A new tobacco tax introduced in Nunavut last year appears to have paid immediate dividends, as the government of Nunavut says that sales are down across the territory.

The tax, introduced in March of 2017, hiked the cost of a pack of cigarettes by about one dollar. Taxes on loose tobacco and chewing tobacco increased by 20 cents a gram.

For the 10 months following its introduction, the territorial government said sales of cigarettes declined two per cent year-over-year. Loose tobacco sales declined by 29 per cent, while chewing tobacco sales declined 15 per cent.

"We take it as a good news story," said Daniel Young, the director of fiscal policy for the territorial government.

"The more people that we can prevent from starting to smoke, the more smokers we can encourage to smoke less, is great."

Nunavut has Canada's highest smoking rates — estimated at 62 per cent in 2014 Statistics Canada data. In 2016, a territorial government representative estimated that nine out of 10 pregnant women in the territory smoke.

Young also said the decline in sales could be due to anti-smoking rules. He also added that despite declines in sales, the government collected an extra $3 million in revenue due to the tax.