Minister warns pot will not be big money-maker
The B.C. government says revenue from legalized marijuana isn’t going to create the financial windfall many expected once the province’s thriving but illicit industry moves out of the shadows and is taxed like tobacco.
On Tuesday, Finance Minister Carole James cautioned against expectations.
“There will be revenue coming in after the first couple of years, but I don’t see it as a big money-maker for British Columbia,” James said at an editorial board meeting with The Vancouver Sun and The Province.
James just returned from a federal-provincial ministers meeting in Ottawa where the federal government announced Monday it will give provinces and territories 75 per cent of the excise tax on recreational pot, up from an initially proposed 50/50 split.
The remaining 25 per cent — to a maximum of $100 million a year — stays with the federal government. Legalized pot is expected to generate about $400 million in total tax revenues over the first two years.
The B.C. government has not factored revenue from marijuana into its February budget, and expects it will pay upfront costs for distribution, sale, enforcement and education.
James said precise figures on costs are not yet available as it depends on the retail model — something Solicitor-General Mike Farnworth said the government will unveil by early February.
Municipalities, which have been clamouring for funding to offset costs of legalization, would get funding from the province, but won’t follow a set formula.
“It’s not going to be how much of the 75 per cent,” James said. “It’ll be more of a conversation of what are the responsibility areas municipalities will be taking on, and how we can make sure the resources are there.”
James also responded to concerns by provincial health officer Perry Kendall and Marcus Lem, chair of the Health Officers Council of B.C., about the health risks posed by selling marijuana at liquor stores.
In a letter to the editor, the health officials said co-location could promote the co-use of both substances, increasing the likelihood of more impaired driving, and could lead to more people being introduced to the drug.
The letter also said the direction of alcohol policy in B.C. is “to increase acceptability and access,” which goes against the principle of protecting public health and safety built into the proposed marijuana regulation.
“We’ve seen people who have expressed that concern,” said James on co-location, which has the support of the B.C. Government and Service Employees’ Union and the Alliance of Beverage Licensees.
Farnworth will take the province’s health officials feedback into account when he puts together the retail model, James said.
James also offered some clues on what’s in store in the upcoming February budget.
Housing will figure prominently, with the rollout of a comprehensive housing strategy.
All measures are still on the table, including the foreign homebuyers tax, a speculation tax, more purpose-built rentals, or policies that promote densification or curb Airbnb and short-term rentals, said James.
The new budget will also have a commitment to the NDP’s $10-a-day child care plan.