A Corporate Research Associates (CRA) survey this week probably sent chills down the spines of finance ministers and premiers in Atlantic Canada.
After they left Ottawa earlier in the week with a lucrative tax-sharing deal on the sale of legalized marijuana, their visions of windfall revenues were quickly dashed with a reality check.
The CRA survey suggests that 20 per cent of Atlantic Canadians plan to buy pot once it becomes legal July 1. It’s about the same percentage that uses pot today — illegally.
So, it looks like everybody won’t be getting stoned. Most people who shun pot today will still avoid it next July. The obvious difference is that the 20 per cent of the population who use pot will be able to buy it at government-approved outlets, and the revenue will benefit the public purse instead of drug dealers.
Ottawa suggests there’s unlimited potential for pot to generate more revenue, but the feds shouldn’t get their hopes too high.
For the first time, a slim majority of Atlantic residents (53 per cent) support legalization of marijuana for personal use, but only 15 per cent of Prince Edward Islanders indicated they plan to use marijuana when it becomes legal. The numbers are only slightly higher elsewhere in the region, with Nova Scotia at 19 per cent, New Brunswick at 20 and Newfoundland and Labrador at 23. Granted, the survey was asking people about their pot use when marijuana was still illegal.
The federal government was off base with its initial offer of a 50-50 split of excise taxes with the provinces. Ottawa passed legislation to legalize pot and then unfairly dumped the costs of enforcement, distribution, education and treatment onto the provinces. The two-year deal gives provinces and territories a 75 per cent share of tax revenues, with a portion going to cities and towns to help them pay for enforcement. That’s much more reasonable.
Ottawa suggests there’s unlimited potential for pot to generate more revenue, but the feds shouldn’t get their hopes too high. Based on the CRA survey, Canadians might support legalization but a large majority won’t be smoking up.
Governments like to preach that legalization is not about revenues but about protecting kids. And sure, the real benefits are control, product safety and getting rid of criminal element. In order to eliminate the illicit pot market, the ministers agreed to keep the per-gram price at roughly $10 or lower — cheap by most standards.
Another survey released this week also suggests future tax revenue for pot is exaggerated. An Ontario study indicates that in the last 20 years, the proportion of students who reported drinking alcohol dropped to 43 per cent from 66, while smoking rates plummeted to seven per cent from 28, and marijuana use dropped to 19 per cent from 28.
Young people are better educated, more concerned with their health and more aware that alcohol and smoking — cigarettes or spliffs — are simply not healthy.
Canada’s expected pot boom could go bust.