Economics of Cannabis in Canada
The economics of cannabis in Canada is highlighted in this article. Canada's cannabis industry generates $8.16 Billion for the country's economy.
According to StatsCan, the legal cannabis industry contributed about $3.96 billion to Canada's gross domestic product as of February. That is up 215% since recreational cannabis was legalized in Oct. 2018.
All provinces* and territories of Canada signed a CCTA, or Coordinated Cannabis Taxation Agreement, with the Canadian Federal Government.
*Except for Manitoba, who made a separate deal with the Government.
This Agreement states that the combined rate of all federal, provincial, and territorial cannabis-specific duties and taxes shall not exceed $1 per gram or 10% of the sale price of a producer.
The Agreement also states that profits from excise duties on cannabis goods will be allocated as follows:
- 75% to the provincial and territorial governments
- 25% to the Federal Government
Manitoba entered into the Federal Government's Coordinated Tax Arrangement with an agreement just between Canada and Manitoba.
In Manitoba, a wholesale mark-up on non-medical cannabis of $0.75 per gram was applied by the Manitoba Liquor and Lotteries (MBLL). The Manitoba government will also collect a Social Responsibility Fee (SRF) from a cannabis manufacturer on the annual sales of all provincially approved cannabis stores from the selling of non-medical cannabis.
The Sales Tax on Cannabis Products in Canada is as follows:
- Alberta: 5% GST
- British Columbia: 12% GST/PST
- Manitoba (recreational cannabis): 5% GST
- Manitoba (medical cannabis): 13% GST/PST
- New Brunswick: 15% HST
- Newfoundland & Labrador: 15% HST
- Northwest Territories: 5% GST
- Nova Scotia: 15% HST
- Nunavut: 5% GST
- Ontario: 13% HST
- Prince Edward Island: 15% HST
- Quebec: 14.975% GST/QST
- Saskatchewan: 11% GST/PST
- Yukon: 5% GST