Legalization leaves local governments hanging

Legalization of cannabis is upon us in Canada. It marks a potentially massive shift in how our society operates, touching upon so many institutions of Canadian life. From public safety to retail services to transit and labour law, legal cannabis will require significant and trusting co-ordination among all orders of government.

Local governments are the order of government closest to Canadians’ daily lives and as a result, municipalities are on the front lines of cannabis legalization. The Federation of Canadian Municipalities, whose members represent over 90 per cent of Canadians, has been helping communities get ready by providing tools and engaging our various partners. But municipalities cannot do it alone. An important element of a safe and effective rollout of cannabis legalization will require a clear framework for the sharing of costs that come with this new policy.

Much has been said about the revenue potential of cannabis sales, but too often we forget about the significant cost. Legalization has operational and cost implications for as many as 17 municipal departments. And as of today, in many communities, local taxpayers will be on the hook for these bills.

Among these is the cost of the additional policing resources required to manage this new reality. Local governments already pay for more than 60 per cent of all policing costs in Canada. As of 2017, 56 per cent of police officers were employed by stand-alone municipal police services and 18 per cent were employed through RCMP contract policing.

Fortunately, the federal government has recognized our key role in a successful transition to a legalized cannabis regime. In September 2017, the government of Canada committed $81 million towards helping police services prepare for legalization, including training and technology to tackle drugimpaired driving. Yet municipalities are still waiting on details of how this will be addressed at the provincial level, despite the fact that costs continue to mount.

Because of our nationwide efforts, the federal government also released half of its own cannabis excise tax revenues to the provinces. These dollars were designed to support municipal governments on the front lines of legalizing cannabis. Yet, only Ontario, Quebec and Alberta have revealed plans to share those funds with local governments. Too many of our members across Canada do not have any clarity on how cannabis costs will be covered through provincial revenue sharing frameworks. As the lead on cannabis legalization, the Government of Canada will need to ensure adequate revenue-sharing plans are in place and municipalities are made whole for the costs of this federal policy.

There is clearly more to do and the lack of information on revenue sharing for many local governments, this close to legalization, is worrying. Some provinces have even indicated that they will not allow the portion of federal excise tax revenue intended for municipalities to flow to communities. This is unacceptable.

Municipalities are calling on the provinces to bring forward a clear path to uphold their end of the deal and provide support to municipalities to address local challenges around cannabis legalization. This also means the federal government needs to step up as the leading authority on this new cannabis framework to ensure provincial plans for revenue sharing are finalized and implemented. Local governments have been hard at work changing bylaws, ensuring local police services are equipped and engaging citizens. But getting this right requires municipalities getting all the tools they need.

Mayors and councillors across the country have been calling for a modern fiscal framework. No clearer example exists to update this imbalance than when a new federal initiative like cannabis legalization places undue burden on the local order of government.

So while cannabis legalization moves forward, Canadians can count on municipalities to be ready and prepared to adapt to the challenges ahead. But one challenge we can’t fix alone is ensuring local costs are fully and sustainably covered for this new federal initiative.

Successful legalization requires collaboration across orders of government and municipalities are ready to do their part. Let’s work together to get this right.

Vicki-May Hamm is the president of the Federation of Canadian Municipalities and mayor of Magog, Que.