Le­gal pot will cost city $10M per year

Nen­shi wants share of fed­eral tax rev­enues


The le­gal­iza­tion of recre­ational mar­i­juana will cost the city of Cal­gary more than $10 mil­lion an­nu­ally in polic­ing, by­law and ad­min­is­tra­tion costs — a tab the mayor wants the fed­eral gov­ern­ment to ease by giv­ing mu­nic­i­pal­i­ties a one-third share of tax rev­enues from pot sales.

Coun­cil’s In­ter­gov­ern­men­tal Af­fairs Com­mit­tee heard Thurs­day that ad­min­is­tra­tion’s lat­est es­ti­mates peg the price of cannabis le­gal­iza­tion on city cof­fers at be­tween $9 mil­lion and $12 mil­lion ev­ery year — the equiv­a­lent of about a one per cent in­crease in prop­erty taxes an­nu­ally.

“This is a very big deal,” Mayor Na­heed Nen­shi told re­porters af­ter the com­mit­tee meet­ing. “We’ve not padded this num­ber, we’ve re­ally gone through and found where the costs are go­ing to be. Some of them are in polic­ing, some of them are in city op­er­a­tions like build­ing in­spec­tions, zon­ing and so on.”

The Trudeau gov­ern­ment is le­gal­iz­ing recre­ational cannabis in July and has pitched giv­ing provin­cial gov­ern­ments half of its es­ti­mated $1-bil­lion an­nual cannabis ex­cise tax take once weed be­comes le­gal.

But given the fi­nan­cial bur­den the new rules will put on mu­nic­i­pal­i­ties, Cal­gary’s mayor is adamant the city needs a share of the fed­eral gov­ern­ment’s tax rev­enues.

“We’re look­ing north of $10 mil­lion a year, so it’s in­cred­i­bly im­por­tant that any rev­enue that is gained from cannabis sales, the ex­cise tax on cannabis sales, be shared di­rectly with the mu­nic­i­pal­i­ties,” the mayor said. The Fed­er­a­tion of Cana­dian Mu­nic­i­pal­i­ties has pitched a rev­enue-shar­ing model that would al­lo­cate one-third of cannabis ex­cise tax rev­enues to mu­nic­i­pal­i­ties, with the re­main­ing two-thirds split be­tween the fed­eral and provin­cial gov­ern­ments — a model Nen­shi sup­ports. “That makes a lot of sense. That’s what we’re push­ing for,” Nen­shi said.

Fed­er­a­tion of Cana­dian Mu­nic­i­pal­i­ties Pres­i­dent Jenny Ger­basi said in a state­ment re­leased Wed­nes­day that lo­cal gov­ern­ments are on the front lines of im­ple­ment­ing the fed­eral leg­is­la­tion and the one-third split is “fair and achiev­able.”

“A smart rev­enue model will rec­og­nize that three or­ders of gov­ern­ment are in this to­gether,” Ger­basi said in the state­ment.

The mayor said in re­cent days the feds have shown they’re will­ing to be flex­i­ble on the rev­enue­shar­ing model and he’s hope­ful a so­lu­tion will be reached.

“Ide­ally, it would be a sit­u­a­tion where some of that fed­eral tax money flows di­rectly to the mu­nic­i­pal­ity and doesn’t have to stop off at the prov­ince on the way,” he said.

The coun­cil com­mit­tee also heard Thurs­day the city has so far re­ceived 11,800 re­sponses to its on­line sur­vey seek­ing in­put from Cal­gary res­i­dents on var­i­ous is­sues re­lated to the loom­ing le­gal­iza­tion.

While the city is wait­ing on the prov­ince for more de­tails sur­round­ing ar­eas of le­gal­iza­tion such as the li­cens­ing and zon­ing of mar­i­juana stores, the city ex­pects stores to open in less than seven months.

“We’re do­ing our best to en­sure busi­nesses would have the abil­ity to open their doors come July,” Matt Zabloski, the lead for the City of Cal­gary’s cannabis le­gal­iza­tion project, told the coun­cil com­mit­tee.


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