Health Canada Launches Public Consultations on Proposed Approach to Cost Recovery for the Regulation of Cannabis
July 12, 2018 Ottawa, ON Health Canada
The Cannabis Act has been passed by Parliament and will come into force on October 17, 2018.
Last year, the Government of Canada committed to providing the necessary resources to implement the Cannabis Act. At the same time, the Government committed to fully recovering the costs of regulating the new cannabis industry. Cost recovery will ensure that those who benefit from the new legal market will pay the costs of regulating cannabis, which will reduce the cost to Canadians.
Today, Health Canada is launching a 30-day public consultation on the proposed approach to cost recovery for the regulation of cannabis. The proposed cost-recovery approach is guided by the principles that fees should allow for both larger and smaller players in a diverse market. The approach proposes to collect no more than the cost of delivering the regulatory program.
The cost-recovery proposal includes four fees:
- A fee for screening licence applications;
- A fee for conducting security screening of key persons;
- A fee for reviewing applications to import or export cannabis for scientific or medical purposes; and
- An annual regulatory fee to cover other regulatory costs, including the detailed review of licence applications, the issuance of licences, inspections, and compliance and enforcement activities.
To promote a diverse market, Health Canada proposes to scale fees according to the size of the business and to provide for lower fees for the newly proposed micro-scale licence holders. Some classes of licences—namely those for research, analytical testing and hemp production—would be exempt from fees. To maintain access to cannabis for medical purposes, those who produce, cultivate and sell cannabis exclusively for medical purposes would be exempt from the annual regulatory fee.
The proposed approach to cost recovery is outlined in the consultation paper Proposed Approach to Cost Recovery for the Regulation of Cannabis.
All Canadians and interested stakeholders are invited to share their views on the proposed regulatory approach online until August 13, 2018. Health Canada welcomes written submissions or input provided online.
“Cost recovery is a standard practice across the Government of Canada to support program delivery. The proposed fees have been designed to enable a diverse and competitive legal industry made up of large and small players, to facilitate research and development, and to maintain access to cannabis for medical purposes. We look forward to hearing the views of Canadians on our proposed approach.”
The Honourable Ginette Petitpas Taylor
Minister of Health
“The previous approach to cannabis was not working. Our goal in legalizing and strictly regulating cannabis is to keep it out of the hands of youth and profits out of the pockets of criminals and organized crime. We also aim to minimize the cost to Canadians of regulating the cannabis industry. Implementing cost recovery will do just that. I encourage all interested Canadians to share their views with us.”
Parliamentary Secretary to the Minister of Justice and Attorney General of Canada and to the Minister of Health
In the Fall Economic Statement 2017, the Government announced $546 million over five years to ensure appropriate capacity to license, inspect and enforce all aspects of the Cannabis Act and to undertake robust public education and awareness activities.
Following the consultation, Health Canada intends to publish a summary of the comments received in a Regulatory Impact Analysis Statement. The Department will implement the new fees following the implementation of the regulations to support the Cannabis Act.
Based on estimates of market size and the number of licensed producers, the proposed fees would allow Health Canada to recover as much as 100% of annual regulatory costs as early as 2020‑21.
The proposed fees are designed to recover only the annual costs associated with regulating cannabis, including activities like licensing; compliance, enforcement and inspections; public education; and program management. The fee regime does not include law enforcement costs.
Office of Ginette Petitpas Taylor
Minister of Health
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