Premiers have pushed back on a federal plan to levy an excise tax on cannabis and split the proceeds equally, saying provinces will have to bear much of the financial burden of legalizing the drug and thus should reap more of the financial windfall.

Prime Minister Justin Trudeau said Tuesday during the closing news conference of the first ministers meeting that Ottawa proposed an excise tax of $1 per gram of cannabis for pot sales up to $10, rising to 10 per cent of the total price for pot selling at a higher price point.

The proceeds would be split evenly, with 50 per cent kept in federal coffers and the other 50 per cent sent down the line to the provinces. Provinces would still be permitted to impose their own levels of taxation on the drug.

Manitoba Premier Brian Pallister said the "lion's share of the work will be borne by provinces," from policing, drafting regulations, changing driving laws, and funding municipal efforts to enforce new bylaws.

"I think it reminds me a little bit of the two salesmen who are having a vicious argument about the commission split on a deal they haven't done yet. We don't really know what the ramifications of this are — this is a historic change, we don't know the real cost," Pallister said.

Nova Scotia Premier Stephen McNeil and Ontario Premier Kathleen Wynne were quick to say the proposal was just a "first step," an initial offer from the federal government that they will take back for review.

Prime Minister Justin Trudeau and Manitoba Premier Brian Pallister share their views on how any tax revenue should be divided between Provinces and the Federal Government 1:11

Trudeau said tax revenues from pot are a secondary concern to shutting down the black market and bolstering public safety, but he is open to hearing provincial concerns.

Ottawa has previously pushed provinces to keep taxes low on the product in an effort to root out sales by organized crime. They are also asking provinces to develop a co-ordinated approach in an effort to ensure prices and policies are similar across the country.

The Parliamentary Budget Office estimated last year that tax revenues from cannabis would be in the hundreds of millions a year initially and could grow.

Manitoba Premier Brian Pallister, left, speaks with Nova Scotia Premier Stephen McNeil during the closing news conference at the first ministers meeting. Pallister said provinces will bear many of the costs of launching the cannabis legalization regime. (Adrian Wyld/Canadian Press)

Some of the provinces have also been expressing concerns about the tight timeline for legalization.

Pallister said there are still too many uncertainties about how that will work, and said he repeated his call for the Liberals to back off the July 1 deadline.

'Class warfare'

While Trudeau convened the first ministers meeting in Ottawa hoping to discuss Indigenous reconciliation and NAFTA, premiers forced cannabis and changes to the small business tax regime onto the agenda, two topics that dominated the day's discussion.

Early in the day, Pallister, a Progressive Conservative, accused Finance Minister Bill Morneau of fomenting "class warfare" with his tax proposals. He said the federal Liberals are unfairly targeting small business owners by tweaking rules around income sprinkling and curtailing passive investments — a tax-planning measure some use to shelter money earmarked for retirement.

"The federal government needs to pull back on its rather misguided proposition that we should have class warfare in our country between small family-run businesses and everyone else. That doesn't make any sense," Pallister said.

He said the federal Liberals have already "poisoned the water" by using words like "loopholes."

"That has just really created a backlash, and a sense of frustration, and disrespect has permeated the whole dialogue. I mean, these are 40-year-old tax rules; people who abided by them for that length of time shouldn't have their integrity impugned with the implication they're somehow cheaters or tax evaders. That's not right or fair," Pallister said.

Manitoba Premier Brian Pallister denounces the Liberal government's proposed business tax changes, calling them "rather misguided" that leads to "class warfare" in the country. 0:54