Federal and Provincial Governments May Split Marijuana Tax Revenue


This week, Prime Minister Justin Trudeau discussed new plans for a potential excise tax on the legal sale of recreational marijuana, the latter of which is set to take effect on July 1st, 2018.

“The proposal we put forward is $1 excise tax per gram, up to prices of $10, and 10% on prices over $10 per gram,” Trudeau said after a conference in Ottawa. “The proposal is to divide the revenue 50-50 between the federal government and the provincial government. The provinces argued that they are going to be bearing more costs, certainly upfront, in terms of installing the regime, and I certainly said we’re open to looking at that and discussing and making sure that we are doing this right.”

However, Trudeau has maintained that marijuana legalization is not primarily about tax revenue. “Nobody’s mindset on this approach is bringing in tax revenue on this,” he said. “The mindset that we’ve approached the legalization and control of marijuana from the very beginning has been from a public health and safety standpoint.” Trudeau also claims that the matters of taxation and revenue-sharing are still being negotiated with the provinces and he is open to hearing and addressing premiers’ concerns about the potential costs of regulation and enforcement at the provincial level.

B.C. Premier John Horgan is also optimistic about meeting the deadline next July, though he did not clarify the minimum age to purchase marijuana or which distribution-channels will be permitted in his province. “As a relatively new premier, I’m of the view that we can get things done in an accelerated way,” he said. “I think reality might smack me in the face in the months ahead, but today I believe that the deadlines are achievable.”

When asked by reporters about “age and distribution,” Horgan was well-prepared with a humourous retort: “I’m 58, and I’ve distributed my weight relatively evenly from head to toe.”


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