Pubdate: Wed, 06 Dec 2017
Source: Northern News (CN ON)
Copyright: 2017 Northern News
Contact: http://www.northernnews.ca/letters
Website: http://www.northernnews.ca/
Details: http://www.mapinc.org/media/2315
Author: Brad Sherratt
Page: A1

KIELY QUESTIONS FEDS POT REVENUE PROPOSAL

KIRKLAND LAKE - Councillor and Finance Chair Pat Kiely is skeptical
municipalities will see extra revenue from an excise tax on cannibis.

The Trudeau government says it 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
during discussions 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.

Kiely says "If the Federal government is prepared to pass on 50 per
cent plus of the excise tax revenues to the Province , the question
really is how much of the revenues will be filtered down to the
municipalities. Once legalized recreational use of these drugs goes
into effect, additional costs for public education, policing, and
abuse resulting in increased health costs. Will there be enough
dollars being devoted towards these issues. The Province has a history
of keeping the lion's share of Federal funding. Even if the
municipalities received 25 per cent of the tax revenue from the
Province. Will that be enough to offset the costs of the social and
health issues that are a result of legalization? I don't think so.
Remember, "Big Pot Is Big Business" and the push to legalization was
really all about profit."

Ontario Finance Minister Charles Sousa stated that municipalities need
to be recompensed 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-of-pocket (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."

However, before agreeing to anything, Sousa said he needs to see a
breakdown of the costs that are going to be incurred and how much of
those costs the federal government is prepared to assume. He said he
expects to hear more on that front at the finance ministers' meeting
next week.

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

Jenny Gerbasi, president of the Federation of Canadian Municipalities,
welcomed the news that municipal needs are being taken into account.

"Local governments are on the front lines of legalizing recreational
cannabis, and we're doing what we can to get ready," she said.
"Growing our operational and enforcement capacity is a big job with
big costs."

The federal government is sympathetic to the concerns of
municipalities, the official said.

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 on Dec. 7, just ahead of the finance ministers' 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.

Co-ordinating cannabis taxation with the provinces is crucial to the
federal objective of drumming organized crime and gangs out of the
illegal pot business and keeping marijuanaout of the hands of minors.
If the price of legal marijuana is not competitive, the black market
will continue to flourish.

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.

They would also be applied to medical marijuana, on which only HST is
currently levied. That proposal has drawn fire but the government
argues it's necessary to ensure there's no incentive for people to
seek out medical pot just because it's cheaper.

The final price tag for legal weed will vary across the country
because provinces have different sales taxes.
- ---
MAP posted-by: Matt