Medical Cannabis Benefits Savings: A Note on the Government's Estimate

Prior to Budget 2025, the Cannabis for Medical Purposes (CMP) program compensated eligible Veterans Affairs Canada (VAC) clients for an amount up to $8.50 per gram of medical cannabis.[^1] Budget 2025 lowered the maximum reimbursement rate to $6 per gram effective April 1, 2026, reducing Government expenditures by an estimated $4.4B over the 4-year period spanning 2026-27 to 2029-30. Savings are presented in Table 1, with $4.2 billion attributable to Canadian Armed Forces (CAF) veterans (the “VAC component”) and $0.2 billion to RCMP members.

The remainder of this note focuses on the VAC component, as the underlying explanation of the accounting calculation is identical for the RCMP portion.

Cannabis for Medical Purposes Background

Starting with one veteran in 2007, VAC has reimbursed eligible CAF veterans and RCMP members for the use of medical cannabis as treatment for pain and compensation due to their service or employment.[^2] A formal policy was introduced in 2016 and revised in 2019 following the 2018 Cannabis Act and Regulations. The policy compensates eligible veterans for a maximum of 3 grams of medical cannabis as dried cannabis or its equivalents per day.[^3] Clients requiring more could request to raise their daily limit with supporting medical documentation.

Table 2 presents CMP usage and reimbursement amounts published by VAC, accompanied by calculations of usage and reimbursement ratios by PBO. The data shows rapid growth in both clients served and usage per client served, which has led to total program expenditures expected to more than double between 2021-22 and 2025-26. Modeling done by VAC and the Office of the Chief Actuary (OCA) forecasts more clients to be served in the future as medical cannabis usage rates increase, which would further increase total program expenditures.