PM proposes federal excise tax on legal pot, sharing revenue with provinces

OTTAWA (NEWS 1130) – Prime Minister Justin Trudeau is proposing to levy a federal excise tax on recreational marijuana once it becomes legal next July, with the provinces and territories receiving half the revenue.

Under the federal proposal put to premiers during a first ministers meeting today, each gram of pot would be subject to an excise tax of $1 on sales up to $10 and a 10 per cent tax on sales of more than $10.

The Premiers were apparently caught off guard by the proposed taxing model.

“For the first time that I’m aware of, the federal government is looking at revenue-sharing model. That’s not something we’d contemplated before, so there was a good deal of discussions aruond that,” BC Premier John Horgan said.

Horgan says there needs to be more discussion about this, pointing out the provinces will be the ones footing most of the bill when it comes to distribution and policing legal weed. Some premiers are arguing that means the provinces should get the lion’s share of the revenue.

It also raises the question of whether the price of pot will be low enough to compete with the black market.

Trudeau says the costs of legalization, the level of taxation on marijuana and revenue sharing are all still matters under negotiation with the provinces.

He emphasizes that the goal of legalization is not to make money.

He says all first ministers agree that the priority is to keep marijuana out of the hands of kids and out of the control of criminal gangs.

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