Provinces in feud with feds over marijuana-proceeds from pot
OTTAWA — A cross-country squabble over how best to divvy up the proceeds of Canada’s coming legal-weed windfall is about to intensify as finance ministers gather for high-stakes talks in Ottawa.
For the provinces and territories, a key question looms: what entitles Ottawa to claim so much as half of the tax revenues that will start flowing when marijuana is legalized next summer?
In anticipation of legalization, the federal Liberal government — which has long insisted its plans were never about the money, but about keeping pot away from kids — has proposed an excise tax of $1 per gram or 10 per cent of the final retail price, whichever is higher.
An initial offer of a 50-50 split with the provinces was met with equal parts disdain and incredulity.
Provincial and territorial governments should get the lion’s share of the proceeds, since they’ll shoulder most — if not all — of the costs, they argue.
The federal government has since said it’s prepared to sweeten the pot — as long as some of that extra cash goes to cities. The Federation of Canadian Municipalities wants a third of the revenues earmarked to help municipal governments handle administrative and policing costs.
Meanwhile, it’s unclear just how big a share the feds are willing to accept. And to ministers like B.C.’s Carole James, it’s also unclear why they should retain any of it.
“Before we even get to talking about sharing, we want to hear about what responsibilities the federal government’s taking on to justify taking any of the percentage,” James said in an interview.
“Certainly, from our perspective the formula put out by the federal government is a no-go. That’s very clear.”
Ontario Finance Minister Charles Sousa also wants Ottawa to explain how it plans earn its share.
“I want to know what the feds are going to put in — what they’re going to pay for,” Sousa said in an interview. “I want us to have unity around Canada on this issue and I definitely want to see more because we’re bearing more of the costs.”
The added expenses likely to land with the provinces are expected to include public-awareness campaigns, beefed-up policing, busier court systems and increased road safety efforts.
“It’s completely inadequate — it’s a non-starter,” Manitoba Finance Minister Cameron Friesen said in an interview.
“If the responsibility resides with the provinces, then the resources must flow to the provinces. Any departure from that theme, then, must come with concessions from the federal government.”
There’s no guarantee that revenues will be higher than the associated costs, said Friesen — particularly considering Ottawa’s rushed timeline to legalize cannabis by July.