As July 1 creeps ever closer, Canadians are getting more details about the plans for the legalization of marijuana.
Justin Trudeau’s government is looking to charge $1 per gram (or 10 per cent of the price) with an even split on revenue between the province and the federal government.
Splitting the revenue would make sense if the work involved was divided evenly, but almost all of the heavy lifting will be done by the provinces and the municipalities. Provincial Finance Minister Joe Ceci has already said the tax split will not work for Alberta.
While the province wrestles Trudeau for a bigger piece of the pot brownie, there has been no indication that municipalities will be getting any share of the tax revenue. However, there are significant costs to local governments.
St. Albert City Manager Kevin Scoble said that preparing for the legalization of marijuana would be administration’s highest priority over the next year. The municipality will have to work on issues like zoning and enforcement as well as any unforeseen issues that come with a change of this magnitude.
The city is dealing with unknowns and there is a lot that won’t be known even after cannabis is legalized. What will be the public demand for legalized pot consumption? Will people be allowed to be stoned in public? How will bars deal with people who are impaired by marijuana? Will there be impacts on other businesses? How will police deal with impaired driving?
To date, Trudeau has provided no indication that his government plans to help municipalities with costs associated with legalization. Rather than rush legalization, the Liberals could’ve waited to give other levels of government more time to prepare, but that hasn’t happened either. So far the message to municipalities has been clear: you’re on your own.
One can hope that the province will help municipalities with the costs, but that will be impacted by the tax split with the federal government. With Trudeau planning to keep half of the tax revenue, it’s hard to imagine that municipalities will be fairly compensated for the costs. Municipalities will have to deal with policing, bylaws, zoning, public education, training and policy changes as a result of marijuana legalization.
There might be extra tax revenue for cities and towns down the road, but whether it’s worth their while remains to be seen. It’s not even known how viable these private marijuana businesses will be, given that they will have to compete against the provincial government, which is planning to sell marijuana online.
This half-baked marijuana legalization effort from the federal government is likely to create new problems for municipalities, without any new funding. Trudeau wants the credit for keeping an election promise, but he’s doing so by downloading the responsibilities to the provinces and municipalities. There will no doubt be new revenue for the federal government, but it will be the local governments who are paying the price.