Provincial finance ministers reject federal 50-50 pot tax split plan – Politics

Provincial and territorial ministers hope to strike a deal today on a tax-sharing plan for legalized pot in Canada.

Heading into the meeting with federal Finance Minister Bill Morneau in Ottawa, ministers said a proposed 50-50 split is a non-starter because the provinces and municipalities will shoulder the majority of costs for police enforcement, health care and education programs once marijuana becomes legal in July.

Ontario Finance Minister Charles Sousa suggested a deal is “pretty close,” but warned that some provinces feel uneasy about the uncertainty of how the pot legalization program will roll out.

“Some provinces get annoyed that we didn’t ask for this, didn’t provide for this, you’re imposing upon the provinces and we have no flexibility,” he said.  “So the federal government has to come up with some of that flexibility to provide some support to the provinces and municipalities that are being affected.”

Sousa said the price point for marijuana must match or beat illegal sellers to meet the objective of shutting down the black market.


Ontario Finance Minister Charles Sousa suggested a deal is ‘pretty close,’ but warned that some provinces feel uneasy about the uncertainty of how the pot legalization program will roll out. (Sean Kilpatrick/The Canadian Press)

A proposed federal revenue framework announced earlier this month called for marijuana to be taxed at $1 a gram or 10 per cent of the final retail price, whichever is higher, with revenues split evenly between the federal government the provinces and territories.

Provincial pushback

With pushback from the provinces, Morneau said Monday the federal government will be reasonable and flexible with the tax revenue-sharing formula.

Most provinces and territories are “on board” with the principle of legalizing marijuana as a way to restrict access to minors and get it out of the hands of criminals.

“Now we’re just talking about how do we meet up to the goals of negotiating in a way that appreciates the costs,” he said. “Like any negotiation, there’s going to be back and forth. I think we’re making progress.”

Manitoba Finance MInister Cameron Friesen said the provinces are assuming the bulk of risks and responsibilities, from roadside testing to mental health.

Quick deal needed

Since Manitoba’s request for an extended time line was rejected by the federal government, he expects a “fast and appropriate” tax revenue model.

“We’ll be advocating for an excise division that locates the majority of those resources in the hands of the provinces,” he said.

Quebec Finance Minister Carlos Leitão said it is important to reach a deal quickly that finds an equitable distribution of dollars.

“Our objective is to drive out the illicit market and to succeed in doing that, we need to have one Canadian approach. If each province goes its own way we will never get there,” he said.

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