Pubdate: Fri, 29 Jan 2016
Source: Victoria Times-Colonist (CN BC)
Copyright: 2016 Times Colonist
Contact:  http://www.timescolonist.com/
Details: http://www.mapinc.org/media/481
Author: Bruce Cheadle
Page: B1
Referenced: Growing Their Own Revenue: The Fiscal Impacts of Cannabis 
Legalization by Avery Shenfeld, See pages 7-8: http://mapinc.org/url/M8hr2Qpz

GOVERNMENT REVENUE FROM LEGAL POT COULD REACH $5 BILLION A YEAR: BANK

OTTAWA - Call it Prime Minister Justin Trudeau's secret stash.

A report from CIBC World Markets said Canada's federal and provincial 
governments could reap as much as $5 billion annually in tax revenues 
from the sale of legal marijuana.

CIBC economist Avery Shenfeld crunched the numbers using current 
estimates of Canadian recreational pot consumption, the revenue 
experience in U.S. states that have legalized, and other factors - 
such as prevailing "sin tax" rates on alcohol and tobacco. "The 
bottom line is that federal [and] provincial governments might reap 
as much as $5 billion from legalization, but only if all the 
underground sales are effectively curtailed," writes Shenfeld. 
"That's on the order of 0.25 per cent of GDP, no barnburner."

The Liberal government has promised to legalize, tax and regulate 
marijuana and has made MP Bill Blair, a former Toronto police chief, 
the lead on investigating a new regulatory model. Trudeau maintains 
legalized pot will not be a cash cow, and that all revenues will be 
used to address mental health and addictions issues.

"It was never about a moneymaker, it was always about public health, 
public safety," the prime minister said in December during a yearend interview.

The experience of Colorado and Washington states, where pot sales 
were legalized and taxed, suggests no dramatic increase in marijuana 
usage but a potential for pot tourism.

"The desirability of increased marijuana tourism inflows will be 
questioned, no doubt, but they would generate additional fiscal 
revenues for government on their other tourist spending," Shenfeld writes.

The report uses Colorado sales figures to estimate a Canadian pot 
market worth about $10 billion annually, then looks at net profit 
margins from Ontario's government booze monopoly and other associated 
income and payroll taxes to come up with the revenue total.

Shenfeld also suggests that the oft-touted law-enforcement savings 
from pot legalization may not materialize due to ongoing 
international obligations to stop marijuana exports and the 
enforcement needed to curb the untaxed black market.

"Deficits won't simply go up in smoke as a result," he concluded.
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MAP posted-by: Jay Bergstrom