Manitoba won’t charge sales tax on recreational marijuana

Province wants legal pot to be competitively priced, despite markups already in place

Buried dozens of pages deep in the Progressive Conservative government’s Budget Implementation and Tax Statutes Amendment Act is a provincial sales tax exemption for recreational cannabis.

There will still be a series of fees and markups associated with the sale of legal marijuana, but an eight per cent sales tax isn’t one of them.

Manitoba Liquor and Lotteries will charge retailers 75 cents per gram plus nine per cent to the retailers for managing the distribution of marijuana from growers to sellers.

Retailers will also pay six per cent of their revenues as a social responsibility fee to the government .

Ottawa is also adding an excise tax to cannabis, split 75-25 between the provinces and the federal government. There has been agreement between the two levels of government on the share of the excise tax, but the paperwork hasn’t been signed yet.

Medical cannabis will remain subject to provincial sales tax for now.

Provincial officials briefed media Wednesday on the BITSA legislation and told reporters the PST exemption reflects the unknowns associated with the legalization of cannabis and how the price will fit into a landscape currently dominated by the black market.

“Right now, we want to get rid of the illicit market … that’s what the important piece is,” Families Minister Scott Fielding said Wednesday. “We think it’s important to essentially price out the black market’s that there.”

Liberal Leader Dougald Lamont dismissed that argument.

“It’s kind of irrelevant that the PST is not being applied to it, because there are so many taxes already being applied to those things,” he said.

The BITSA bill was a source of political intrigue in the spring when talks to end the spring session of the legislature broke down between the Opposition NDP and the government.

The PC government said at the time it was still working on the tax and fee structure for cannabis and wasn’t ready to publish the BITSA legislation.

On Wednesday, NDP Leader Wab Kinew decried what he called the government’s “lack of a plan for cannabis.” He said the Tories missed their chance to share their plans for a social responsibility fund and revenue sharing with municipalities, neither of which made their way into the BITSA bill.

“This government does not want to debate their ideas,” he said. “They went to great pains through the last sitting in the last session to prevent us from seeing this bill, even though it is proving to have been stuff that could have been introduced earlier.”