INTRODUCTION: The aim of this study was to assess the potential impacts of the introduction of a smoke-free generation (SFG) policy in Canada with a perpetual ban on cigarette sales to anyone born after 2009 instigated on 1 January 2025.

METHODS: An existing Canadian model relating to smoking cessation was adapted and augmented to assess the impact of an SFG policy on quality-adjusted life years (QALYs), life expectancy, health care costs, smoking-related taxes, and Canadian tobacco industry gross domestic product (GDP). The cumulative impact of the policy for the entire Canadian population was assessed for time horizons up to 90 years with an annual discount rate of 1.5%.

RESULTS: After 50 years, this SFG policy would lead to 476 814 more QALYs, $2.3 billion less in health care costs, $7.4 billion less in smoking-related taxes and a $3.1 billion reduction in tobacco industry GDP. The combined value of health benefits gained and health care costs averted would exceed the sum of tax revenues foregone and reduced GDP, if the value of a QALY was at least $17 147. Use of higher discount rates and inclusion of unrelated health care costs had little impact on the interpretation of the results.

CONCLUSION: The implementation of an SFG policy will bring substantive health benefits to the population in Canada. Although health care cost savings are lower than the combination of lost tax revenues and the decline in the GDP from the Canadian tobacco industry, the value of the health benefits realized outweigh the negative offsets.