Premier Rachel Notley says Alberta municipalities are unlikely to see funding for marijuana until the province turns a profit from the sales of the drug which could take two years or longer.
St. Albert mayor Cathy Heron said that she is disappointed in the news and that it is wrong that municipalities will not be getting funding sooner when they are shouldering much of the costs.
Notley, who was in St. Albert on Monday for a series of appearances, said that the province is not planning on writing cheques to municipalities in Alberta when the province expects to take a loss on cannabis 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.
Alberta is anticipating cannabis costs will be in the red until 2020-21, when the province expects to make $37 million off the new industry. In the first two years the province expects the legalization of the drug to cost $90 million.
Notley said that her government will keep a close eye on the costs as legalization rolls out but said it is unlikely that municipalities will see any money until the province turns a profit.
“We will track who is paying what and we can easily go back to the table on that,” Notley said.
In February, Alberta urban municipalities asked the provincial government for 70 per cent of the provincial tax money from marijuana and $30 million from the 2018-2019 provincial budget to handle one-time costs incurred by municipalities related to the legalization of the drug.
Notley called the funding ask “amusing.”
Heron said municipalities are shouldering much of the cost for cannabis and should be compensated.
“I think that the province needs to acknowledge that some impacts will fall on municipalities. I would like them to recognize that,” Heron said.
The mayor said that she believes that the majority of the expenses will fall on the policing and enforcement side. Municipalities over 5,000 people or any city that has their own police force will “absolutely” see an impact from legalization.
“I just know that the provinces will not have 100 per cent of the costs so why would they get 100 per cent of the revenue,” Heron said.
The premier said that she believes that the biggest costs with legalization will come keeping the black market out, making sure the drug supply is healthy and keeping cannabis away from kids. Notley said most of the responsibility for that lies with the provincial government.
Notley said that her government will keep an eye on policing and enforcement costs as the process moves forward but doesn’t want to “come up with an arbitrary number” for funding to give to municipalities.
“We are leaving ourselves the flexibility to deal with how the costs fall between the various players who are engaged in the administration of this federal law,” Notley said.
On Thursday afternoon it was announced that the federal government is collecting an additional 10 per cent tax on marijuana on behalf of the provincial government in lieu of a provincial sales tax. The money will be distributed to the province after collection.
AGLC will be able to collect a markup on the distribution of marijuana through online sales but is limited to covering the costs of AGLC’s cannabis operations and a “reasonable profit margin.”
In 2017 it was announced that the federal government would be collecting one dollar per gram on cannabis and 75 per cent of that revenue would be given to the provinces.
Cannabis is slated to be legalized across Canada in August 2018.