Can Electronic Cigarettes Save All Canadians Money?

The debate over tobacco use, tobacco taxation, and the health care costs associated with tobacco use in Canada has always been heated.  Smokers generally take the position that it is a private activity and they should have the freedom to partake.  They also argue that the money they spend on cigarettes, which about 63% to 80% is taxes, pays to offset the costs of future health care for smokers.  Non-smokers are generally adamant that the revenue from tobacco sales is a far cry from covering all the associated health costs.

So lets look at the numbers.  This is from a CBC article last updated in 2007 using statistics from 1993.  Although these numbers have changed over time, this will give us a relative comparison between tobacco tax revenue and associated health care cost:

They estimate that, in Canada, the societal costs attributable to smoking for 1993 were approximately $11 billion, of which $3 billion was spent on direct health care costs such as hospitalization and physician time. The remaining $8 billion was due to lost productivity. In comparison, it is estimated that in 1993/94, revenue from taxes on cigarettes totalled $2.6 billion. – from The Cost of Smoking on CBC.

As you can see, it is fairly straight forward.  The tobacco tax revenue generated was approximately $400,000,000 less than the money spent directly on health care costs.  This doesn’t include the additional $8 billion estimated on lost productivity due to smoking.  So how can electronic cigarettes help?

Let’s just say that every smoker switches to e-cigarettes.  Let’s say, hypothetically that e-cigarettes, like other smokeless tobacco, carry a harm rate of 5% of tobacco smoking, as estimated by the International Agency for Research on Cancer. That equates to a cost of %5 of $3 billion or $150 million.  There is no lost productivity for smoke breaks with e-cigarettes (provided Canada doesn’t get pseudo-scientific and ban indoor use) and only 5% of the lost productivity due to hospital stays.  So on the high end it would be 5% of the lost productivity associated with smoking, or $400 million.

With no extra taxation on electronic cigarettes, the total monetary loss is at $550 million.

The net monetary cost of tobacco cigarettes is around $8.4 billion.  This does not take into consideration the cost of human suffering and death associated with smoking cigarettes.

Based on these rough numbers, electronic cigarette use has the potential to save the Canadian government $7.85 BILLION.  No matter how you do the numbers, e-cigarettes will cost the Canadian government, and hense the people, less money than smoking.

If you just argued that all smokers should just quit altogether, that has been tried and has failed.  Replacing tobacco smoking with vaping is a reasonable and achievable goal with the help of regulatory agencies and public health advocates.

 

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