Government of Canada Announces Consultation on Proposed Excise Duty Framework for Cannabis Products

The current approach to cannabis is not working, and the Government of Canada is committed to legalizing, regulating and restricting access to cannabis to keep it out of the hands of kids, and profits out of the hands of criminals.

In support of these goals and the broader legalization efforts, the Department of Finance Canada today published for consultation a proposed excise duty framework for cannabis products. The proposed level of taxation is intended to keep prices low to eliminate the black market, as discussed at the Finance Ministers Meeting last June. The proposed duty would apply to all cannabis products available for legal sale, including fresh and dried cannabis, cannabis oils, and seeds and seedlings for home cultivation.

The federal government believes that the combined rate of tax for cannabis flowering material contained in a final packaged product should not exceed $1.00 per gram, or 10 per cent of the producer's sale price of that product, whichever is higher, with this tax room divided equally between the province or territory and the federal government. Revenues raised from the taxation regime will help support investments in public education, enforcement, research and other activities integral to an effective system of legalization and regulation of cannabis.

In developing the proposed approach, the Government has paid careful attention to work done by the Task Force on Cannabis Legalization and Regulation and the Parliamentary Budget Officer, as well as the experience of international jurisdictions which have successfully implemented legal access to recreational cannabis on the part of adults.

Interested individuals or organizations are invited to review the consultation document, the draft legislative and regulatory proposals, and the related explanatory notes at the links below. Written comments should be forwarded by December 7, 2017 to fin.cannabis-taxation-cannabis.fin@canada.ca.

The federal framework is intended to be in place once legal cannabis for non-medical purposes becomes accessible for retail sale, no later than July 2018.