Ot­tawa propos­ing le­gal weed tax of at least $1 per gram


Ot­tawa and the prov­inces and ter­ri­to­ries could have an­other $1 bil­lion a year in tax rev­enues to split af­ter pot be­comes le­gal next year.

Lib­eral MP Bill Blair, for­mer Toronto po­lice chief and the gov­ern­ment’s point man on le­gal­iz­ing mar­i­juana, made pub­lic the fed­eral tax pro­posal for le­gal pot Fri­day, kick­ing off a pe­riod of pub­lic con­sul­ta­tions that ends Dec. 7.

That, Blair said, gives the gov­ern­ment just enough time to so­licit com­ments on the pro­posal so that fed­eral, pro­vin­cial and ter­ri­to­rial fi­nance min­is­ters can dis­cuss it when they meet in Ot­tawa Dec. 10-11.

The plan would add an ex­cise tax of $1 per gram of mar­i­juana or 10 per cent of the fi­nal re­tail price, whichever is higher, with the rev­enues to be di­vided equally be­tween Ot­tawa and the prov­inces and ter­ri­to­ries.

The fi­nal price, in­clud­ing pro­vin­cial and fed­eral sales taxes, would vary by ju­ris­dic­tion, since the com­bined to­tal is in some prov­inces is higher than in oth­ers. On an $8 gram of pot sold in On­tario, for in­stance, the fi­nal pur­chase price would be $10.17, with a $1 ex­cise tax and $1.17 HST. In New Brunswick, it would be $10.35.

Al­berta, which has no pro­vin­cial sales taxes, could see the cheap­est pot in the coun­try at just $9.45 to­tal for an $8 gram of weed.

“I’m very com­fort­able that the level of tax­a­tion that has been de­ter­mined as ap­pro­pri­ate in this case achieves our goals of keep­ing the price suf­fi­ciently low to be com­pet­i­tive with an il­licit mar­ket, while at the same time not cre­at­ing an in­cen­tive for the con­sump­tion and pur­chase of this drug,” said Blair.

“It’s a mat­ter of find­ing the right level of tax­a­tion and price in or­der to achieve both of those very im­por­tant pub­lic pur­pose aims. I be­lieve that the work that we have done sets a very ap­pro­pri­ate level.”

Blair gave $1 bil­lion a year as a very rough es­ti­mate of how much Canada and prov­inces stand to raise from the plan, al­though that num­ber is at the high end of the scale, he warned, since so much de­pends on just how many peo­ple will end up buy­ing mar­i­juana once it be­comes le­gal.

“We’re work­ing very closely right now to de­ter­mine what the size of that mar­ket will be,” he said.

He said de­ter­min­ing the mar­ket is very dif­fi­cult, but the tax will end up be­ing be­tween one-fifth and one-quar­ter of the fi­nal price, with tax rev­enues to be split 50-50 with the prov­inces and ter­ri­to­ries.

“The mar­ket is cur­rently con­trolled al­most 100 per cent by crim­i­nals,” Blair said. “It’s an il­licit mar­ket. Quite frankly, they don’t share a lot of data on the size of their mar­ket, so right now we’re op­er­at­ing on es­ti­mates.”

The taxes would be levied on both on fresh and dried mar­i­juana, pot-in­fused oils and seeds and seedlings used for home cul­ti­va­tion. Rev­enues would be used for pub­lic ed­u­ca­tion, re­search, en­force­ment and other ac­tiv­i­ties around the reg­u­la­tion and ad­min­is­tra­tion of le­gal pot.

The 50-50 tax rev­enue split idea has al­ready ran­kled at least one pre­mier — B.C.’s John Hor­gan — who com­plained that the prov­inces won’t be get­ting a fair share, con­sid­er­ing they will be do­ing the bulk of the heavy lift­ing on le­gal­iza­tion, in­clud­ing polic­ing, dis­tribut­ing and reg­u­lat­ing the sale of mar­i­juana.

The dis­cus­sions are still on­go­ing, said Blair, not­ing that the con­sul­ta­tion pe­riod will end just be­fore the pro­vin­cial and ter­ri­to­rial fi­nance min­is­ters gather Dec. 10 and 11 in Ot­tawa to sit down with fed­eral coun­ter­part Bill Morneau.

“It is part of an on­go­ing dis­cus­sion that our fi­nance min­is­ter is hav­ing with his coun­ter­parts, provin­cially and ter­ri­to­ri­ally,” Blair said. “It would be in­ap­pro­pri­ate of me to pre­sume the re­sults of the dis­cus­sions that are cur­rently tak­ing place ... there is still work to be done in the con­sul­ta­tions.”

Mu­nic­i­pal­i­ties, too, have re­cently in­di­cated they de­serve a share of the rev­enues.

“We have rec­og­nized right from the out­set that mu­nic­i­pal­i­ties are an im­por­tant stake­holder, and that they have a sig­nif­i­cant role to play in en­sur­ing that the reg­u­la­tory regime that is put in place is ef­fec­tive in achiev­ing our pub­lic pur­pose aims, of pro­tect­ing kids and keep­ing com­mu­ni­ties safe,” Blair said.


If you want to smoke le­gal weed ex­pect to hand over at least $1 for ev­ery gram you buy to the gov­ern­ment plus GST/HST.

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