Budget 2018: Medical cannabis advocates “outraged” by excise tax

Feds commit to reviewing the Drug Identification Number approval process, will consider rebate program

After campaigning the government to reconsider applying an excise tax to medical cannabis in Canada, advocates say they were "outraged" to discover it will be added to most medical and recreational cannabis products when cannabis is legalized later this year. Only non-THC and low-THC cannabis products will be exempt from the tax, according to the 2018 federal budget released Tuesday.

Recognizing the non-addictive, potentially therapeutic role of low-THC cannabidiol oils, which are sometimes used with children facing certain medical conditions, products that contain low amounts of THC will generally not be subject to the excise duty,” reads the budget. THC is tetrahydrocannabinol, and is what produces cannabis's "high," psychoactive effects. Cannabidiol – an anti-inflammatory compound that is increasing in popularity – is also commonly referred to as CBD.

Budget 2018 medical cannabis

There are more than 235,000 Canadians registered with Health Canada who have been prescribed medical cannabis by a doctor or nurse practitioner for a wide variety of ailments. Lift users report relying on products with THC to treat Crohn’s disease, sleep disorders, ADHD, endometriosis, among many other ailments.

“The cap on THC to determine tax application clearly shows the government’s lack of understanding of who medical patients are and what they’re really using medical cannabis for,” said Jonathan Zaid, executive director of Canadians for Access to Medical Marijuana (CFAMM). “Even paediatric patients use products that are above this cap.”

The excise duty was initially proposed by Finance Minister Bill Morneau to prevent recreational cannabis consumers from seeking prescriptions to access less expensive product. CFAMM launched a campaign in protest. Medicines are not generally taxed in Canada and patients pay between $7 to $13 per gram of medical cannabis flower.

This month, Sun Life became the first major private benefits company to extend coverage to plan holders under specific circumstances, but medical cannabis products do not yet have a Drug Identification Number (DIN) – the code assigned to a drug after it’s been reviewed approved by Health Canada.

Work will be undertaken by Health Canada to evaluate the drug review and approval process so that Canadians in need have better access to an array of medicinal options,” the budget reads. No timeline was included. Post-legalization, all prescribed medical cannabis with a DIN will be exempt from the excise tax.

Although the tax will remain until a DIN is assigned, the government said it will “examine options” for establishing a rebate program for patients to be reimbursed for the tax. 

“CFAMM will remain steadfast in our advocacy,” Zaid said. “We will continue to work with the government to see how their rebate program as well as the modernization of the drug licensing program will work. That said, we are very disappointed.”

In December, most provincial and territory governments agreed to a $1/gram tax, or 10 per cent of a product price, with 75 per cent going to the provinces. There will be a cap of $100 million for the federal government's proceeds, with the rest going back to the provinces and territories. The budget also includes $62.5 million over a five-year period for public education programs, which will begin in 2018, and proposed a $10 million fund over the same time period for the Mental Health Commission of Canada.

Photo: Magda Mitchell and her daughter, Kody Sulyok, protested the medical cannabis excise tax outside of Finance Minister Bill Morneau's Toronto office on January 26, 2018. 

In this article

Join the Conversation