Canada is sweetening the deal for its provincial governments to help usher in the first national legalization of recreational marijuana use by a major economic trading partner. With so many US firms supporting offices in both the United States and Canada, the move will challenge risk and drug use policies. Read more about the Canada plan in this Bloomberg.com article.
Canadian Finance Minister Bill Morneau agreed to share a greater portion of tax proceeds from sales of legalized marijuana with provincial governments, saying it will help them deal with added costs as the market starts up next year.
Morneau and his fellow finance ministers announced a framework agreement at the conclusion of a meeting in Ottawa, signaling they expect to reap an estimated C$400 million ($311 million) in annual excise taxes from marijuana sales, implying an estimated legal market of about C$4 billion. Sales taxes would also be collected.
The 10 provinces will now receive 75 percent of excise tax revenue for the first two years, with the federal government taking the remaining 25 percent, Morneau said. The federal share would be capped at C$100 million annually, with anything beyond that going to provinces. Morneau said the price for legal product will be standardized nationally at about C$10 ($7.80) a gram — including all taxes and production costs.
Provincial leaders resisted Prime Minister Justin Trudeau’s proposal last month for an equal split of pot tax revenue, arguing they would face a greater share of the start up costs such as policing impaired drivers. Several ministers warned those costs will eat into revenue, as Canada prepares to be the first major economy to fully legalize recreational marijuana.
Read the full article at: www.bloomberg.com