When it comes to the legalization of cannabis, all levels of government are looking for a piece of the tax pie. But the province’s cities and towns are going to have to wait.
Alberta Premier Rachel Notley recently said the province doesn’t plan to transfer any funds to municipalities to help with the startup costs. Until the province sees a profit from the marijuana industry, it’s unlikely that municipalities will get any money for their role in legalization.
“When we are projecting to actually have to spend money on it we are not actually also planning to spend additional money by transferring more money to the municipalities,” Notley said.
Notley did suggest that her position could change, but thinks that the biggest costs will be provincial.
“We will track who is paying what and we can easily go back to the table on that.”
While this news is disappointing for cities and towns, it does make sense. At this point, nobody knows the true costs of legalization and the province should not simply hand over money arbitrarily.
The Alberta Urban Municipalities Association (AUMA) has asked for 70 per cent of cannabis taxes and $30 million from the 2018-19 provincial budget to help municipalities offset the costs, which Notley called “amusing.” It’s a tried and true government technique to ask for the moon and settle for something less. That very well might be the case with the AUMA.
The City of St. Albert is predicting that cannabis costs could be between $1.96 million and $3.53 million in 2018 with ongoing costs of up to $2.2 million per year. That number seems out of line with what other places are predicting. Calgary, a city with more than 1.2 million people, is predicting ongoing costs of $9-12 million per year. The per-capita cost between these two cities is noticeably different.
That’s not to say municipalities shouldn’t be funded for their role in cannabis legalization, because they should be compensated. Notley’s response would indicate that her government is willing to pay the actual costs of legalization down the line, which is fair.
Why would the provincial government hand over 70 per cent of cannabis taxes to municipalities without hard evidence that they are incurring 70 per cent of the costs? If it becomes clear that municipalities are paying the bulk of the costs, then the issue can always be revisited.
The startup costs of legalization aren’t as significant as the long-term costs. Increased health-care costs and societal costs may not be as obvious, but will need to be paid for one way or another, regardless of which government is footing the bill.
Like many things involved in cannabis legalization, the true cost to municipalities is unknown. All estimates at this time are extremely premature; we won’t know for sure until it happens. Instead of pie in the sky proposals, Alberta’s municipalities should track their costs and present them to the provincial government. All parties should be compensated fairly.
- reprinted from St. Albert Gazette, a Great West newspaper
