Pubdate: Fri, 29 Jan 2016
Source: Toronto Star (CN ON)
Copyright: 2016 The Toronto Star
Contact:  http://www.thestar.com/
Details: http://www.mapinc.org/media/456
Author: Bruce Cheadle
Page: A11
Referenced: Growing Their Own Revenue: The Fiscal Impacts of Cannabis 
Legalization by Avery Shenfeld, See pages 7-8: http://mapinc.org/url/M8hr2Qpz

LEGAL POT REVENUE COULD REACH $5B A YEAR

New Cibc Economic Report Estimates Liberals' Promise Will Generate 
Billions in Taxes

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

Areport from CIBC World Markets says 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 estimates of 
Canadian recreational pot use, 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 made MP Bill Blair, the former Toronto police chief, 
the lead on investigating a new regulatory model.

Trudeau maintains that 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 money-maker, it was always about public health, 
public safety," he said in December.

The experience of Washington state and Colorado, 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 concludes.
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MAP posted-by: Jay Bergstrom