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Concerns that cannabis tax sharing may have strings
As cannabis legalization approaches, the question of cannabis tax sharing is being asked more often.
The federal government announced Dec. 11 (2017) an agreement that will see provinces and territories get 75 cents on every dollar collected in excise tax levied on cannabis up to 2020. A previous proposal was for a 50-50 split between the feds and provinces but the provinces chafed at that.
For much the same reason as the provinces, which noted they would be dealing with legalization from the ground up, local governments are now stating they should be in on the new tax pie.
In a Dec. 13 letter to B.C. municipalities, the City of West Kelowna suggests municipalities should receive 50% of the province’s share.
“With cannabis sales becoming legal in 2018, there must be a formal agreement that will divide the tax revenue on cannabis sales in a fair and equitable manner. Current discussions regarding revenue sharing involve the federal and provincial governments with no inclusion of local governments. Ultimately, the legalization will entail additional costs for local governments both in social and policing costs,” stated West Kelowna Mayor Doug Findlater on behalf of his council.
“A Federation of Canadian Municipalities (FCM) paper is stating that the impact may affect policing, fire services, building codes, city planning and standards, public health, social services, communications, law etc.
“City of West Kelowna Mayor and council is requesting your support, by writing to the province to lobby them to agree to 50% of the provincial share of the cannabis tax sharing formula be provided to local governments. This is an adequate and equitable share to help support costs and services incurred by local governments,” the letter concluded.
The Regional District of East Kootenay (RDEK) board of directors Jan. 5 briefly discussed the West Kelowna letter.
Board chair, Electoral Area C Director Rob Gay said, “We don’t see additional costs to the RDEK” but municipal governments might.
Electoral Area F Director Wendy Booth is front and centre in provincial discussions surrounding cannabis legalization, as she is also president of the Union of B.C. Municipalities (UBCM).
She told board members there is a concern that provincial cannabis tax share funds will come with strings attached. “Somewhat like accepting a download,” she said.
The UBCM is looking at hard costs and trying to find a number “that will be palatable to most,” Booth said.
“Ten dollars might buy you a million dollars worth of headaches,” Gay cautioned.
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