44th Parl. 1st Sess.
March 6, 2023 11:00AM
- Mar/6/23 7:03:42 p.m.
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Mr. Speaker, I want to tell a short story about the government's regulatory failure, which has cost constituents in my riding hundreds of well-paying jobs in the last month or so.
Until February 9 of this year, Canopy Growth, a licensed cannabis producer, was the largest private sector employer in my constituency. Based at the former Hershey chocolate factory in Smiths Falls, it has been transformed into a high-tech, legal, cannabis-producing facility. At the height of their operations, they employed about 1,800 people in Smiths Falls. However, last month Canopy announced the elimination of 350 jobs, 190 of which were to be cut immediately, and the rest to follow in the coming months. That was at the tail end of series of prior cuts.
Canopy will soon employ fewer than one-third the number of my constituents it once did. These job losses, to a large extent, can be laid at the foot of the government's failed policies. In 2018, the government, with great fanfare, legalized the sale and use of recreational cannabis. I voted for that.
We are just five years on, and the government's delivery on its plan, its crushing federal taxes and its insanely high regulatory compliance costs have allowed the illegal market to continue to flourish, and it is directly causing hundreds of Canadians to lose their jobs in my constituency alone. A month ago, the day after the job cuts in my riding were announced, I raised this point and the Parliamentary Secretary to the Minister of Innovation, Science and Industry stood to say that his government continues “to engage with stakeholders” and that they have recently funded a “strategy table” to “support dialogue”.
That is nice, I guess, but the government would have been better advised to have acted sooner, years sooner, on the advice it was getting from industry and stakeholders. The next best thing would have been to say it would act immediately. Saying that we will have more talks when the House is not nearly on fire but just about burned down is too late.
A multi-party group of parliamentarians with three Liberals, of which I am a member, has written numerous times to the Minister of Health. We wrote, as an example, about attempts to rationalize various regulations dealing with cannabis infusion beverages. It has inexplicably taken years for movement to occur on that one small issue. There are other issues by far that are much more important and there has been no movement on them. This long struggle for incremental microscopic improvements illustrates the problem the government has. On a macro level, it has failed to deliver on its promise of listening and creating a business-friendly environment for the cannabis industry.
I have mentioned the parliamentary secretary's response to my question from last month, and I am sure that tonight he will repeat at length the same kind of response. He will say that he regrets the job losses. He will say some industries face challenges, and that they want to listen to industry and stakeholders. I am sure he will be saying it honestly, but I truly hope that the government's speaker this evening will acknowledge that their ministers have been receiving advice from industry and stakeholders for years now. They could have acted upon it with far greater speed. If they had done so these jobs would still be in existence.
While there is still some hope that some jobs can be saved, and we will not lose the entire industry, perhaps the government could agree to move quickly on the recommendations that have been made by the legal cannabis industry, which would allow it to prosper and ensure that our industry does not remain 50% in the illegal sector, as it now is.
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- Mar/6/23 7:07:31 p.m.
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Mr. Speaker, I am happy to respond to the comments made by the member for Lanark—Frontenac—Kingston. He and I had occasion to work together on the Standing Committee on Procedure and House Affairs in the 42nd Parliament. I think we did good work there and I always appreciate his interventions.
In 2018, through the Cannabis Act, Canada made history and became the first major industrialized country to provide legal and regulated access to cannabis for non-medical purposes.
That act had three primary aims. The first was to prevent young people from accessing cannabis. The second was to protect public health and public safety by establishing product safety and product quality requirements and the third was to keep revenues from cannabis businesses out of the hands of criminals.
Since this bold and historic decision, the legal cannabis industry in Canada has grown rapidly and there is much to applaud. With over 900 licenced cultivators and processors of cannabis under the Cannabis Act and thousands of cannabis retail stores, the regulated cannabis industry is present coast to coast and has welcomed a tremendous number of new businesses.
In fact, the sector generates over $4.5 billion in sales and employs thousands of people.
The legal sector is successfully advancing the objectives of the Cannabis Act. The regulated market, based on the Statistics Canada household expenditure survey, is estimated to now represent approximately 70% of the total Canadian cannabis market. While views on that number may differ, it is clear that the illicit market share is diminishing.
Canadians are not only benefiting from having access to safe cannabis products but also benefiting from new business opportunities across the value chain, from cultivation to processing to research and testing and retail. Small and medium-sized enterprises continue to represent a greater and greater share of licence-holders and the market has continued to grow.
However, as we know well, this expansion is not without challenges. The sector is facing instability and uncertainty as it continues to mature. Our government recognizes how important the competitive and sustainable legal cannabis industry is to fully realizing the objectives of the Cannabis Act.
This is why, in budget 2022, our government announced a new cannabis strategy table, which the member has identified, that will support ongoing dialogue with businesses and stakeholders in the cannabis sector. It is an opportunity to identify ways to work together and to grow the legal cannabis sector in Canada. This commitment recognizes the economic and business realities that the sector is facing.
This initiative is led by the Department of Innovation, Science and Economic Development, which is actively engaging the cannabis industry and working with federal partners to ensure that the government is aware of and understands the issues at hand.
Further, in September 2022, the hon. Minister of Health and the hon. Minister of Mental Health and Addictions and Associate Minister of Health announced the launch of the legislative review of the Cannabis Act.
Early assessment of the act was always envisioned. This review will ensure that the flexible legislative framework set out in the act adapts and responds to ongoing and emerging needs and to make certain that the act best protects the health and safety of Canadians and provides for the establishment of a diverse and competitive legal industry.
Our government's commitment to Canadians and to achieving the objectives of the act, as set out in the act, are clear.
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- Mar/6/23 7:11:09 p.m.
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Mr. Speaker, the fundamental problem is this: if the cost to produce and sell legal product is higher than the cost to produce and sell illegal product, then the illegal product will have the ability to drive out the legal product. This is exactly what is happening in the market today in Canada. There is some high-end product, which, I grant, the legal sector predominates in, but the fact is that, right now, it is a lot worse than a 70-30 split.
I have heard 60-40 and in some parts of the cannabis production industry, I would say it is 50-50 or worse.
One cannot impose massive regulatory compliance costs on the legal sector, which do not exist for the illegal sector, without having the effect of driving these producers out of business.
If there was some way of making the illegal producers stop, we would not have a problem, but that was never possible.
I ask again: what is the government doing to ensure that regulatory compliance costs are brought down and taxes are kept reasonable for legal producers?
Remember, illegal producers do not pay tax—
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- Mar/6/23 7:12:19 p.m.
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Mr. Speaker, we have delivered on our promise to Canadians to establish a safe and legal cannabis sector in Canada. Our government remains committed to advancing the objectives set out within the Cannabis Act, including through the planned and launched legislative review of the act and the development of the budget 2022 announcement to establish the cannabis strategy, where the challenges that the member has identified will be aired and acted upon.
This table will provide new opportunities for government and industry to discuss the challenges and opportunities facing this relatively new sector as it continues to establish itself and find its footing as a sustainable alternative to the illicit market.
Our government has been and remains steadfast in its commitment to engage and work with industry while doing so and I extend that same offer to the member.
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