No PST on pot, but a variety of other costs rolled in

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This article was published 14/08/2018 (2075 days ago), so information in it may no longer be current.

Manitoba won’t impose provincial sales tax on recreational marijuana purchases, a decision the government hopes will help thwart black market cannabis sales.

But once legalization kicks in Oct. 17, the provincial government will impose a variety of other costs on retailers, including a six per cent “social responsibility fee” and wholesale mark-ups, as announced in July.

“With non-medical cannabis, we thought it was important to have an exemption. Really what we’re trying to do is get rid of the black market, the illicit market that’s there,” said Finance Minister Scott Fielding.

The province announced its PST-exemption plan in budget legislation presented Wednesday.

After bickering with opposition parties about the timing of the technical budget bill’s release for weeks, the PCs produced the Budget Implementation and Tax Statutes Amendment Act on Wednesday. The timing of the bill was a compromise with the NDP since the government had intended to table the bill in the fall.

Manitoba’s four licensed cannabis retail companies will pay social responsibility fees on their total annual revenues starting in 2019.

Manitoba Liquor and Lotteries, the sole wholesale distributor of cannabis once legalization occurs, will add a nine per cent margin to the wholesale price of cannabis it sells to retailers.

Fielding said Manitoba is ready to sign on to a federal excise tax framework where it would receive 75 per cent of Ottawa’s planned cannabis tax, which would amount to $1 per gram or 10 per cent of the sales price (whichever is higher). The province is waiting on Ottawa’s go-ahead to sign such an agreement.

Meantime, NDP Leader Wab Kinew criticized the government for taking so long to introduce the legislation.

“There’s nothing that they brought forward in this bill today that they couldn’t have presented when we were sitting this spring. So why couldn’t they get it ready in time? To me, it’s a sign of incompetence,” Kinew said.

Kinew said he wasn’t opposed to the PST exemption for recreational cannabis, but he wanted to see more concrete plans, including how the province will share revenue with municipalities, nearly two months shy of legalization.

Manitoba Liberal Leader Dougald Lamont said the tax break for recreational cannabis is irrelevant. Sales of medical marijuana will still be subject to PST.

“They’re charging a whole bunch of other taxes on (cannabis), so I don’t see it as being particularly significant,” Lamont said.

The legislation includes amendments to the Chiropractic Act to allow chiropractors to register through a provincial corporation (as promised in the spring budget) and amending the Fuel Tax Act to exempt commercial cargo and passenger flights passing through Manitoba from carbon taxes – a move that’s in keeping with other provinces.

-With files from Solomon Israel

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