Health Canada collected over $60 million in cannabis-related fees in the 2022-23 fiscal year according to a new report.
Operating Costs Double Revenue
Health Canada brought in $60,196,034 in revenue but its operating costs were more than double that at $123,864,676. The department strives to recover 100% of costs for these services but it says since the fees were last set increases to costs have been incurred.
Cannabis fees are charged for various transactional activities including application screening, security clearances, and import and export permits. In addition, an Annual Regulatory Fee is charged, which is meant to cover costs associated with a range of regulatory activities, like regulatory inspections, compliance and enforcement, program management, and oversight.
Fees were introduced in 2018 and last amended in 2020.
Fee Adjustments in 2024
Application fees will all be increasing on April 1, 2024. Highlights are provided below but a full list of fees can be found in the Health Canada report.
In 2022-23, the License Application Screening Fee brought in $410,180 in revenue. It will be increasing from $1765-$3527 to $1969-$3933 in 2024.
The Application for a Security Clearance brought in $2,945,335 in revenue. It will be increasing from $1781 to $1987 in 2024.
The Application for Import or Expert Permit brought in $946,464 in revenue. It will be increasing from $658 to $734 next year.
Finally, the Annual License Fees for various license types brought in $55,894,055 in revenue. Fees in 2024 are based on the Cannabis Fees Order.
Calls to Eliminate Excessive Regulatory Fees
Earlier this year, the Cannabis Council of Canada called on government to make the changes needed to save the struggling cannabis sector. One of these recommendations was to eliminate excessive regulatory fees and specifically the Annual Regulatory Fee.
In a position paper the advocacy group says, “Beyond the cannabis excise duty that generates close to $1.5 billion per year for governments, the regulated cannabis industry pays $75 million annually in Health Canada Regulatory fees that is effectively a 2.3% tax on most recreational cannabis sales. Tobacco and alcohol, which are also subject to excise duties, do not pay an annual regulatory fee to the federal government although one was promised for tobacco. The cost of regulating the cannabis industry should come from increased tax revenues and for fees charged for actual services. Eliminating Health Canada’s Annual Regulatory Fee will provide cannabis companies with immediate capacity to protect jobs and invest in the development of innovative products that can attract illicit consumers.”
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