B.C. municipalities want province to share cannabis tax money from Feds

VANCOUVER -- A group advocating on behalf of municipalities and some First Nations across B.C. wants the province to share its cannabis excise tax revenue.

The Union of B.C. Municipalities' outgoing president Maja Tait said Friday that 99 per cent of the group's 189 members voted in favour of seeking a portion of the revenue this week at a convention.

The excise cannabis tax is paid by licensed cannabis producers when their products are delivered to a retailer or customer and the federal government retains 25 per cent of the money up to $100 million a year.

The remaining 75 per cent is given to provinces and territories, which have the option to pass it along to municipalities.

According to the union, B.C. is expected to receive $50 million in revenue from the excise tax in the fiscal 2020-2021 year.

“There's been two years now with the legal (cannabis) framework that is providing millions of dollars in taxation revenue to the province and the federal government and we're not receiving any of that, despite assuming costs, responsibilities and so forth,” said Tait, who is also the mayor of Sooke, a district on the southern tip of Vancouver Island.

When recreational cannabis was illegal, Tait said municipalities were often shouldering the costs of drug programs and education for young people and dealing with the regulation of the underground market.

When it became legal in Oct. 2018, municipalities across Canada had to undertake extra bylaw and policing responsibilities, deal with regulating new retailers and begin enforcing rules around where you can use or buy cannabis.

The union argues that the province should share the money because it will also earn $40.9 million in revenue from a 15-per-cent provincial mark-up on the landed cost of cannabis.

The union also said that the amount of non-medical cannabis sold in the province rose “significantly” in 2020, averaging $22.03 million in monthly sales for the first four months of the year. That compared to $8.10 million per month in 2019.

“If cannabis-related costs remain consistent year over year, then provincial projections suggest that starting in 2020-21, the provincial government's cannabis-related tax revenue will begin to exceed these costs by a large margin,” the union pointed out in its plea.

A spokesperson for the B.C. finance ministry said the province's recent election call meant she could not comment on the union's vote - its fifth in recent years that sought provincial money from cannabis-related activity.

“As the province is currently in an election period, all government of B.C. communications are limited to health and public safety information, as well as statutory requirements,” Sonia Lowe wrote in an email to The Canadian Press.

Union members are growing frustrated with the lack of help for such costs, especially since Alberta, Ontario and Quebec have started passing along a portion of the excise cannabis tax to their municipalities, said Tait.

According to the union, the Ontario government will allocate $40 million of its projected $100 million cannabis excise tax revenue to local governments as part of a two-year agreement.

Any revenue exceeding $100 million over the two-year period will be shared 50-50 with municipalities, the province said.

This report by The Canadian Press was first published September 25, 2020.