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Canada charges excise duty on alcohol, tobacco, cannabis and vaping products, and excise tax on fuel and some vehicles. Since 1 April 2026 the Canadian excise duty on spirits above 7% alcohol is $14.117 per litre of absolute alcohol, and licensed producers pay it when the goods are packaged.
What’s the difference between excise duty and excise tax?
People mix the two up all the time. Duties fall on goods made in Canada: spirits, wine, beer, tobacco, cannabis and vaping products. They come from the Excise Act, 2001 and the older Excise Act, which still covers beer. Excise taxes come from the Excise Tax Act and hit things like gasoline, diesel, aviation fuel, fuel-inefficient vehicles and car air conditioners.
That same Excise Tax Act also holds the rules for GST and HST, which is why a search for the excise law so often lands on sales tax pages. If your real question is about GST or the harmonized rates, the GST and HST calculator is the tool you want.
Duty rates in force from 1 April 2026
| Product | Rate | Law |
|---|---|---|
| Spirits up to 7% alcohol | $0.358 per litre | Excise Act, 2001 |
| Spirits above 7% alcohol | $14.117 per litre of absolute ethyl alcohol | Excise Act, 2001 |
| Wine up to 1.2% alcohol | $0.022 per litre | Excise Act, 2001 |
| Wine over 1.2% up to 7% | $0.358 per litre | Excise Act, 2001 |
| Wine over 7% | $0.745 per litre | Excise Act, 2001 |
| Beer over 2.5% alcohol, regular rate | $37.69 per hectolitre | Excise Act |
| Cigarettes | $0.97299 per 5 cigarettes | Excise Act, 2001 |
Small domestic brewers get reduced beer rates that depend on annual volume. Cannabis duty varies by province and uses a flat rate or a percentage of price, whichever is greater, and vaping products have a schedule of their own.
Tobacco rates are adjusted every April for inflation, so an older table will be out of date.
Who needs a licence?
Anyone who makes or packages dutiable goods in Canada must be licensed, and most licensees must post at least $5,000 in security. The duty falls due when spirits, wine, tobacco or beer are packaged, when cannabis is delivered, or when vaping products are stamped.
Excise tax on fuel and similar goods works differently. Manufacturers need an E licence unless yearly sales are under $50,000, and wholesalers can apply for a W licence, which lets them buy tax-deferred goods for resale. Importers pay the tax as the goods enter Canada.
How much does the duty add to a bottle?
Take a one litre bottle of spirits at 40% alcohol. It holds 0.4 litres of absolute alcohol, so the duty is 0.4 times $14.117, or $5.65. The producer or importer pays that before the bottle is sold, and it ends up in the shelf price. GST or HST then applies to the final selling price.
The same logic holds if you resell a taxed product: the duty is already inside your cost, so you don’t add it again. To strip sales tax out of a final price and see the base you started with, use the HST reverse calculator.
Common mistakes with excise
- Treating duty as sales tax. GST or HST is charged on top of duty, not instead of it.
- Using old rate tables. Tobacco, spirits and wine change each April, and beer rates follow their own adjustment rules.
- Forgetting security. Most licence holders must post at least $5,000.
- Ignoring imports. Importers pay excise tax when goods enter Canada.
Run a small firm that sells taxed goods and you’ll want payroll and sales tax in order as well. The payroll remittance calculator covers source deductions, and the corporate tax calculator estimates income tax on business profit.
Where the numbers come from
Rates and licence rules are from the Canada Revenue Agency excise duty pages for the period beginning 1 April 2026, read on 30 September 2026. The site has no link with any government body, and what’s here is general information, so ask the CRA about a specific licence.
Frequently asked questions
What is the difference between excise duty and excise tax?
Duty applies to alcohol, tobacco, cannabis and vaping goods. Excise tax applies to things like fuel and fuel-inefficient vehicles.
Which laws cover excise in Canada?
The Excise Act, 2001, the Excise Act (beer) and the Excise Tax Act, which also holds the GST and HST rules.
Who needs an excise licence?
Manufacturers and producers of dutiable goods. Most licensees must post at least $5,000 as security.
Is GST charged on top of excise duty?
Yes. GST or HST applies to the selling price, and that price already includes the duty.
How often do duty rates change?
Tobacco, spirits and wine rates are adjusted each April, so check the current table before you calculate.
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.