• Niche Canada

Budget 2018 Recap

The federal government tabled Budget 2018 this week, and as expected, it contained more details about the government’s plan for legalization, as well as new money for education and research. The plan, however is getting mixed reviews. So, let’s break down the highs and the lows of the fiscal plan.

Cannabis Public Education

Public education is the foundation for the successful implementation of a legalized cannabis regime. And the budget delivered on a few areas in this regard.

Starting this year, the government will invest $62.5 million over five years for public education initiatives to support the involvement of community-based organizations and Indigenous organizations that are educating their communities on the risks associated with cannabis use.

In addition, the government also announced $10 million over five years for the Mental Health Commission of Canada to help assess the impact of cannabis use on the mental health of Canadians, and $10 million over five years to the Canadian Centre on Substance Use and Addiction to support research on cannabis use.

Excise Duty

Taxes are not usually a fan favourite when it comes to government policy, but the cannabis excise duty has been criticized by many who argue that medicine should not be taxed. They are urging the government to treat medical cannabis the same as other prescribed medicines, which are exempt from all taxes.

And, while Budget 2018 attempted to address the issue, it fell far short of what patients have been asking for.

The government will exempt from excise duties low-THC products, including low-THC cannabidiol oils and prescription pharmaceutical products that are derived from cannabis. It will also examine options to provide retroactive reimbursement for duties imposed on equivalent products prior to them being given a Drug Identification Number.

Revenue Sharing

How to divvy up the cannabis tax revenue has been a contentious issue for the lower levels of government. Municipalities are on the front lines of legalization and maintain they should get a bigger share of the money to pay for extra policing and enforcement costs.

And, it seems their push has paid off. The budget reconfirmed the federal government’s commitment to share the tax revenue on a 75/25 basis, with 75 per cent of duties going to provincial and territorial governments and the remaining 25 per cent to the federal coffers.

For the next two years, any federal revenue in excess of $100 million will be provided to provinces and territories. As part of this arrangement, the government expects that a substantial portion of the revenues from this tax room will be transferred to municipalities and local communities.

What’s Next?

Creating a legalized cannabis regime is complex and there are many varying opinions about how to get it right. One of the federal government’s main objectives is to keep profits away from criminals and protect health and safety. However, in order to do that, they need to keep costs low or else the black market will continue to thrive.

And while our policy-makers are trying to figure out the taxation balancing act, let’s hope governments and communities across the country begin to truly believe that, for many Canadians, legalization needs to be about better access to safe, affordable medicine. When that shift occurs, so will the political will to create policies to protect the rights of patients and fund new research into the health benefits of cannabis.