The Canadian Press
Joan Bryden
OTTAWA–The Trudeau government is willing to give provinces and territories a bigger share of the revenue from a federal excise tax on cannabis–provided that the extra money is devoted to helping municipalities cope with the impact of legalizing recreational pot.
The feds have proposed giving provincial and territorial governments half of the estimated $1-billion annual excise tax take once weed becomes legal next July.
But The Canadian Press has learned Finance minister Bill Morneau and his officials have signalled a willingness to increase that share during discussions with their provincial and territorial counterparts.
The discussions have been taking place in preparation for a meeting of federal, provincial, and territorial finance ministers Dec. 10-11, where the issue of cannabis taxation is expected to be front and centre.
Any increase in the provincial share obviously will mean less for federal coffers. But precisely how much less than 50 percent the federal government is willing to accept has not yet been revealed.
A government official close to the discussions, who was not authorized to speak publicly about the matter, said it’s too early to float specific numbers.
The final decision will rest on an assessment of the needs of the municipalities–and a willingness by provinces and territories to agree to devote the extra revenue to those needs, the official said.
Mayors across the country have raised concerns about the potential cost to municipalities.
“We all need to know that legalization will not download unsustainable financial or operational burdens to municipalities,” the Federation of Canadian Municipalities says on its website.
Toronto Mayor John Tory has predicted municipalities will face additional costs for policing, enforcement, public health, zoning, and licensing.
He wrote Ontario Premier Kathleen Wynne last July, asking her to consider dedicating a portion of provincial pot revenues–possibly through a special levy–to municipalities.
“Whatever decisions are made, I have no doubt the result will be increased costs for the City of Toronto,” Tory wrote.
Under the current proposal, the federal government would impose an excise tax of $1 per gram of marijuana or 10 percent of the final retail price, whichever is higher, with half the revenue going to provinces and territories.
Federal and provincial sales taxes would be applied on top of that.
