of the Electric Vehicle Association of Alberta, said the provincial government is using the fee to punish EV owners. He disputes the reasons behind it. 

York said gasoline-powered pickup trucks and SUVs can be heavier and harder on roads than many EVs. He said gasoline vehicles impose a different cost on society by polluting the air and environment. 

"Their pollution isn't taken into account," York said. "We kind of call this in our circles 'the clean air tax' because they're attacking vehicles that actually make the air cleaner."

York said the tax likely won't dissuade potential EV buyers due to the bigger savings from not having to pay for gas and oil changes.

The federal Liberal government wants to ban sales of new vehicles powered by gasoline starting in 2035. 

Vape tax

The provincial vaping tax will be applied starting Wednesday in addition to the current federal taxes.

The rate is $1.12 per 2 millilitres for the first 10 millilitres of a product, then $1.12 per 10 millilitres for any additional amount.

The province is adding the tax to keep young people from buying the products.

Les Hagen, executive director of Action on Smoking and Health, said price increases have been effective in reducing tobacco smoking among youth. 

"We anticipate the same with a vaping tax increase," he said. "There is evidence showing that vaping taxes actually do help to reduce youth vaping."

Hagen would like government to go further by banning flavoured vaping products targeted at young people. 

The federal government has promised to prohibit any flavouring with the exception of tobacco, mint and menthol. Ya'ara Saks, the federal minister of mental health and addictions, said in October that a national ban was coming soon.

Hagen hoped it will happen in early 2025.

"The data shows, the science shows, that flavours are the No. 1 appealing element of vaping for kids," he said. 

"Nicotine is one of the most harmful substances or one of the most addictive substances on the planet. And we know that young people are particularly at risk because of their developing brains."