Alberta, Ontario and Quebec have committed to share legal cannabis revenues with local governments, and in their fourth year of asking, B.C. municipalities expect their province to do the same.
The Union of B.C. Municipalities is preparing for its 2020 conference, a virtual event to be broadcast from Victoria Sept. 22-24. Cannabis revenue sharing with local governments is among the executive’s top priorities for the annual get-together with B.C. cabinet ministers.
The resolution notes that Ottawa increased the share of federal excise tax on legal cannabis to the provinces to 75 per cent in recognition of costs to administer and enforce legalized recreational cannabis in 2017. That agreement covers the first $100 million of excise tax revenue, and it expires in December 2020.
The federal excise tax alone was projected to bring $6 million to B.C.’s treasury as of Finance Minister Carole James’ February 2020 budget. The actual revenue received for 2019-20 was $10.7 million, and that was before B.C. received its March payment.
“The B.C. government has disbursed none of the federal excise tax it received to B.C. local governments,” the UBCM executive states. “Notably, the Ontario government allocated $40 millionof its projected $100 million cannabis excise tax revenue to local governments as part of a two-year agreement, with any revenue exceeding $100 million … to be shared 50-50 with Ontario local governments.”
The federal government also collects GST on cannabis sales, while the province charges provincial sales tax and has a 15 per cent markup on its wholesale monopoly run by the Liquor Distribution Branch.
James has repeatedly told the UBCM delegates that B.C. hasn’t produced any net revenue to share, and continues to spend more on administration and enforcement than it brings in.
Other concerns to be aired at the UBCM convention include the additional costs to local governments from B.C.’s new emergency management legislation, including new mitigation and recovery duties after floods, fires and other natural disasters.
Another executive-endorsed resolution calls for changes to the local election law, to extend regulations on third-party advertising. It calls for the province to require all elector organizations to register, and report contributions to candidates outside election years.