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Provincial finance ministers rebuke Ottawa’s proposed 50-50 split on cannabis tax

Provincial finance ministers rebuke Ottawa’s proposed 50-50 split on cannabis tax

Since they will shoulder most of the costs associated with legalization, Canada’s provincial leaders say they deserve more than half of the tax revenue.

The provincial and territorial governments insist they should get the lion’s share of the funds because they’ll shoulder most — if not all — of the costs associated with legalization.

But federal Finance Minister Bill Morneau will counter with an argument during the meetings that Ottawa has already made big financial commitments towards pot legalization, said a senior government official.

Morneau will explain that he’s already earmarked more than $1 billion toward legalization over the next five years, with a focus on areas such as public safety, policing and awareness, said the official, who spoke on condition of anonymity because they were not authorized to speak publicly.

Nearly $700 million of that commitment was outlined in Morneau’s recent fall economic update.

“We’ve identified significant funds that we are going to put forward in that regard,” Morneau said on Sunday as he headed to a working dinner with his provincial and territorial counterparts.

“We need to cover our costs — they’re legitimate.”

At the same time, Morneau added that it’s important to consider how municipalities and provinces will cover the costs required.

Negotiations will be centred on the federal Liberal government’s proposal to impose a cannabis excise tax of $1 per gram or 10 per cent of the final retail price, whichever is higher.

credit:420intel.com