Federal and provincial governments agree to 75/25 revenue split on cannabis revenue sharing

Carole James

AN agreement with the federal government that would see the majority of cannabis revenue flow to the Province was reached on Monday, Finance Minister Carole James announced.

“This agreement is a win for our province as we made a very clear case that British Columbians will bear the majority of costs when cannabis is legalized,” James said. “We negotiated an agreement for B.C. that means the majority of cannabis revenue will flow to the provinces so we can invest in programs to keep people safe and remove the criminal element from cannabis.”

The federal and provincial governments have agreed to a 75/25 revenue split, with the provinces receiving 75% of cannabis-specific tax revenue, and the federal government receiving 25%. The federal government has also agreed to a $100-million cap on its share of the tax revenue. Any revenue collected by the federal government above the $100-million cap would be returned to the provinces.

The proposed cannabis-specific tax will not exceed $1 per gram or 10% of the final producer’s selling price, whichever is higher. The tax will be applied upstream as an excise tax (an indirect tax on producers), similar to the federal excise taxes on other controlled substances, such as liquor and tobacco.

The Province will use this revenue to ensure cannabis regulation in British Columbia protects children and youth, prioritizes health and wellness, educates drivers, keeps the criminal element out of cannabis and ensures consumers get a safe product that they can trust.


Quick Facts:

* The federal government will establish a federal-provincial-territorial committee of finance officials to coordinate this cannabis taxation approach.
* The Province recently concluded a public consultation on cannabis legalization with input from 48,951 British Columbians, and 141 submissions from local and Indigenous governments, as well as a range of other interested stakeholders.
* The Province is working toward a regulatory framework in advance of the July 1, 2018, legislation date.