SUBSTITUTION EFFECT | Canadian Flavour Bans Increase Smoking | RegWatch

2026-02-26

Canadian flavour bans were sold as a public health win, but the data says otherwise. In this episode of RegWatch, economist Dr. Michael Pesko breaks down new research examining the real-world impact of provincial bans on flavoured nicotine vaping products. Using retail sales data from across Canada, Pesko and his co-authors found that nicotine vape sales fell by roughly 30 percent after provincial flavour bans took effect, while cigarette sales rose by nearly 10 percent. It’s evidence of a substitution effect i...

Canadian flavour bans were sold as a public health win, but the data says otherwise.

In this episode of RegWatch, economist Dr. Michael Pesko breaks down new research examining the real-world impact of provincial bans on flavoured nicotine vaping products. Using retail sales data from across Canada, Pesko and his co-authors found that nicotine vape sales fell by roughly 30 percent after provincial flavour bans took effect, while cigarette sales rose by nearly 10 percent.

It’s evidence of a substitution effect in action—cutting directly against public health goals.

We also examine Canada’s escalating excise taxes, the growth of illicit markets, and prohibition-style violence targeting vape retailers, reminiscent of dynamics long associated with organized crime.

Is this policy failure, or exactly the outcome economic theory predicts?

Find out, only on RegWatch by RegulatorWatch.com.

https://youtu.be/_TpCw3qrqbs

Released: February 26, 2026
Produced by: Brent Stafford

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