Finance ministers to start deep dive on marijuana tax

As the country’s finance ministers meet in Ottawa, the Trudeau government should expect to hear concerns about the added burden marijuana legalization could heap onto provincial shoulders.

The agenda for the two-day, federal-provincial-territorial gathering, which starts Sunday, will include discussions on how best to apply taxes on a regulated market for cannabis.

The federal government introduced legislation in April with a goal of legalizing and regulating the use of recreational marijuana by July 2018.

Pot taxation is expected to stay low to ensure the regulated market elbows out illegal dealers.

Details, however, on how the tax revenues will be shared between provinces and Ottawa have yet to be determined.

The ministers are scheduled to start working on a “co-ordinated approach to the taxation of cannabis,” says a news release from the office of federal Finance Minister Bill Morneau, who hosts the twice-yearly meetings.

Taxation is poised to emerge as a key focal point of Canada’s pot-legalization process.

Since the federal legislation was tabled, several provinces have voiced concerns about how much work will fall within their jurisdictions - from addiction treatment, to distribution, to policing.

For example, Alberta Premier Rachel Notley has warned that provinces will be left with a lot of the “heavy lifting” related to pot legalization, including considerable costs.

In Quebec, Public Health Minister Lucie Charlebois has expressed doubts the tax revenue generated by recreational pot will cover the price tag of preparing for regulation, particularly when it comes to health, security and education efforts.

Ontario Finance Minister Charles Sousa said in an interview he is not apprehensive about cannabis legalization, he just wants to ensure the transition into regulated markets doesn’t impose any extra costs on provinces.

“There’s going to be a lot of requirements on behalf of the provinces,” said Sousa.

“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.”

Sousa said he will also be keen to hear how his counterparts are approaching legalization.