Legal Marijuana May Carry Tax of at Least $1 Per Gram

Article by Mia Rabson, The Canadian Press via CTV News

Legal marijuana may carry tax of at least $1 per gram

Ottawa and the provinces and territories could have another $1 billion a year in tax revenues to split after pot becomes legal next year.

Liberal MP Bill Blair, former Toronto police chief and the Trudeau government’s point man on legalizing marijuana, made public Friday the federal tax proposal for legal pot, kicking off a period of public consultations that ends Dec. 7.

That, Blair said, gives the government just enough time to solicit comments on the proposal so that federal, provincial and territorial finance ministers can discuss it when they meet in Ottawa Dec. 10-11.

The plan would add an excise tax of $1 per gram of marijuana or 10 per cent of the final retail price, whichever is higher, with the revenues to be divided equally between Ottawa and the provinces and territories.

Federal and provincial sales taxes would be applied on top of the excise tax, with the final price tag varying across the country because provinces have different sales taxes.

On an $8 gram of pot sold in Ontario, for instance, the final purchase price would be $10.17, with a $1 excise tax and $1.17 HST. In New Brunswick, it would be $10.35.

Alberta, which has no provincial sales tax, could see the cheapest pot in the country at just $9.45 for an $8 gram of weed.

“I’m very comfortable that the level of taxation that has been determined as appropriate in this case achieves our goals of keeping the price sufficiently low to be competitive with an illicit market, while at the same time not creating an incentive for the consumption and purchase of this drug,” said Blair.

Blair gave $1 billion a year as a very rough estimate of how much governments stand to raise from the plan, although that number is at the high end of the scale, he warned, since so much depends on just how many people will end up buying marijuana once it becomes legal.

Read full article here.

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