Local governments should get 40% of pot-tax revenue: UBCM

VANCOUVER — The advocacy group for local governments in B.C. wants the provincial government to fork over a 40 per cent share of its marijuana-tax revenue when the drug becomes legal.

The Union of B.C. Municipalities has tabled a resolution asking the provincial government to provide local governments with $50 million of the projected provincial cannabis excise tax revenue of $125 million over the first two years of legalization.

Representatives from city councils across the province will vote on the resolution next week during the union’s annual convention.

Vancouver Coun. Kerry Jang, who co-chairs a joint provinciallocal government committee on cannabis regulation, says municipalities will face new costs when non-medical marijuana becomes legal Oct. 17, including policing, administrative and staffing costs related to enforcement and zoning.

Although it’s unknown exactly how much revenue will come in from pot legalization, Jang said local governments want some of the money up front to avoid having to find other sources, such as boosting property taxes.

“To be honest, nobody really knows what the revenues are going to be like. That’s why we’re saying look, this is for the first couple of years to get us going and then we can look at other models afterwards,” said Jang.

The resolution proposes splitting any extra revenue above the province’s projected amount evenly with local governments.

Excise tax revenue would be distributed to local governments on a per capita basis, with all municipal and regional districts receiving a minimum of $10,000, regardless of population.

Depending on how accurate the revenue projections turn out to be after two years, the resolution suggests either continuing with the same model or considering a boost in provincial sales tax on cannabis from seven per cent to a maximum of 10 per cent and committing a portion to local governments.

In December, the federal government agreed to give 75 per cent of its marijuana excise tax revenue to the provinces and territories for two years, capping its own portion at $100 million.

It’s up to the provinces and territories to determine how much revenue to share with municipalities and regional governments.

On Friday, B.C. Finance Minister Carole James said the government is forecasting very little revenue from cannabis, particularly in the first year of legalization.

“There are a lot of up-front costs around the infrastructure that’s going to be needed to be able to manage the licensing and structures in our communities, so we are continuing to have conversations with municipalities about what they see as their role and what the provincial government’s role is,” James said.

In a statement, the B.C. Ministry of Finance said the provincial government will bear “the vast majority” of costs to legalize cannabis.

The province does not expect substantial revenue from cannabis legalization in the near future, the ministry said. Its goal is to keep duties on cannabis low to stem the black market.