When marijuana is legalized for recreational use later this year, the Town of Osoyoos wants a share of the taxes.
At its meeting Monday, town council agreed to have staff send a letter of support for a proposal by West Kelowna that calls on the province to give half its share of tax revenue to municipalities.
Depending on the eventual formula and tax rate, this could mean municipalities would receive 37.5 cents on every gram of dried marijuana sold.
West Kelowna’s proposal came as a letter signed by Mayor Doug Findlater that was sent to local governments across B.C.
Findlater’s letter notes that legalization will entail additional social and policing costs for local governments.
He asked municipalities to write to the provincial government to lobby them to agree that 50 per cent of the provincial share of the cannabis tax be provided to local governments.
“This is an adequate and equitable share to help support costs and services incurred by local governments,” Findlater wrote.
Osoyoos council voted unanimously to support the request for 50 per cent, but the Town of Oliver wants even more – 75 per cent.
Oliver’s council recently voted to support West Kelowna’s request, but to ask the province to give municipalities three quarters of the provincial take.
Coun. Mike Campol pointed out that legalization will “be a lot of work” for municipalities based on bylaws and policing.
“It makes sense to me to be asking for a share of that tax, whatever that tax might be,” Campol said.
Mayor Sue McKortoff added that other issues such as public health, communication, zoning, planning, and fire services should also be included in the discussion.
“Asking for some money to help deal with this I think makes sense too, so I would support this,” McKortoff said.
In the fall, the Department of Finance Canada proposed that the pre-duty price for one gram of dried cannabis should be $8. An excise duty of $1 per gram would increase the price to $9. On top of this, consumers would pay GST or HST at the point of sale.
At the time, the federal government argued that the excise duty should be limited to $1, with the tax split 50-50 between the federal and provincial-territorial governments.
The federal government maintains that the goal of legalization is to keep cannabis out of the hands of children and profits out of the hands of criminals.
If taxes are too high, it could still provide an incentive for the black market to operate.
Subsequently, in December the federal government bowed to provincial pressure, agreeing that 75 per cent of the tax would go to provinces and territories and the federal government would only keep 25 per cent.
Although the municipal share wasn’t specified in this agreement, it was understood that a portion of the provincial share would go to municipalities.
The federal government also agreed to cap its take from the tax at $100 million a year, with any additional revenue going to provinces and territories.
B.C. announced in early December that it would set a minimum age of 19 to possess, purchase and consume cannabis.
The B.C. Liquor Distribution Branch will be the wholesale distributor of non-medical marijuana in the province, but the retail system will include a mix of public and private retailers. Further details will be announced early this year, the province said.
The Federation of Canadian Municipalities (FCM) in early November wrote to federal Finance Minister Bill Morneau calling for municipalities to have a place at the table in federal-provincial discussions and to receive federal funds for municipal start-up costs.
“Regardless of the formula adopted, ensuring public safety will depend on predictable, long-term support for local administration and enforcement,” said the FCM letter signed by president Jenny Gerbasi, deputy mayor of Winnipeg. “There is ample precedent here: all eight U.S. states that have legalized recreational cannabis have adopted predictable funding allocations for their local governments.”
RICHARD McGUIRE
Osoyoos Times
