With the federal government having announced Oct. 17, 2018, as the date on which recreational use of cannabis will be legal, Alberta municipalities are still struggling with how they will manage the costs associated with legalization.
“We were disappointed we didn’t hear from Kathleen Ganley, minister of justice and solicitor general, after she had issued her statement on behalf of the province regarding the legalization date for cannabis,” says Barry Morishita, president of AUMA.
“AUMA has been rigorously advocating on behalf of our members to receive their fair share of the cannabis excise tax to offset the municipal costs, and we had hoped the province would allocate appropriate, fair and equitable funding to municipalities.”
AUMA believes the legalization of cannabis for recreational use will have significant fiscal impacts on municipal services such as policing and bylaw enforcement, municipal administration, public health, emergency services, and other services that deal with community impacts.
“Generally, the costs fall into two categories: administration and enforcement,” says Morishita. “Administrative costs include land use, business licensing, administrative and bylaw enforcement, fire prevention, public health and education, and communications and public engagement.
"Of greater concern for municipalities, though, are the enforcement costs. This includes the capital and operational costs to enforce the new cannabis and impaired driving laws, which will require additional staff, additional or new training for drug recognition and drug testing equipment, the purchase of additional equipment, and other police enforcement activities.”
AUMA has formally requested funding support for legalization that includes 70 per cent of the cannabis excise taxes the province receives from the federal government and a $30-million fund in budget 2018-19 for transition to the new legislative and regulatory framework. As well, AUMA wanted a commitment from the province to review the provincial-municipal tax-sharing agreement in three years’ time to ensure municipalities are adequately resourced.
“Despite our attempts to demonstrate the impact legalization will have on municipalities, the province continues to state that the soonest we would see funding would be 2020,” he said. “This is surprising to us, especially considering other provinces, such as Quebec and Ontario, have committed to sharing a portion of their excise tax revenue with their municipalities.”
While the gaps in data on current recreational users make it difficult to calculate the economic impact of legalization on Albertan and Canadian municipalities, a number of municipalities in Alberta have undertaken these calculations based on data from other jurisdictions.
AUMA recently held working sessions to develop a tool to assist municipalities in tracking their costs. A draft of this tool is expected to be finalized before fall.
- Alberta Urban Municipalities Association
