Alberta urban municipalities are asking the provincial government for 70 per cent of the tax money they receive from marijuana.
On top of the request for the tax revenue, Alberta Urban Municipalities Association (AUMA) is also asking the provincial government for $30 million from the 2018-2019 provincial budget to handle one-time costs incurred by municipalities related to the legalization of the drug.
The AUMA wrote a letter to Provincial Justice Minister Kathleen Ganley’s office on Tuesday asking for 70 per cent of the taxes the province generates from marijuana. If granted, this would give municipalities a total of 52.5 per cent of taxes on marijuana and leave the province with 22.5 per cent. The federal government is keeping 25 per cent of all taxes on the drug.
St. Albert Mayor Cathy Heron said that it is very important that the municipalities get money from the provincial government to help cover the costs of legalization.
“Our only option for raising money is property taxes so it’s not the best way to do it. The excise tax is perfect,” Heron said.
Ganley said that right now the province is still having ongoing conversations with municipalities about funding and have made no decisions regarding the division of tax money. Ganley did not give a timeline or date for when municipalities would know when they would receive funding.
“Certainly I think the lion’s share of the cost of this is going to fall to the province so that should give you some idea,” Ganley said.
One of the reasons AUMA asked for 70 per cent of the provincial revenue is because the province will be generating marijuana revenue through the online sales of the drug. Last year the provincial government announced that public sales of marijuana are allowed through brick and mortar shops but all online retail of the drug will be left to the province.
Heron, who is vice-president of cities under 500,000 and an executive member of AUMA, said that AUMA believes the money generated from the online sales and the remaining tax money will be enough to cover the provincial costs associated with legalization of the drug.
“We feel like that money will be able to support the Alberta expenses,” Heron said.
Heron said that AUMA did not suggest how the 70 per cent of tax revenue or the $30 million for one-time costs would be divided between the municipalities. Along with the recommendations, AUMA suggested reviewing the cost-sharing agreement in three years given the uncertainty surrounding the costs associated with legalization.
The mayor said that most of the costs to the municipality will primarily be from enforcement, bylaw and administrative procedures and policies.
AUMA estimates that the legalization of cannabis will cost Alberta cities between $26 and $42 million dollars. In St. Albert the worst case financial scenario for legalization is expected to cost the city $1.96 million to $3.53 million, plus or minus 50 per cent, in 2018.
St. Albert detachment commander Insp. Pamela Robinson said in January that the legalization of cannabis could mean the need for up to 10 new RCMP members and up to five new municipal enforcement officers.