How will cannabis products be taxed?

In December 2017, the federal, provincial and territorial governments agreed in principle to a tax regime that gives the provinces and territories 75 cents of every dollar collected in excise tax levied on cannabis for the first two years. The federal portion of tax revenues will be 25 cents of every dollar, subject to a cap of $100 million a year. Any revenue collected above and beyond the cap will be shared by the provinces and territories.

Finance ministers agreed in principle on a plan to keep the price low to suppress the illegal market and move to a legal, regulated environment, and further agreed that the combined rate of all federal, provincial and territorial cannabis-specific taxes should not exceed the higher of $1 per gram, or 10 per cent of a producer’s selling price.  

How much tax revenue does the GNWT think cannabis legalization will generate?

The GNWT has previously estimated that our share of the excise tax from legalized cannabis could be around $400,000 the first year. It is important to remember that no one knows for certain what consumption levels will be. There will obviously be more certainty on sales and government revenues once legalization takes place and the market for cannabis stabilizes.

What will the GNWT do with cannabis tax revenues?

Cannabis tax revenues will go into the General Revenue Fund for allocation to GNWT priorities, which will include expenditures for programs concerning cannabis.