Pubdate: Thu, 27 Aug 2015
Source: Prince George Citizen (CN BC)
Copyright: 2015 Prince George Citizen
Contact:  http://www.princegeorgecitizen.com/
Details: http://www.mapinc.org/media/350
Author: Barbara Yaffe
Page: 6

VANCOUVER IN A STICKY ICKY SITUATION

To tax or not to tax - that is the unanswered question now that 
Vancouver City Council has decided to regulate its marijuana 
dispensaries. Various levels of government are finding themselves in 
an awkward situation as they determine whether to impose taxation on 
the businesses - and thereby confer further legitimacy on a 
commercial activity related to cannabis.

According to Canada's Controlled Drugs and Substances Act, cannabis 
possession remains a federal offence unless it is for medicinal use 
and the user has a doctor's prescription.

Vancouver's decision with respect to regulation deals only with the 
city government's own powers, including authority to collect business 
licence fees of $30,000 per dispensary. But where tax policy is 
concerned, the municipal move leaves only giant question marks.

The province has been cautious in its posture, with Health Minister 
Terry Lake last spring approving the city's action: "They are just 
operating in the interests of their citizens and at least putting 
some regulatory framework in their city and, as our public health 
officers have said, they are doing it for the right reasons."

Federal Health Minister Rona Ambrose, meanwhile, is in a fury, 
insisting cannabis outlets are criminal establishments and urging 
police to enforce the law by shutting them down.

Her position makes it pretty difficult for Ottawa to turn around and 
tax the dispensaries. Taxation surely would amount to tacit 
acceptance of commercial trade in an illegal substance.

Government authorities obviously do not collect taxes on the trade in 
stolen goods, under-the-table transactions, or prostitution. So, how 
likely is it they would now seek to tax cannabis sales?

When I put the question recently to the folks at the federal finance 
ministry, I was referred to the health ministry. Michael Bolkenius, a 
spokesman for Ambrose, issued the following statement: "Storefronts 
selling marijuana are illegal and, under our government, will remain 
illegal. We expect the police to enforce the law."

Of course, with a federal election taking place Oct. 19, Bolkenius 
added, the Conservative government's posture was "unlike (that of) 
Justin Trudeau who wants to make smoking marijuana a normal, everyday 
activity for Canadians."

The province is being equally obfuscatory. Finance spokesman Jamie 
Edwardson said: "Businesses that sell items that are subject to PST 
would need to collect and remit PST, unless specific exemptions 
apply. If the business has taxable income, they would be subject to 
corporate income tax."

So, have the pot dispensaries been remitting PST and corporate tax to 
the B.C. government?

Edwardson responded that confidentiality requirements regarding who 
in B.C. has paid their taxes precludes him from saying.

Dana Larsen, director of the Medical Cannabis Dispensary in Vancouver 
and founder and director of Sensible B.C. which lobbies for pot 
legalization, reports: "Some of the dispensaries do charge and remit 
GST, while others do not.

"Some may charge PST too, though I don't think most do that."

Larsen also noted, "every dispensary operator I am familiar with 
files all required business taxes, as far as I know."

Larsen believes taxation oversight will eventually come, now that 
municipal bylaws to regulate the dispensaries have been put in place.

One of the principal arguments for legalizing marijuana - apart from 
the fact prohibition has not been effective - is that, if people are 
going to use it, society can at least benefit from applicable taxes 
that stand to flow from the cultivation and sale of pot.

In Colorado, where the substance has been made legal (as in 
Washington state, Oregon and Alaska), the state last year collected 
$44 million in taxes from its cannabis enterprise.

In Vancouver, we appear to have developed a system to date that 
features only the downsides of permitting pot use.

We have a bunch of odiferous cannabis dispensaries that now are 
allowed to operate in our midst, without any clear rules about the 
safety of the stuff being sold, or a framework to ensure that buyers 
and sellers pay their fair share of taxes.
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MAP posted-by: Jay Bergstrom