Pubdate: Tue, 05 Dec 2017
Source: National Post (Canada)
Copyright: 2017 Canwest Publishing Inc.
Contact: http://drugsense.org/url/wEtbT4yU
Website: http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Joan Bryden
Page: A8

FEDS WILLING TO BEND ON POT TAX REVENUES

Bigger share for provinces, territories

OTTAWA * The Trudeau government is willing to give provinces and
territories a bigger share of the revenue from a federal excise tax on
cannabis, provided that the extra money is devoted to helping
municipalities cope with the impact of legalizing recreational pot.

The feds have proposed giving provincial and territorial governments
half of the estimated $1-billion annual excise tax take once weed
becomes legal next July.

But The Canadian Press has learned that Finance Minister Bill Morneau
and his officials have signalled a willingness to increase that share
when they sit down next week with their provincial and territorial
counterparts.

The discussions have been taking place in preparation for a meeting of
federal, provincial and territorial finance ministers Dec. 10-11,
where the issue of cannabis taxation is expected to be front and centre.

Any increase in the provincial share will obviously mean less for
federal coffers. But precisely how much less than 50 per cent the
federal government is willing to accept has not yet been revealed.

A government official close to the discussions, who was not authorized
to speak publicly about the matter, said it's too early to float
specific numbers. The final decision will rest on an assessment of the
needs of the municipalities - and a willingness by provinces and
territories to agree to devote the extra revenue to those needs, the
official said.

Ontario Finance Minister Charles Sousa agreed that municipalities need
to be compensated for costs associated with marijuana
legalization.

"I've always said all along that the municipalities and the province
need to get a proper share to cover those costs," he said Monday.

"We have a lot of out-ofpocket (expenses) right at the start ... that
needs to be recovered. So we will work closely; we want to make sure
that municipalities are covered as well."

Mayors across the country have raised concerns about the potential
cost to municipalities.

"We all need to know that legalization will not download unsustainable
financial or operational burdens to municipalities," the Federation of
Canadian Municipalities says on its website.

Toronto Mayor John Tory has predicted municipalities will face
additional costs for policing, enforcement, public health, zoning and
licensing. He wrote Ontario Premier Kathleen Wynne last July, asking
her to consider dedicating a portion of provincial pot revenues -
possibly through a special levy - to municipalities.

Under the current proposal, the federal government would impose an
excise tax of $1 per gram of marijuana or 10 per cent of the final
retail price, whichever is higher, with half the revenue going to
provinces and territories.

Federal and provincial sales taxes would be applied on top of
that.

A one-month public consultation period on the excise tax proposal
closes Thursday, just ahead of next week's meeting.

Premiers have been complaining since early October, when Prime
Minister Justin Trudeau first unveiled the excise tax plan, that a
50-50 revenue split with Ottawa is not good enough. They maintain
their governments will shoulder the lion's share of the cost of
legalization - including public education, policing and road safety -
and should, therefore, get the lion's share of the tax revenue.

Under the federal proposal, sales and excise taxes would be levied on
both fresh and dried marijuana, pot-infused oils and seeds and
seedlings used for home cultivation.
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