Pubdate: Wed, 04 Oct 2017
Source: Prince George Citizen (CN BC)
Copyright: 2017 Prince George Citizen
Author: Joan Bryden
Page: 5


OTTAWA - 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 a federal proposal put to premiers during a first ministers
meeting Tuesday, 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.

However, premiers argued that provinces will foot the lion's share of
the cost of regulating and enforcing the new regime and should,
therefore, get the lion's share of the revenue.

Trudeau said the level of taxation on marijuana and revenue sharing
are still matters under negotiation with the provinces. He
acknowledged that there will be "significant new costs" associated
with legalizing pot and said he's open to provincial arguments that
they'll bear the brunt of them.

Still, he emphasized that the goal of legalization is not to make

"Our goal from the very beginning on the legalization and regulation
of marijuana was not to make profits, to bring in tax revenue,"
Trudeau told a wrap-up news conference following a day-long meeting
with provincial and territorial leaders.

Rather, he said, "all first ministers are fully aligned" on the goal
of keeping marijuana out of the hands of kids and out of the control
of criminal gangs.

Ontario Premier Kathleen Wynne said it's not simply a matter of
sharing any federal tax revenue with provinces. She noted that a
number of municipalities have told her they will face some new costs
as well.

Any taxes imposed on marijuana will have to be sufficiently low to
keep the price low enough to force the black market out of business,
said Nova Scotia Premier Stephen McNeil.

Consequently, he said: "I don't think we should run out and start
spending tax dollars based on cannabis."

No one should think legalization means governments will "hit the
mother lode," agreed Quebec Premier Philippe Couillard.

He argued that pricing of marijuana will be a balancing act: if it's
priced too low it will encourage use; if it's priced too high, it will
keep the black market thriving.

Manitoba Premier Brian Pallister, who wants the federal government to
give the provinces another year to introduce regulatory and
enforcement regimes, said discussion of revenue sharing is premature.

"It reminds me a little bit of the two salesman who were having a
vicious argument about a commission split on a deal that they hadn't
done yet," he said.

"We don't really know what the ramifications are of this. This is a
historic change... We're talking about splitting revenue at this point
we don't know what the net may be. We may be splitting a cost, not a
net proceed. We don't know."

Legalization of marijuana was one of two issues that was top of mind
for premiers as they arrived for the day-long summit with Trudeau. The
other was the federal government's proposed changes to small business
tax measures.

Federal Finance Minister Bill Morneau briefed the premiers on his
proposed changes, which he maintains are aimed at ensuring the
wealthiest Canadians can't use incorporation of small businesses to
avoid paying their fair share of taxes.

The proposals include prohibiting income sprinkling to family members
who do no work for the business, limiting the ability to make passive
investments in things unrelated to the business and restricting the
ability to convert income to capital gains, which is taxed at a lower
rate. The proposals have been slammed by large and small business
groups, doctors, accountants, lawyers, farmers, shop owners and even
some of Trudeau's Liberal backbenchers.

A number of premiers have expressed concern that they could prevent
farmers from passing on their family farms to their children and that
they could cause doctors, particularly in rural areas, to pack up and

McNeil said he was somewhat reassured by Morneau's presentation.

"I was certainly pleased to hear the finance minister say today that
his tax policy would not impact family businesses, farms being
transferred from one generation to the next, he wanted to ensure that
women were being successful as entrepreneurs with... the capacity to
save for maternity leave and that all Canadians need the flexibility
when it comes to retirement," he said.

Consultations on the proposed change ended Monday. Trudeau emphasized
that the government has heard the concerns of small business people
and the premiers and that they'll be taken into account in the final

Trudeau and the premiers sat down for about 90 minutes Tuesday morning
with Indigenous leaders. While they were generally pleased to have an
opportunity to air their particular concerns, the Indigenous leaders
said they'll continue to push for full inclusion in first ministers'
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MAP posted-by: Matt