City racks up over $6.9M for pot-related costs
Policing, enforcement fees make up lion’s share of Calgary’s spending
The city says it has incurred more than $6.9 million in cannabis-related costs since legalization last year — an amount that does not include spending on preparations undertaken in the six months prior to legal weed.
The cost of responding to legalization has so far exceeded the $3.84 million that was provided to Calgary through the province’s Municipal Cannabis Transition Program, according to city data.
Policing and enforcement costs make up the lion’s share of the city’s spending, but firefighters, bylaw and transit officers have also been tapped to respond to cannabis-related issues.
City lawyers and staff working in business licensing and building regulations have also been closely involved in the file.
Planners have also attended more than 100 appeal hearings held by the subdivision and development appeal board as would-be cannabis store operators flooded the city with applications.
“Now we’ve got edibles as the next piece and who knows what other (changes) there is going to be at the federal and provincial level going forward,” said Matt Zabloski, the city’s lead on legalization.
“Training of our officers is ongoing right now in terms of edibles and what that’s going to mean for them.
“We’ll see what all falls out in the next few months, but there’s certainly going to be ongoing costs, and whether there’s an end in sight for those is anybody’s guess.”
The city had originally projected that the cost of administering legalized pot from April 2018 to the end of this year would be approximately $10.4 million.
“We do expect those costs to come down given that the implementation of cannabis legalization has been relatively smooth, but certainly it’s going to be significantly higher than the $3.84 million that was finalized by the province to give to the city,” Zabloski said.
Part of the problem, officials say, is that cities bear the brunt of administrative and enforcement costs when it comes to cannabis, without receiving the same financial benefits from the federal cannabis excise tax and revenues from provincial product sales.
“We remain extremely frustrated that the federal government’s very clear direction was that their cost-sharing with the provinces on the cannabis excise tax was meant to reimburse municipalities for their costs and, frankly, we’re just not getting it,” Mayor Naheed Nenshi said earlier this year.
City council recently advocated for improvements to cannabis revenue sharing as part of the YYC Matters election survey. Nenshi said the federal Conservative party offered the clearest response on the issue, pledging to review the implementation of the cannabis file, including taxation and distribution of taxation revenue.
Also of concern, Zabloski said, is the province’s cannabis transition program is set to run until the end of 2019, with no assurances of further funding in future years.
“I think what we’d like to see established is a continuing source of revenue to offset the costs incurred by municipalities,” he said.
“It’s highly likely that cannabis is going to be a windfall for the provincial government and we’ve seen that reflected in a variety of industry banking reports.
“But from our perspective, if we could get that 25 per cent (of the cannabis excise tax) that was promised by the federal government (and transferred) through the provincial government as an ongoing source of funding, I think we’d be quite happy with that, but so far we haven’t seen that.”