Health Canada will receive the bulk of the more than half-a-billion dollars the Federal government has earmarked to get the recreational marijuana industry ready for its July 2018 legalization target, according to a breakdown of the funds provided by Finance Canada.
Ottawa said in its fall economic statement last week that it would provide $526 million in new funding, spread out over five years, to Health Canada, the RCMP, the Canada Border Services Agency and Public Safety Canada, with an additional $20 million coming from existing or internal sources.
Of the total, $432 million will be dedicated to Health Canada, $68 million to the Mounties, $40 million to the CBSA, and $6 million will be earmarked for Public Safety, the finance department said.
The funding is “to ensure there is appropriate capacity to license, inspect and enforce all aspects of the proposed Cannabis Act (the legislation that would legalize recreational marijuana) and to undertake robust public education and awareness activities,” the update said.
“The implementation of a cost recovery scheme under the proposed Cannabis Act will reduce the overall fiscal profile of this initiative,” it added.
Prime Minister Justin Trudeau raised the possibility of a 10 per cent tax on marijuana sales in early October, but a Finance Canada spokesperson said in an email that the government’s revenues come “from a variety of taxes and other sources.” The Cannabis Act initiative, however, “is not linked to any specific source of revenue.”
In an email statement, Health Canada said it would use the funding to craft “a new regulatory approach, including licensing and inspection, compliance and enforcement, monitoring and research, as well as a national public education and awareness campaign, tracking systems and program support.”
The agency indicated that the funds would at least in part come from money collected from customers and cannabis companies.“The Government intends to offset the cost of implementing this new regulatory approach by collecting regulatory fees, as well as through revenues generated through taxation and cost recovery,” added a spokesperson. “Further information will be made available in due course.”
The government’s Cannabis Act was sent back to the House of Commons earlier this month with tweaks recommended by a parliamentary committee. The government still aims to legalize recreational cannabis by July 2018, barring any delays or changes.
The Act also allows the government to establish fees for “approvals, authorizations, exemptions or regulatory processes,” in addition to fees tied to services, products and a cannabis tracking system.
A spokesperson for Public Safety Canada noted a September announcement of up to $274 million, “to support law enforcement and border efforts to detect and deter drug-impaired driving and enforce the proposed cannabis legalization and regulation.”
“Finance Canada will consult shortly on a proposed new taxation regime on cannabis, which will take into account the goals of keeping cannabis out of the hands of youth and profits out of the hands of criminals,” a press release noted.
credit:420intel.com
