Alberta has to figure out how to tax weed buyers
Alberta will be ready for legalized cannabis in 2018 but has work to do in developing a tax regime for the product, Finance Minister Joe Ceci said Monday.
Ceci attended a meeting of federal and provincial finance ministers in Ottawa where legal weed was on the agenda.
The federal Liberal government has set a date of July 1, 2018, to keep its campaign promise to legalize recreational marijuana and provinces are currently working to develop a regulatory regime.
One issue Alberta must grapple with is the lack of a provincial sales tax, Ceci acknowledged as he spoke to reporters in a televised news conference.
“Without a provincial sales tax, we need to ensure that we receive adequate monies to address the costs of having cannabis available for distribution and sale in our province, whether that’s on the health side or the enforcement side or the education side,” he said.
“So, we’re going to look at how to make it happen.”
As well, some sort of provincial tax is needed on legalized cannabis to ensure it is not significantly cheaper in Alberta than in other jurisdictions, said Ceci.
Some provinces, notably Manitoba, have asked Ottawa to push back the deadline for marijuana legalization to allow provinces more time to develop their regulatory regime.
Ceci said Alberta is not looking for an extension, however.
“We are following through with what we need to do to be prepared for that date,” he said. “We’re going to be ready.”
Alberta’s NDP government recently launched consultations around legalized cannabis, looking at issues such as the legal age for consumption and where the product should be sold. But the province’s online survey touches only briefly on the issue of taxation, noting that the province does not expect a major amount of revenue from the sale of pot.
Federal Finance Minister Bill Morneau said discussions Monday were at a high level and did not address potential revenue from legalized cannabis, nor revenuesharing between Ottawa and the provinces.
He said Ottawa is focused on ensuring co-ordination among different governments across Canada and keeping the rate of taxation of legal marijuana at a level low enough to end the current black market.
“We have not gotten to conclusions yet. We’ve seen today as a day to talk about that principle. I found it to be a very productive discussion,” said Morneau.
Both Morneau and Prime Minister Justin Trudeau rejected the idea of extending the timeline for legalization.
“We gave everybody lots of time,” Trudeau said in Ottawa. “We’ve been working for a long time with all the provinces, with the municipalities.... It’s time for us to move forward on this.”
Morneau acknowledged after the meeting that several of the provinces said there’s still much work to be done.
For provinces that aren’t ready in time for the “fixed date,” Ottawa will oversee a mail-order sales program, Morneau said.
Consumers would be able to buy pot through a federally licensed producer and receive home delivery.
Provincial ministers have said they intend to push the feds to ensure they receive a share of pot-related tax revenue that fairly reflects the added costs provinces will have to assume on the road to legalization.
Prior to the meeting, Ontario Finance Minister Charles Sousa insisted he had yet to consider how much pot-related revenue his province could bring in because he’s been more concerned about ensuring legalization is handled properly.
His Quebec counterpart, Carlos Leitao, said the provinces should receive most of the tax revenue from legalized pot because they will “have to shoulder most of the costs of putting in place regulations.”
The federal government has vowed to work with provinces on implementation and to commit more resources to needs such as public security, policing and educational campaigns. It has also argued that marijuana prohibition is very expensive and that legalization could significantly cut down on costs.