Finance Committee on May 9th, 2018

[Allan Rewak]

Absolutely, and I'd like to provide some clarification, respectfully, to that investment and those shady investors that are referred to.

The money that was often quoted in le Journal de Montréal was related to offshore trusts. These are created for a variety of reasons, generally legal, but that is not what I'm here to talk about and defend. Really, the cannabis industry goes through the most vigorous licensing and dual regulation process of any industry in Canada.

First of all, all of our members have to go through the full ACMPR licensing process. They are investigated. Their family members and anyone associated or with a controlling interest in said company is investigated deeply. They have to first pass that security check by the RCMP.

They go through a dual regulation through the OSC or whatever stock regulator they operate under. Unfortunately—and I think this is an important point that has to be made—we can't be asked to prove that we're above board by breaking the law, and most stock market regulators will require that we do not disclose the names of individual investors in companies. Those are passive investments as well, and they denote no control over the companies themselves. I believe we are adequately protecting Canadians. We have the most vigorous system in the world, and I stand by it.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

You seem satisfied with it.

I'd now like to discuss another topic: double taxation. I believe it was the representative of Canadians for Fair Access to Medical Marijuana who commented on this, and I am sure the beer producers agree. In the case of beer, the excise tax makes up 47% of the price. And then the sales taxes are added to that.

Do you think that this double taxation is a barrier to accessing medical marijuana?

[Jonathan Zaid]

Yes, absolutely. Today, already 60% of medical cannabis patients can't afford their medicine because it's not covered by insurers, but it's also because of a very unfair GST/HST that no other medications that must have authorization by a doctor are subject to.

That said, this new excise tax will be applied at the point of production, so the HST will be compounded. It will be double or compounded taxation of a medicine. I think that's the really key thing. Patients, people who are suffering from extremely difficult situations, a lot of the people whom we represent, are on disability. They have no income and they're already suffering. Going forward and taxing them more is going to make that suffering worse.

[The Chair, Liberal, Wayne Easter]

Ms. MacEachern wants in.

[Annie MacEachern]

May I?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Ms. MacEachern, I think you also said that the higher the price, the greater the danger that patients will turn to the black market. Is that correct?

[Annie MacEachern]

Yes, of course.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Will the taxes that will be added to the excise tax exacerbate the problem?

[Annie MacEachern]

As CFAMM mentioned, many of the patients whom I've spoken to directly are underdosing. They're not even meeting their required or their prescribed dosage from their doctors. I don't think you would find anyone underdosing with pharmaceuticals to afford the medication.

I know that many people who experience acute pain, pain that comes in bursts, will choose not to medicate or will medicate with lower dosages in order to make their prescriptions last.

I know for a fact that the cost of my medication will increase approximately $200. That's depending on when I purchase oil or when I purchase dry herb. The CBD versus THC exemption will not help me whatsoever. From my licensed producer, there is not one product that would be exempt from the CBD not being charged.

I wholeheartedly feel that this excise tax will be sending medical patients to the black market.

[The Chair, Liberal, Wayne Easter]

I have two comments. Could I ask, over what period of time is that $200, and is it just the excise tax that you're thinking of?

[Annie MacEachern]

One month, and yes, it is just the excise tax.

[The Chair, Liberal, Wayne Easter]

Are there any other questions, or does anybody have anything to add? We're down to the last few minutes.

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I'd like to go back to the matter of insurance and the DIN.

According to your experience and your expertise, for a product to be eligible for reimbursement, must it absolutely be considered to be a medication? I think you mentioned some countries, Belgium and Germany, where insurance covers the purchase of medical cannabis.

In Germany, has any medical-use cannabis been approved as a medication by the central health organization?

[Jonathan Zaid]

From my understanding, in Germany it's not an authorized medication through their normal pathways. Medical cannabis is available through pharmacies on the basis of a doctor's prescription, and it is mandated to be covered for those who are on disability or welfare programs, so they do go a step further.

That said, a number of Canadian insurers have moved forward to cover medical cannabis, but it represents around 3% or 4% of the market who have any coverage, and 50% of those 3% or 4% have coverage beyond 50% of their dosage. We're really talking about a tiny fraction of the market with any coverage. Mainly this is attributed to what's known as “health spending accounts” in benefit plans that allow for medical cannabis to be claimed, but are typically capped at about $500 to $2,000 a year. That doesn't even come close to the full dose that someone with a chronic condition would need.

Insurers can cover the cost. There are a number of reasons why they don't, but given that reality, I think it's even more prudent for the government to look at this issue. This is a simple and rational decision that the government can make, to treat medical cannabis like every other medication. Especially in light of the lack of insurance coverage, this makes so much sense.

[The Chair, Liberal, Wayne Easter]

But it is true that, if you're looking at equivalency with the pharmaceutical industry in terms of the DIN, there are a lot of other factors in the research and development, etc., so it's not just as simple as it looks.

What is the percentage of medical marijuana used that would have a DIN number now? Is it very low?

[Jonathan Zaid]

It is an extremely low percentage. The 269,000 Canadians who are using cannabis for medical purposes are doing so on the authorization of their health care providers, but that's not prescription of medical cannabis. There are very few products on the market that are considered prescription cannabis products, and those are only indicated for very narrow conditions.

With that said, let me just remind this committee that the courts have been very clear. In the absence of a DIN, the Government of Canada still has to provide reasonable access to cannabis for medical purposes, and we believe this is a reasonable approach to treating cannabis like a medicine—and that extends to taxation.

[The Chair, Liberal, Wayne Easter]

Okay.

A final question, and a short one, to Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Well, hopefully, it will be short, Mr. Chair.

The legislation that we're speaking about here indicates that products derived from cannabis that are approved by Health Canada and have drug identification numbers and can only be acquired with a prescription will be exempt from the excise duty for product offerings.

What limits does this place on products that are available that require medical marijuana? As well, you mentioned the 0.3% THC. I'm assuming this wouldn't be of much assistance to those suffering from chronic pain or illness. Is that the case?

[Annie MacEachern]

That is very correct.

I'd like to quickly mention something that I found extremely enlightening. When I held an event for this Don't Tax Medicine campaign to inform patients on Prince Edward Island that this would impact them, a doctor, Dr. Sana-Ara Ahmed, teleconferenced us to tell us that the endo-cannabinoid system has been removed from their curriculum at medical school. They don't learn abut the endo-cannabinoid system in medical school. They learn about the nervous system; they learn about all of the other systems in our body, but this system exists. It's there. It's been there since humans have existed.

The fact that cannabis-derived products are not being recognized simply because they don't have a DIN leads me to believe that it's because cannabis has been very demonized for so long. I don't think we will get a DIN, but we need to trust that this medication is helping thousands of Canadians.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Zaid.

[Jonathan Zaid]

Absolutely. We agree. The absence of a DIN is not a legitimate reason to tax patients. We're not just talking about the HST or GST, which is applied to other products like natural health products that don't have a DIN. There are some arguments—not that we would agree with them—that could be made in that regard, but with that said, it's very clear that when it comes to the excise tax or a sin tax, it should not be applied to medicine. This has nothing to do with a DIN.

The government is making a good move to exempt these medicines from a DIN, which is only logical. That same logic should apply to the medical cannabis products patients are accessing through the ACMPR. That's where the majority of patients are. That would make a difference in the lives of Canadians.

[The Chair, Liberal, Wayne Easter]

With that, you've had the last word.

Thank you, all. We covered quite a number of topics, from financial matters to cannabis.

For those who had to come to Ottawa for a second time due to the cancellation of last week's meeting, our apologies.

This meeting is adjourned.