Pubdate: Mon, 19 Jun 2017
Source: National Post (Canada)
Copyright: 2017 Canwest Publishing Inc.
Author: Andy Blatchford
Page: A4


'Co-ordinated approach' begins on revenue tools

OTTAWA * As the country's finance ministers meet in Ottawa, the
Trudeau government should expect to hear concerns about the added
burden marijuana legalization could heap onto provincial shoulders.

The agenda for the two-day, federal-provincial-territorial gathering,
which started Sunday, will include discussions on how best to apply
taxes on a regulated market for cannabis.

The federal government introduced legislation in April with a goal of
legalizing and regulating the use of recreational marijuana by July

Pot taxation is expected to stay low to ensure the regulated market
elbows out illegal dealers.

Details, however, on how the tax revenues will be shared between
provinces and Ottawa have yet to be determined.

The ministers are scheduled to start working on a "co-ordinated
approach to the taxation of cannabis," says a news release from the
office of federal Finance Minister Bill Morneau, who hosts the
twice-yearly meetings.

Taxation is poised to emerge as a key focal point of Canada's pot-
legalization process.

Since the federal legislation was tabled, several provinces have
voiced concerns about how much work will fall within their
jurisdictions - from addiction treatment, to distribution, to policing.

For example, Alberta Premier Rachel Notley has warned that provinces
will be left with a lot of the "heavy lifting" related to pot
legalization, including considerable costs.

In Quebec, Public Health Minister Lucie Charlebois has expressed
doubts the tax revenue generated by recreational pot will cover the
price tag of preparing for regulation, particularly when it comes to
health, security and education efforts.

Ontario Finance Minister Charles Sousa said in an interview he is not
apprehensive about cannabis legalization, he just wants to ensure the
transition into regulated markets doesn't impose any extra costs on

"There's going to be a lot of requirements on behalf of the
provinces," said Sousa.

"We want to make sure that the proper sharing is there and enough is
supported for the implementation of cannabis and the protection (of )
our society as we proceed."

Sousa said he will also be keen to hear how his counterparts are
approaching legalization.

Federal Health Minister Jane Philpott has promised to work with
provinces and to commit more resources to cannabis-related needs like
public security, policing and educational campaigns.

Philpott's office has also argued that the current system of
prohibition is very expensive and legalization could significantly
lower the provinces' existing costs.

The trick for Canada's lawmakers will be finding the pricing sweet
spot - high enough to cover costs, but cheap enough to squeeze out the
illegal market.

The federal government has repeatedly stated its primary goals with
legalization are to get weed out of the hands of young Canadians and
prevent criminals from profiting from the drug.

In addition to cannabis, the finance ministers will also discuss how
to improve information sharing between jurisdictions as a way to
address tax avoidance, tax evasion, money laundering and terrorist

They will also focus on the Canada- U. S. trade relationship.

For Quebec Finance Minister Carlos Leitao, the discussions on Canada-
U. S. trade, including renegotiation of the North American free trade
agreement, will be perhaps the most important issue on the agenda.

"I think the objective is to get to a consensus among the provinces
and the federal government as to what is it that we think that we
should be doing, both in terms of the taxation of cannabis and in
terms of our relationship with the United States," Leitao said in an

Bank of Canada governor Stephen Poloz will be on hand to deliver a
presentation on the state of the economy.

Sousa said he would also like to hear more about the state of the
federal government's infrastructure plan, including its proposed, $
35-billion infrastructure bank.

The bank is designed to use public funds as leverage to attract
billions more in private investment for large projects.
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