Pubdate: Fri, 29 Jan 2016
Source: Edmonton Sun (CN AB)
Copyright: 2016 Canoe Limited Partnership.
Contact: http://www.edmontonsun.com/letter-to-editor
Website: http://www.edmontonsun.com
Details: http://www.mapinc.org/media/135
Author: Bruce Cheadle
Page: 32

ROLLING IN DOUGH

$5b in Taxes on Weed: Report

OTTAWA - Call it Prime Minister Justin Trudeau's secret stash.

A new report from CIBC World Markets says Canada's federal and 
provincial governments could reap as much as $5 billion annually in 
tax revenues from the sale of legal marijuana.

CIBC economist Avery Shenfeld crunched the numbers using current 
estimates of Canadian recreational pot consumption, the revenue 
experience in U.S. states that have legalized, and other factors -- 
such as prevailing "sin tax" rates on alcohol and tobacco.

"The bottom line is that federal (and) provincial governments might 
reap as much as $5 billion from legalization, but only if all the 
underground sales are effectively curtailed," writes Shenfeld.

"That's on the order of 0.25 per cent of GDP, no barnburner."

The Liberal government has promised to legalize, tax and regulate 
marijuana and has made MP Bill Blair, the former Toronto police 
chief, the lead on investigating a new regulatory model.

Trudeau maintains that legalized pot will not be a cash cow, and that 
all revenues will be used to address mental health and addictions issues.

"It was never about a money-maker, it was always about public health, 
public safety," the prime minister said in December during a year-end 
interview.

The experience of Colorado and Washington states, where pot sales 
were legalized and taxed, suggests no dramatic increase in marijuana 
usage but a potential for pot tourism.

"The desirability of increased marijuana tourism inflows will be 
questioned, no doubt, but they would generate additional fiscal 
revenues for government on their other tourist spending," Shenfeld writes.

The report uses Colorado sales figures to estimate a Canadian pot 
market worth about $10 billion annually, then looks at net profit 
margins from Ontario's government booze monopoly and other associated 
income and payroll taxes to come up with the revenue total.

Shenfeld also suggests that the oft-touted law enforcement savings 
from pot legalization may not materialize due to ongoing 
international obligations to stop marijuana exports and the 
enforcement needed to curb the untaxed black market.

"Deficits won't simply go up in smoke as a result," he concludes.
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MAP posted-by: Jay Bergstrom