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The country’s finance ministers are cautiously optimistic a deal can be reached today on how the federation will divvy up tax proceeds from the eventual sale of legalized marijuana.

Read: As marijuana rules become clearer, risks remain

Provincial and territorial finance ministers are meeting in Ottawa to discuss a range of issues—but the dominant topic has been negotiations toward an agreement on how they will share revenues from a federal excise tax on recreational cannabis.

Ontario Finance Minister Charles Sousa says the federal Liberal government showed flexibility on revenue and cost sharing issues at a working dinner last night.

Federal Finance Minister Bill Morneau says he’s prepared to be reasonable in trying to reach a compromise on how to share a source of tax revenue that Ottawa estimates could reach $1 billion per year.

The provincial and territorial governments insist they should get the bulk of the cash because they’ll shoulder most of the costs associated with legalization, such as policing, health issues and public awareness.

Morneau was expected to counter that argument last night by telling his counterparts Ottawa has already committed more than $1 billion over five years toward pot legalization.

Negotiations have been centred on the Trudeau government’s proposal to impose a cannabis excise tax of $1 per gram or 10% of the final retail price, whichever is higher.

An initial federal offer of a 50-50 split with the provinces was flatly rejected by the provinces and territories.

Also on the agenda

During the meetings, the ministers will also discuss the federal government’s proposed tweaks to the formula behind equalization payments, as well as the three-year review of the Canada Pension Plan. They will also explore the state of the global economy and listen to a presentation by Bank of Canada governor Stephen Poloz.

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Talks are also expected to resume on a national strategy to improve the sharing of information on corporate ownership between jurisdictions, a measure designed to clamp down on tax avoidance, tax evasion, money laundering and terrorist financing.

Also read:

CRA vows action on Canadian offshore tax evaders

Originally published on Advisor.ca
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