Cannabis funding delayed for municipalities

By Councillor Wayne Rothe

(Part 2 of 2; part 1 here

Despite having to do a great deal of work to prepare for the legalization of cannabis, Albertan municipalities will receive no revenue for up to two years.

Speaking in St. Albert, Premier Rachel Notley warned that municipalities won’t see any revenue from cannabis sales until the province turns a profit. This is despite the fact that municipalities are shouldering a great deal of the costs due to all of the work that’s required to prepare for legalization.

The government expects that this will take until 2020 or ’21, at which time it‘s expected to make $37 million from sales. Alberta anticipates legalization costs to be $90 million in the first two years.

Albertan municipalities in February asked for 70 per cent of provincial cannabis tax money and $30 million from the 2018-19 Alberta budget for one-time implementation costs, a request that Premier Notley called “amusing.”

Amusing, madam Premier? It could be argued that municipalities may have to shoulder the majority of the costs of legalization.

Notley argues that the biggest costs of legalization will be keeping the black market away, policing product safety and keeping cannabis out of the hands of children. She says the province wants to wait until it sees what the costs are before allocating any revenue to municipalities.

Even if Notley is correct I’d still argue that municipalities should receive some revenue up front in order to at least partly recoup their costs instead of the province recovering all of its implementation costs first.

Alberta’s municipalities expect to see increased costs due to increased demands on policing, ambulance service, amendments to municipal bylaws, policies, and administrative processes, bylaw enforcement, and social impacts. As with any significant policy shift, there are also likely to be unintended consequences that result in unexpected costs. Those costs are expected to total $26-$42 million a year for urban municipalities, according to the Alberta Urban Municipalities Association.

The federal government in 2017 announced that it would collect $1 per gram on cannabis and that 75 per cent of that revenue would be turned over to the province. The feds recently announced that it will collect a markup of an additional 10 per cent on behalf of the provinces in lieu of a provincial sales tax. This money will be distributed to the provinces after collection.

Cannabis legalization has now been delayed to August 2018.

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