Federal Government Gives Health Canada Bulk of Marijuana Legalization Funding

According to the Department of Finance, which recently released a breakdown of how the federal government plans to spend its pot funds, Health Canada is set to receive the bulk of the more than half-a-billion dollars earmarked for the implementation of a recreational cannabis industry by the country’s July 2018 legalization deadline.

Just last week, Ottawa said in its fall economic statement that it would provide Health Canada, Public Safety Canada, the RCMP, and the Canada Border Services Agency with $526 million in new funding, which it plans to spread out over five years. It also plans to add another $20 million to this figure, which it will receive from internal or already existing sources.

The finance department said that of all this money, Health Canada would receive a whopping $432 million. In contrast, the Mounties will only get $68 million, the CBSA only $40 million, and Public Safety a measly $6 million. It said the funding is “to ensure there is appropriate capacity to license, inspect and enforce all aspects of the proposed Cannabis Act and to undertake robust public education and awareness activities.”

The Cannabis Act is the piece of legislation that will legalize recreational marijuana in Canada. Of it, the finance department said in its report, “The implementation of a cost recovery scheme under the proposed Cannabis Act will reduce the overall fiscal profile of this initiative.” In early October, there were some official discussions about taxing legal marijuana sales.

Prime Minister Justin Trudeau raised the possibility of tacking a 10 percent tax onto all marijuana sales. However, a spokesperson for Finance Canada wrote in an email that the federal government’s monies come “from a variety of taxes and other sources.” The initiative linked to the Cannabis Act, though, “is not linked to any specific source of revenue.”

In a statement made via email, Health Canada explained how it would use the funds, saying it would use them to draft “a new regulatory approach, including licensing and inspection, compliance and enforcement, monitoring and research, as well as a national public education and awareness campaign, tracking systems and program support.”

The state agency, which also has the job of overseeing all licensing for medical marijuana, indicated that these funds, at least some of them anyway, would originate from monies collected from both marijuana businesses and individual consumers. As a spokesperson said, “The government intends to offset the cost of implementing this new regulatory approach by collecting regulatory fees, as well as through revenues generated through taxation and cost recovery.”

The agency representative also added that, “Further information will be made available in due course.” Earlier this month, the Cannabis Act went back to the House of Commons for approval of several tweaks recommended by a parliamentary committee. Barring any changes or delays, the government still intends to meet its deadline and legalize recreational weed by its July 2018 target.

The Cannabis Act will also permit the government to establish fees for “approvals, authorizations, exemptions, or regulatory processes,” as well as fees tied to a marijuana tracking system, products and services. A spokesperson for Public Safety Canada mentioned an announcement of up to $274 million made in September, “to support law enforcement and border efforts to detect and deter drug-impaired driving and enforce the proposed cannabis legalization and regulation.”

On Tuesday, the federal government also made public that $36.4 million of the funding announced in the fiscal update would go toward creating and implementing a comprehensive “cannabis education and awareness campaign.” This is in addition to the $9.6 million allocated over five years in the government’s 2017 budget already, which funds an awareness campaign, public education, and “surveillance activities.”

In a public statement, Health Minister Ginette Petitpas Taylor said that, “These efforts also aim to equip parents and teachers with tools to have meaningful discussions with young Canadians about the risks of cannabis use.”

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