Mr. Speaker, on November 10, 2017, the Department of Finance Canada published for consultation a proposed excise duty framework for cannabis products. The proposed framework will support our twin goals of keeping cannabis out of the hands of youth, and profits from its sale out of the hands of criminals as we work to legalize and strictly regulate access to cannabis. The public consultation period closed on December 7, 2017.
Finance Canada is still assessing the potential size of the legal cannabis market, which will be a key factor in determining how much revenue will ultimately be collected under the proposed excise duty framework. In the short term, the size of the legal market will depend on a number of factors, including the supply of legal product, and the distribution and retail systems developed by provinces and territories, the details of which are still being assessed.
At the finance ministers’ meeting on December 11, 2017, ministers agreed that for an initial two-year period following the legalization of non-medical cannabis, taxation revenues will be shared on the basis of 75 per cent for provincial and territorial governments and 25 per cent for the federal government. Provinces and territories will work with municipalities according to shared responsibilities towards legalization. From 2018¬-19 to 2019-20, the federal portion of cannabis excise tax revenue will be capped at $100 million annually. Any federal revenue in excess of $100 million during this time will be provided to provinces and territories.
The department will report on its fiscal projections at a future date.