Skip to main content

B.C. is expecting legalized cannabis to bring in $75-million a year from its share of the federal excise tax, with legal sales estimated to be worth $1-billion in the province.

JONATHAN HAYWARD

Part of cannabis laws and regulations

Mayors across British Columbia want the province to hand over at least 40 per cent of cannabis revenues to help municipalities pay for the expenses of accommodating legal marijuana sales when they begin next month.

The sharing arrangement suggested by the Union of BC Municipalities would be similar to how Ontario has said it will divvy up provincial profits from legal cannabis. The proposal will be voted on by mayors of B.C.'s towns and cities at the annual UBCM conference next week.

Vancouver Councillor Kerry Jang, co-chair of a provincial-municipal cannabis committee, said the proposal – which includes a payment of $25-million up front to local governments – was based on helping communities recover the estimated $50-million total they will need to help end nearly a century of cannabis prohibition.

Story continues below advertisement

"[The Federation of Canadian Municipalities] actually suggested 50 per cent, but looking at the actual dollar amounts, it ended up being around 40," said Mr. Jang, who pushed to create Vancouver's cannabis-shop regulations, passed in 2015.

B.C. is expecting legalized cannabis to bring in $75-million a year from its share of the federal excise tax, with legal sales estimated to be worth $1-billion in the province.

The 40-60 split would only apply to projected provincial excise-tax revenue of $125-million over the first two fiscal years of legalization. Any revenue above that total should then be split in half between the province and its municipalities, the proposal states, with every community receiving at least $10,000 regardless of its population.

Mr. Jang said he expected the UBCM will adopt the position and an agreement with the province will soon be reached. A spokesperson for the provincial Finance Minister did not respond to a request for comment on the proposal Thursday.

A little more than a month away from legalization, Ontario and Quebec are the only provinces that have announced how they plan to share their cannabis revenues with communities.

Ontario, which recently ditched public storefront sales in favour of private retailers, has agreed to give cities $40-million in cannabis excise-tax revenue over the first two years, or about 40 per cent of the projected revenue of $100-million.

Quebec will give its local governments $20-million of its projected $73-million revenue – roughly 27 per cent – from the first two years of its cannabis excise tax and it will also commit another $42-million toward public-safety efforts across the province.

Story continues below advertisement

After the first two years of legalization, the UBCM wants to review this revenue-sharing agreement and determine whether to stick with it or scrap it in favour of increasing the provincial sales tax on cannabis products to up to 10 per cent from the existing 7 per cent. If that happened, then local governments would cease getting revenue from the excise tax and negotiate with the province as to how much of the provincial sales tax would flow into their coffers, according to Mr. Jang.

“We’re trying to keep the price low enough so people will stay with legal pot as opposed to going to black-market sources, which could be cheaper," Mr. Jang said of the approach. "That was for us the reason why we said ‘let’s look at that maybe two years from now, as opposed to up front.’”

Mr. Jang added that those communities that want to opt out of the retail sale of cannabis, such as Richmond, will still get the same amount of revenue from the UBCM proposal.

"Whether or not there's a pot shop, it should be like health care: you may buy your cigarettes in Vancouver, but come down with cancer in Burnaby," he said.

Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter