2021 Federal Budget Released: What This Means for the Cannabis Industry?

On Monday, the Canadian Federal Government released its 2021 Budget.

Here are some ways that it will impact the cannabis industry:

  • Cannabis exempt from excise duty on vaping products: A new excise duty framework on vaping products is proposed to be introduced as part of the existing Excise Act, 2001 (“the Act”), which currently applies excise duties on tobacco, wine, spirits, and cannabis products. The new duty would apply solely to vaping liquids that are produced in Canada or imported and that are intended for use in a vaping device in Canada. These liquids generally contain vegetable glycerin, as well as any combination of propylene glycol, flavouring, nicotine, or other ingredients, all of which must comply with Health Canada regulations. The new duty would apply to these vaping liquids whether or not they contain nicotine. Cannabis-based vaping products would be explicitly exempt from this framework, as they are already subject to cannabis excise duties under the Act.
  • Tax arrangements between the Crown and Indigenous governments: Budget 2021 announces the Government of Canada’s intention to engage with interested Indigenous governments and organizations on a framework for the negotiation of agreements that would enable interested Indigenous governments to implement a fuel, alcohol, tobacco, and cannabis sales tax within their reserves or settlement lands.
  • Helping Hard-hit Businesses Hire More Workers: Budget 2021 proposes to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or by hiring more staff.
  • Enhancing the Canada Small Business Financing Program: To make sure small business and independent entrepreneurs can access the capital they need to recover, innovate, and grow in the long-term, Budget 2021 proposes to improve the Canada Small Business Financing Program. These proposed amendments are projected to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses.
  • 15 dollar minimum wage for federally regulated sectors: The Government of Canada is announcing its intention to introduce legislation that will establish a federal minimum wage of $15 per hour, rising with inflation, with provisions to ensure that where provincial or territorial minimum wages are higher, that wage will prevail. This will directly benefit over 26,000 workers who currently make less than $15 per hour in the federally regulated private sector.
  • Internship, apprenticeship, and work opportunities: Budget 2021 proposes to provide $708 million over five years, starting in 2021 22, to create at least 85,000 work-integrated learning placements that provide on-the-job learning and provide businesses with support to develop talent and grow.

Key documents for reference:

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About the Cannabis Council of Canada

The Cannabis Council of Canada ('C3') is the national and international representative of Canada’s licensed producers and processors of cannabis. C3’s mission is to promote industry standards, support the development, growth, and integrity of the regulated cannabis industry, and serve as an important resource on issues related to responsible use of cannabis for medical and non-medical purposes.

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