Canadian Government Calls For Excise Tax On Both Recreational And Medical Cannabis

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Canadians have been patiently waiting to hear Prime Minister Justin Trudeau’s recommendation to levy a federal excise tax on recreational cannabis which is set to gain legal status next July. However, on Friday further details were announced on the excise tax and it is fair to say that many Canadians were left perplexed and disappointed.

Shock and anger spread across the country as the news hit that the Federal government is planning on applying the excise tax on both recreational and medical cannabis sales. This is a huge slap in the face to the groups who already were calling on Ottawa to remove the sales tax that is currently applied to medical cannabis.  So, when the announcement was made on Friday, we learned that not only will the sales tax continue, the proposed excise tax would also be applied to all medical cannabis sales.

 

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The final price, including both the current provincial and federal sales taxes along with the proposed excise tax, would vary depending on each of the provinces sales tax. For example, an $8 gram of cannabis sold in Ontario, would have a final purchase price of $10.17/gram, with a $1 excise tax and $1.17 HST. In New Brunswick, it would be $10.35/gram. Alberta, which has no provincial sales tax, would see the cheapest pricing in the country at just $9.45/gram.

Advocacy groups, such as Canadians for Fair Access to Medical Marijuana (CFAMM) and the Arthritis Society, both believe that medical cannabis should share status with all other prescription medications, and that applying the excise tax disadvantages patients unfairly.

Bill Blair responded that the Liberal government does not want taxation levels to be an incentive for people to utilize that system inappropriately. Their proposal for taxation levels will curb that instinct by aligning both recreational and medical cannabis. For the many medical patients across the country and people such as our Canadian veterans, this is like rubbing salt into a wound.

 

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The federal proposition for the excise tax revenues was put to premiers as such, each gram of pot would accrue a tax of $1 on sales (up to $10); a 10% tax on sales of more than $10.   On Friday the federal government also announced that the excise tax revenues would be split half and half between the provinces/territories and the federal government. This news caused an uproar across the country as the provinces piped up and voiced their concerns and objections to this plan. The provinces are calling for a higher portion of the tax revenues and their reasoning is quite simple – – the majority of work and heavy lifting around legalization is in the hands of the provinces/territories, and therefore, the majority of the tax revenues should also fall into the hands of the provinces.

Please let us know what you think about Canada’s proposed excise tax on cannabis by commenting and sharing this article. We all need to ensure our voices are heard, especially when there are so many medical patients who could be facing higher costs for their medicine.

The public has until Dec 7, 2017, to submit feedback on the proposal. Written email submissions should be sent to: fin.cannabis-taxation-cannabis.fin@canada.ca

Read the full proposed excise duty framework for cannabis products here: http://www.fin.gc.ca/n17/data/17-114_1-eng.asp

November 12, 2017

by Parker Wallace

Profile photo of Parker Wallace
Parker is a cannabis enthusiast to the core who shares a keen interest in listening to what others have to say and understanding what’s important to them. Those who know Parker know that his passion for health and wellness runs deep, and his love of Canada even deeper!

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