Canada govt proposes excise tax on all cannabis products

Last Updated: 2017-11-10

By Leah Schnurr

OTTAWA (Reuters) - Canada, which is on track to legalize recreational marijuana by mid-2018, on Friday proposed a cannabis excise tax of at least C$1 (79 cents) per gram (0.04 ounce), which will be split between the federal government and the provinces.

The federal government said the proposed duty, which would be no more than 10% of the sale price, would apply to all cannabis sold in Canada, including medical products that are already legal.

The proposal is similar to a plan that Prime Minister Justin Trudeau outlined last month.

Federal and provincial authorities want the total cost of a cannabis product to be low enough to discourage people from turning to the illegal market. However, some provinces, which will be in charge of the sale of marijuana, have expressed concern about how much implementation and enforcement will cost.

Member of Parliament Bill Blair, the government's point person on marijuana legalization, said the total tax revenue would depend on how big the market for consumption turns out to be.

Trudeau promised in his successful 2015 campaign for prime minister to legalize marijuana, saying the move would keep the drug out of the hands of underage users and reduce related crime.

Canada is set to legalize recreational marijuana by July, making it the first Group of Seven country to allow the drug nationwide. Some critics of the plan have said they think police and provinces need more time to prepare.