If you buy cannabis (legally) in the NWT, here’s where the money goes

The Northwest Territories is projecting the legalization of cannabis will bring in “a couple of million dollars a year of revenue.”

That number is based on 25% of the population consuming a joint a day according to David Stewart, from the territory’s Department of Finance.

Cabin Radio looked into where that revenue will go.

First, it will be funnelled into something called the Liquor Revolving Fund, which works like a big cash float, running the buying and selling of liquor and cannabis in the territory.

When the float is full – and the department didn’t get back to us with how much money they aim to keep in the fund – the spillover cash is moved into a general fund the territory uses to subsidize programs in the NWT.

Targeted revenues

Some people, like Frame Lake MLA Kevin O’Reilly, have questioned whether revenues from cannabis could be targeted toward specific programs.

This already happens elsewhere. For example, the Western Canada Lottery Act states a Physical Activity, Sport and Recreation Fund will receive proceeds from lottery operations. Much of the territory’s sports funding is duly derived from lottery ticket sales.

“During the review of the [Cannabis Legalization and Regulation Implementation Act], we did raise questions about whether any of the revenues could be targeted to special purposes,” O’Reilly explained.

“Governments are very adverse to use of targeted revenues, it takes away from their discretion, and our cabinet is no different.

“Cabinet’s not going to budge on this. It’s not a non-starter as far as I’m concerned, but I think it is as far as cabinet is concerned.”

O’Reilly noted targeted funding has been announced in at least one province.

“New Brunswick has agreed to set aside, I think, two percent of the value of the [province’s cannabis supply] contract going into a special fund for public education [about cannabis]. It can be done,” he said.

Finance Minister Robert C McLeod acknowledged he had been asked a number of times in the past about targeted funding in relation to both liquor and cannabis sales.

The government’s answer, he explained, was and will remain that the money should be evenly distributed among the territory’s programs.

“If 65 percent of the budget of the NWT is in social programs, it’s only fitting that this money would be used to help with that 65 percent,” McLeod said.

How much money the government expects to trickle into social programs from the millions in cannabis revenue, once operational expenses are taken into account, is unclear.

‘A great idea’

Eli Purchase, who ran a petition this February urging the territory to open up lottery funding to the arts, believes targeted revenues would be “a great idea.”

“Obviously the number one thing that any income should go towards is cannabis education and healthcare. But if there’s money left over, sure,” said Purchase – although he has no plans to start another petition right now.

Purchase was only partly successful in his lobbying attempt this spring: the government didn’t go for his idea for lottery monies for arts, he says, “but they did increase some of the existing arts funding pots, like they put some extra money into the NWT Arts Council … so I call it a win.”