The Trudeau government is sticking with its deadline to legalize recreational marijuana by July 2018, despite provincial fears that there’s not enough time to address the legal, social and health challenges of ending Canada’s pot prohibition.
The federal Liberals delivered that message Monday after Manitoba’s finance minister said he felt rushed by the federal government’s tight timeline and asked for an extension.
In making his argument, Cameron Friesen said the provinces are bearing the bulk of the work involved, as well as the “very real” costs needed to create a regulated cannabis market.
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The federal government introduced legislation in April, with a goal of legalizing and regulating the use of recreational marijuana by July 2018.
With the countdown underway, Friesen insisted there were still many unanswered questions on issues like public safety, enforcement and finding legal supplies of marijuana.
“We have one year on the clock to put all this in place,” Friesen said before a meeting in Ottawa with his federal and provincial counterparts to discuss, among other issues, how best to tax Canada’s forthcoming legal pot industry.
“This is a very significant shift in how we’ll operate, and we need to have that adequate time to develop the tools that we will need as a province to be able to implement this the correct way.”
Friesen said he had already raised the idea of an extension with federal Finance Minister Bill Morneau and would push the issue again. Later in the day, Prime Minister Justin Trudeau himself essentially snuffed out the idea.
“We gave everybody lots of time,” Trudeau said in Ottawa. “We’ve been working for a long time with all the provinces, with the municipalities… It’s time for us to move forward on this.”
Morneau acknowledged after the meeting that several of the provinces said there’s still much work to be done.
For provinces that aren’t ready in time for the “fixed date,” Morneau said, the federal government will oversee a mail-order sales program. Consumers would be able to buy pot through a federally licensed producer and receive home delivery.
The legalization date, however, appears to be non-negotiable.
“We need to get a firm date out there,” he said. “We accept that there’s much work to be done, but we’ve started down that path… We believe that it’s entirely possible.”
Morneau said the ministers agreed to the principle that pot taxation should stay low to ensure the regulated market squeezes out the illegal activity.
The challenge will be identifying the sweet spot where pot prices are high enough to cover government costs, but cheap enough to beat out the black market.
Morneau added that they have yet to determine how tax revenues would be shared between provinces and the federal government.
Provincial ministers have said they intend to push the feds to ensure they receive a share of pot-related tax revenue that fairly reflects the added costs provinces will have to assume on the road to legalization.
After the meeting, Alberta Finance Minister Joe Ceci said his province would be “ready” by July 2018.
Prior to the meeting, Ontario Finance Minister Charles Sousa insisted he had yet to consider how much pot-related revenue his province could bring in because he’s been more concerned about ensuring legalization is handled properly.
“We’re going to be asking for fairness and flexibility, so that when there are some possible revenues that come from this that it’s properly shared,” Sousa said.
His Quebec counterpart, Carlos Leitao, said the provinces should receive most of the tax revenue from legalized pot because they will “have to shoulder most of the costs of putting in place regulations.”
The federal government has vowed to work with provinces on implementation and to commit more resources to needs such as public security, policing and educational campaigns. It has also argued that marijuana prohibition is very expensive and that legalization could significantly cut down on costs.
The federal government has not shared details about how much tax revenue could be generated by a recreational pot market, nor has it publicly discussed its potential benefits for the wider economy.
But they have repeatedly said the primary goal is to get pot out of the hands of young Canadians and to cut off the criminal trade.
In addition to cannabis, the finance ministers also focused on how to improve information sharing between jurisdictions as a way to address tax avoidance, tax evasion, money laundering and terrorist financing.
They also spent time discussing the Canada-U.S. trade relationship and their respective experiences interacting with American officials, particularly anything related to upcoming NAFTA negotiations.
Bank of Canada governor Stephen Poloz also delivered a presentation for finance ministers Monday on the state of the economy.
