B.C. cannabis users could be paying a provincial tax as high as 10% on their purchases if the province’s municipalities get the tax deal they say is necessary to offset the effects of marijuana legalization.
“Legalization will cost money municipalities don’t have,” Federation of Canadian Municipalities president Clark Somerville told delegates at the Union of B.C. Municipalities (UBCM) conference in Whistler on September 11. “Make sure you are pushing for a fair local share.”
Cannabis will be legal in Canada October 17. New laws will allow people over 18 to possess up to 30 grams of legally produced cannabis, give adults the right to grow up to four plants per household, regulate production, sale and distribution and establish provisions for impaired driving.
B.C. has introduced the Cannabis Control and Licensing Act and the Cannabis Distribution Act and brought in changes to the Motor Vehicle Act to address legalization.
Worker safety is already covered under impairment provisions of the Workers Compensation Act.
At the local level, said Vancouver Coun. Kerry Jang, responsibilities will include policing and bylaw enforcement, licensing of retail operations, changes to land use management and zoning and enforcement of local regulations.
UBCM president Wendy Booth said the organization would debate a resolution September 13 to guide both short- and long-term cannabis revenue sharing with Victoria.
She said Victoria could rake in a projected $125 million from the cannabis excise tax in the first two years of legalization.
She said that number compares to $73 million in Quebec and $100 million in Ontario.
Jeremy Hainsworth / Business In Vancouver
The UBCM supports the idea that municipalities should share in that excise tax to help pay for the burdens legalization will place on local governments.
Under the UBCM’s proposed short-term strategy, the provincial government would provide municipalities with 40% or $50 million of the projected excise tax revenue of $125 million in the first two years of legalization.
Under the proposal, any revenue over that $125 million would be shared evenly.
“Excise tax revenue would be distributed to B.C. local governments on a per capita basis, with all municipalities and regional districts getting at least $10,000,” Booth said.
Under the resolution, the original framework would stay intact in the long term, barring any significant changes.
And the UBCM would like to see the original 7% tax boosted to 10%.