Ottawa proposes marijuana tax: $1 per gram – plus GST - Macleans.ca
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Ottawa proposes marijuana tax: $1 per gram – plus GST

The government will accept comments on the proposed tax on legal marijuana until early December


 
Marihuana joint on fire, in the lips

Marihuana joint on fire, in the lips

OTTAWA – Anyone planning to purchase legal marijuana next year better be prepared to pay the taxman as well, to the tune of at least $1 for every gram – plus GST.

The proposed federal tax scheme, announced Friday, will be available for public comment until Dec. 7 as Canada prepares to legalize the drug by next summer.

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

RELATED: How big is Canada’s marijuana market, really?

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 Liberal MP Bill Blair, the government’s point man on legalizing marijuana.

“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.”

GST will be also be applied, so if the retail price of a single gram of pot is $8, consumers would pay a $1 excise tax and $1.17 in GST for a total of $10.17.

The taxes would be levied on both on fresh and dried marijuana, pot-infused oils and seeds and seedlings used for home cultivation.

RELATED: Ontario plans dozens government-run marijuana shops

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.”

RELATED: How will Canadian universities handle legal marijuana?

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.

“As I’ve travelled across the country, I’ve always made a point in virtually every town I’ve gone into to go and meet with the mayor and the local chief of police to hear that perspective, and we’ve carried their concerns back, and we’ve responded to that already in a quite significant way.”

The government has already committed resources to municipalities, including $81 million for municipal and Indigenous police services to help offset the cost of additional training and resources, he added.


 

Ottawa proposes marijuana tax: $1 per gram – plus GST

  1. Cost in BC for a gram of legal weed = $8 + $1 (weed tax) + $0.45 (GST) + 0.63 (PST) = $10.08

    Cost from friendly neighbourhood dealer (assuming all else equal, which it won’t be) = $8

    Yet to be seen is if the expense of government run weed shops (which is what the union-friendly BC NDP government will almost certainly opt for) will increase this cost even more.

    So, I’m not sure that Bill Blair should be so optimistic about legal weed being competitive with illegal weed.

  2. Now we know what our children’s mental health is worth to Trudeau.

    He’ll never see it though. Your roadside blood samples, lab tests for impairment and subsequent challenges in court will burn that up and then some.

    It’s not only our money.

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