Ontario not banking on weed cash bonanza

Cash-strapped Ontario government not expecting financial windfall from looming legalization of marijuana, says Finance Minister Charles Sousa

Thestar.com
June 22, 2016
By Robert Benzie

The cash-strapped Ontario government is not banking on a financial windfall from the looming legalization of recreational marijuana, says Finance Minister Charles Sousa.

With officials at Queen’s Park preparing for Prime Minister Justin Trudeau’s federal legislation next year, Sousa emphasized that no cannabis tax bonanza is anticipated.

“I have not taken into consideration any of the possible receipts into our budget plans,” the finance minister, who hopes to eliminate a $4.3-billion deficit next year, said Tuesday.

Asked if marijuana will be a cash cow for the treasury, Sousa was firm: “Not at all.”

“That’s not something that I have been speculating on,” he said.

“Even when it comes to the revenue, it’s not the overriding factor because I’m sure there’s going to be a lot of costs involved in terms of making sure that we administer it properly.”

According to Sousa’s February budget, the Ontario government expects to take in $1.2 billion in tobacco taxes this year, plus $611 million in beer and wine taxes, and an additional $2 billion from the LCBO.

But provincial officials have not yet calculated how much revenue legalized recreational marijuana would bring into their coffers.

Some economists have estimated it could be similar to the amount gleaned through tobacco taxes while others predict it will be far lower.

Health Minister Eric Hoskins is concerned about the toll of increased marijuana smoking.

“There are legitimate health concerns of consuming - particularly smoking - marijuana,” said Hoskins, a physician and public health expert.

“It’s important that the public be aware of that and that we strike the right balance with regards to the legalization, but in a . . . regulatory environment . . . which protects the most vulnerable,” he said.

Hoskins emphasized that it’s important to “socialize Ontarians about the potential harmful effects” of smoking recreational weed.

“From a health perspective as we go forward our contributions to the discussions focus on harm reduction and the potential negative impact of marijuana - I’m not talking about medicinal marijuana here, which is a legal substance.”

Premier Kathleen Wynne has said she would like the government-owned Liquor Control Board of Ontario to oversee the sale of recreational weed.

But government officials say that does not mean the LCBO’s 650 stores across Ontario would be stocking Super Lemon Haze cannabis next to bottles of Limoncello liqueur.

They note that the Crown agency is also a wholesaler whose mission includes controlling access to booze to limit underage Ontarians from drinking.

As provincial bureaucrats from several ministries begin work on a weed strategy, they are wrestling with what kind of a retail model is looming.

Wynne and Sousa have expressed their opposition to the illegal “dispensaries” that have sprung up in Toronto in recent weeks.

Hoskins said the storefront weed shops present a difficult problem.

“It’s challenging because we’re in that interesting time between the (federal) government indicating its intent and actually creating a legislative framework,” the health minister said.

“So there are proponents of making marijuana more readily available that are . . . anticipating these certain changes yet we are in a legislative environment that still prohibits it,” he said.

“We’ve seen at the municipal level the challenges - not just in Toronto or Vancouver - that the municipalities have faced in this interesting time.”