Finance Minister Carole James of the western province of B.C. has signed a marijuana tax-sharing deal late last week with the capital Ottawa, The Vancouver Sun reported on Wednesday.
However, B.C. has not yet decided how it will share the marijuana tax money with local communities in the province.
James signed the “coordinated cannabis taxation agreement” with the federal government formalizing Ottawa’s offer to share 75 percent of the revenue coming from marijuana sales with provinces and territories.
“I’m proud of the federal excise tax agreement for cannabis that British Columbia helped negotiate,” James said in a statement Tuesday.
Initially, the federal government had proposed a 50-50 split, but after pressure from the provinces, the percentage titled more in favor of the latter.
“The agreement ensures that 75 percent of the excise tax revenue will come to the province, and the federal government’s revenue is capped at $100 million. The revenues outlined in this agreement will help us manage our priorities for British Columbians.”
But more agreements need to be signed.
So far, Ottawa and the provinces have struck a cannabis taxation policy committee to review the rates and effectiveness of the deal before Jan. 1, 2020.
“Now, we’re waiting for the federal government to sign the agreement as well to make it final,” said James. “Of course, it won’t take effect until after Federal Bill C-45 is passed and comes into force.”
The agreed excise tax will be paid by manufacturers and is applied to flowers, seeds, seedlings and other cannabis products.
Provincial Sales Tax Not Decided
B.C. also has not decided whether it will charge the seven percent Provincial Sales Tax on marijuana sales. The province also has not decided how much, if any, of the federal-provincial revenue deal to share with local communities.
The deal signed only illuminates Ottawa’s tax relation with B.C. as a province.[share-btn]