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Canadian Finance Ministers Hash Out Cannabis Taxes

June 19, 2017
Ottawa, where Canadian life gets decided
For a second day in Ottawa, Canadian finance ministers from the federal, provincial, and territorial levels are gathering to strategize a coordinated approach to cannabis legalization.
At the top of two-day summit’s agenda: cannabis sales tax, which the federal government is urging provinces and territories to keep low, in an effort to hobble the black market. “The Liberals have repeatedly said the purpose of making marijuana legal is to keep it out of the hands of children and criminals,” writes CBC News. “Setting a low [tax] rate… will help drive drug dealers out of the market.”


Massachusetts Whiplash: Cannabis Tax Pulled Back to 12%

But while a low tax rate might ding dealers, it also restricts revenue that could help provinces adapt to the legal marketplace, with some officials worrying that recreational cannabis revenues won’t cover the costs of regulation, which range from education and addiction-treatment programs to enhanced policing. “There’s going to be a lot of requirements on behalf of the provinces,” said Ontario Finance Minister Charles Sousa to the Canadian Press. “We want to make sure that the proper sharing is there and enough is supported for the implementation of cannabis and the protection (of) our society as we proceed.”

Addressing these concerns, Federal Health Minister Jane Philpott has promised enhanced support to provinces dealing with such cannabis-related needs as public security and educational campaigns. Philpott’s office also noted the vast expense of prohibition, and suggested legalization might substantially cut provinces’ existing expenses. As the Canadian Press writes, “The trick for Canada’s lawmakers will be finding the pricing sweet spot—high enough to cover costs, but cheap enough to squeeze out the illegal market.”


Cannabis Tax Revenue Is Overwhelming Oregon’s Tax Office

(Meanwhile, 503 kilometers southeast of Ottawa in Boston, Massachusetts, lawmakers are embroiled in their own cannabis-tax brouhaha, wrangling over a House bill that would hike taxes on recreational marijuana from 12 percent to 28 percent—a move that’s inspired passionate op-eds and a late-breaking counter-plan to keep taxes where they are.)

Back to Ottawa: In addition to taxes, the gathered finance ministers are discussing an array of other cannabis-related topics, including improved information-sharing between jurisdictions and the cost of training police to detect THC-impaired drivers (who should pay—provinces or the feds?). “We remain committed to developing a balanced framework that is focussed on protecting youth, maximizing public health and road safety, and reducing harm,” said Ontario’s finance minister Charles Souza in a statement. “It is important to hear from all provinces as we move forward with ground-breaking legislation for all of Canada.”

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Dave Schmader

Dave Schmader is the author of the book "Weed: The User's Guide." Follow him on Twitter @davidschmader

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  • Robert Wright

    These clowns are going to drive the price up so they can fill their greedy pockets the black market as they like to call it will not only thrive they will probably make more money than they are now. If they drive the price up to $15 a gram the so called black market will just sell for less this was not the right way to get rid of the black market making it as worthless as tomatoes is what drives black markets away as long as there is profit or a money savings for cannabis users there will be a black market .