The federal government has agreed to give the provinces and territories a 75 per-cent share of the tax revenues from the sale of legalized marijuana.
Finance Minister Bill Morneau announced the agreement Monday, after a day-long meeting with his provincial and territorial counterparts.
The original agreement put forward by the federal government proposed an even 50-50 split, a plan that was immediately shot down by the provinces, many of which wondered aloud what sort of costs Ottawa would be incurring to deserve such a share.
After a meeting with his Atlantic counterparts in Halifax, Nova Scotia Premier Stephen McNeil let slip that a two-year deal had been reached.
Saskatchewan’s Finance Minister, Donna Harpauer said the possibility to take more than 75 per-cent also exists thanks to a cap put in place.
“This is a pretty good compromise because it also has a cap of $100-million, for the federal government portion, so should the revenues be more than $400-million, then the provincial portion will actually be more than the 75 per-cent.
Ottawa’s initial estimates suggest the total pot of tax revenue from marijuana sales could reach $1 billion per year.
However Harpauer says they can’t rely on estimates with no bench-work to compare to.
“We at this point in time have no clue, the federal government floated around the idea that it would be around $400-million for each of the first two years, and this is a two year agreement. We think that could be a little underestimated, but we really have nothing to bench-mark it against to know for sure.
Cannabis is still expected to become legal nationwide on Canada Day 2018.