Alberta to fight federal government’s cannabis-tax ‘clawback’

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Alberta will introduce legislation as soon as next week to allow the establishment of private cannabis stores , and will also launch a battle with Ottawa over how to split the tax revenue from the drug sales.

Late Friday, Alberta Finance Minister Joe Ceci held a news conference to slam the federal government's proposal that Ottawa get 50 per cent of the excise tax on marijuana products. The provinces and territories would receive the other half.

Ottawa's claim to a large share of the $1 a gram, or 10 per cent of the producer's sale price, is not fair, Mr. Ceci contends. The provinces and municipalities, not Ottawa, will be responsible for related costs, such as policing, education and other implementation work.

"That level of clawback from the federal government is unacceptable," he told reporters in Calgary .

Mr. Ceci said he does not quibble with the 10 per cent tax, but says 100 per cent of the revenue – or close to it – should go to the provinces, which will have to do the heavy lifting as recreational cannabis is legalized.

"I'll be sending a letter immediately on behalf of all the provinces back to the federal government saying that's unacceptable, and we need to get in a room together to work this out."

Ottawa says it will consult with the provinces and territories on the proposed new taxation regime on cannabis. But as Canada moves toward the legalization of recreational marijuana by July 1, provinces are dealing with a host of issues.

Alberta said Friday that legislation on the distribution and sales model for recreational cannabis is likely to come next week.

On Tuesday, the government will introduce amendments to the Traffic Safety Act to prepare for the legalization of cannabis, legislation likely to include administrative penalties for drug-impaired driving.

The Edmonton Journal has reported that Alberta will adopt a private model of storefront sales for marijuana after the NDP government rejected the idea of government-run cannabis storefronts. However, the report said online sales will be controlled by the government.

The decision on a hybrid system might be an attempt at the middle ground for the Alberta government. Last month, it said it was giving equal consideration to either a private model or a government model for storefront sales. Alberta Justice Minister Kathleen Ganley said the private sales model is similar to the province's long-time system for storefront alcohol sales, which is already familiar to Albertans.

The Alberta Union of Provincial Employees, the province's largest union and a key part of the NDP government's base, adopted a resolution in late October in support of the public operation and ownership of cannabis retail outlets. At the time, AUPE president Guy Smith said the resolution was not about creating more public sector jobs, it was about having "educated professionals" overseeing cannabis and keeping it out of the hands of youth or black market players.

In its draft plan laid out in October, Alberta proposed allowing public consumption in many areas, as long as they are where smoking is currently allowed, and are far away from schools, playgrounds and other sites frequented by children. It also suggests the minimum age for consumption be set at 18 – the same as the legal drinking age in Alberta.

Alberta has stood out – along with provinces such as Ontario and Manitoba – for the relative speed at which it has made decisions about the detailed aspects of the legalization, including retail sales and road safety.

This week, Manitoba said cannabis will be sold through private-sector retail outlets and online stores at prices retailers will be able to set themselves. The government will maintain a wholesale monopoly and regulate distribution. Municipalities will be able to ban marijuana stores, and cannabis will not be sold in the same premises as alcohol.

New Brunswick has also given some details of its plan, saying smoking marijuana in public will be banned, and that cannabis users will have to store their supply in a locked container in their home. The province has also said the licences of drivers suspected of being impaired could be suspended on the spot.