Trudeau unveils proposed excise tax on marijuana

Provinces and feds would split new tax revenue from recreational marijuana

Prime Minister Justin Trudeau speaks to reporters following a first ministers conference in Ottawa

Prime Minister Justin Trudeau unveiled plans on October 3 for an excise tax on recreational marijuana once its sale becomes legal on July 1, 2018.

“The proposal we put forward is $1 excise tax per gram, up to prices of $10, and 10% on prices over $10 per gram,” he said following a first ministers conference in Ottawa.

“The proposal is to divide the revenue 50-50 between the federal government and the provincial government. The provinces argued that they are going to be bearing more costs, certainly upfront, in terms of installing the regime, and I certainly said we’re open to looking at that and discussing and making sure that we are doing this right.”

It is unclear whether Trudeau and the premiers also intend to levy provincial sales taxes, the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) in those provinces where there is a HST.

Trudeau stressed that his focus in legalizing recreational marijuana is not for increased tax revenue.

“Nobody’s mindset on this approach is bringing in tax revenue on this,” he said. “The mindset that we’ve approached the legalization and control of marijuana from the very beginning has been from a public health and safety standpoint.”

B.C. Premier John Horgan told reporters in a scrum that he remains optimistic that the July 1, 2018, deadline can be met for legalizing recreational marijuana.

“As a relatively new premier, I’m of the view that we can get things done in an accelerated way,” he said. “I think reality might smack me in the face in the months ahead, but today I believe that the deadlines are achievable.”

He did not clarify what distribution channels B.C. will allow or what the minimum age will be to buy marijuana.

When asked about age and distribution, he quipped, “I’m 58, and I’ve distributed my weight relatively evenly from head to toe. I haven’t smoked pot today, no.”