Pubdate: Mon, 11 Dec 2017
Source: Winnipeg Free Press (CN MB)
Copyright: 2017 Winnipeg Free Press
Author: Dylan Robertson
Page: A1


OTTAWA - Manitoba will push the federal government to transfer all of
the sin taxes collected from recreational marijuana into provincial
coffers, the Free Press has learned.

"This is a federal policy, with a federal timeline, with provincial
obligations and responsibilities," provincial Finance Minister Cameron
Friesen said.

On Sunday evening, federal Finance Minister Bill Morneau hosted his
colleagues from the provinces and territories for a working dinner
before a lengthy meeting today examining everything from pension
reform to equalization payments.

It's the looming July 2018 deadline

Ofor legalizing recreational marijuana - and an anticipated $1 billion
in nationwide tax revenue - that is gaining the most attention. In
November, Ottawa proposed an excise tax (more commonly known as a sin
tax) of 50 cents per gram for the federal government, plus up to 50
cents for provinces. That would be in addition to the 13 per cent
charged for GST and PST. For example, an $8 gram of cannabis would
cost between $9.54 and $10.04 in Manitoba after all taxes are factored

A month prior, at a closed-door meeting with premiers, Prime Minister
Justin Trudeau had hinted at splitting the excise tax between Ottawa
and the provinces.

That idea blindsided Manitoba Premier Brian Pallister. "I don't think
anyone thought they were serious about it," he said hours after the
Oct. 3 meeting.

On Sunday, Morneau said the federal Liberals had some flexibility on
how excise tax revenues would be split.

Speaking on behalf of the provinces, Ontario Finance Minister Charles
Sousa called the proposed equal split "a non-starter," but said most
provinces had not presented a specific offer.

Friesen said Manitoba wants 100 per cent of tax revenues going to
provincial coffers to account for roadside testing and
public-awareness campaigns.

"We hope there's a strong desire on all of our partners to stand
together (and) speak with one voice," he said.

"We have to stand together as provinces."

Morneau is pushing for a two-year agreement that could be revisited
after more data are collected, Friesen said. "There will be costs, and
no guarantees that revenues will cover them."

For ministers such as B.C.'s Carole James, it's unclear why Ottawa
should keep any revenue from marijuana sales.

"Before we even get to talking about sharing, we want to hear about
what responsibilities the federal government's taking on to justify
taking any of the percentage," James said. "Certainly, from our
perspective the formula put out by the federal government is a no-go.
That's very clear."

Sousa wants Morneau to explain how the Trudeau government plans to
earn its share.

"I want to know what the feds are going to put in - what they're going
to pay for," Sousa said.

"I want us to have unity around Canada on this issue and I definitely
want to see more because we're bearing more of the costs."

The added expenses likely to land with the provinces are expected to
include public-awareness campaigns, beefed-up policing, busier court
systems and increased road safety efforts.

Friesen said Colorado is still tabulating whether that state's January
2014 legalization has helped the economy. Data suggest a boost in both
tourism and motor-vehicle accidents, and researchers say they're not
sure how much either are linked to marijuana.

Friesen said Manitoba is reluctantly preparing for the July
legalization for cannabis. "We believe the whole process is rushed;
there is no backing down from the timeline."

Sousa said most provinces are committed to the Canada Day deadline.
"We have a tremendous amount of illicit activity already occurring,"
he said, adding that cannabis-industry players "are pushing the
envelope, anticipating legalization."

Morneau hinted that cities might get some cash from the sin tax. He
said he'd spoken with big-city mayors about marijuana taxes, including
on Saturday with Winnipeg Mayor Brian Bowman, who has fretted over an
uptick in costs.
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