What will cities need to prepare for legalization?

Municipal governments are lobbying their provincial counterparts to outline how much money will be allocated to cities post-legalization

Municipal governments are lobbying their provincial counterparts to outline how much money will be allocated to cities post-legalization, with the Federation of Canadian Municipalities (FCM) stating that the proposed legislation puts cities on the “front lines of keeping Canadians safe and served.” Mayors across the country have highlighted administration, law enforcement and policing as general areas for funding but are yet to disclose specifics on how much money they want and where it will be distributed.

The federal government announced that it would give provinces 75 percent of all tax revenues from cannabis on December 11, an increase from the initial suggestion of a 50-50 split with the federal government. And while Canadian Press reported that the figures were adjusted specifically to help municipalities cope with the impact of legalizing recreational pot, there will be no federally-mandated limit for how much should go to municipalities. Finance Minister Bill Morneau has said that cities will not get direct funding from federal tax but will have to negotiate their share from the provincial government’s tax stream.

Meanwhile, the FCM wants cities to receive a full third of all recreational pot revenues direct from the government. It estimates that each city will need between $3 and 4.75 million dollars per 500,000 people per year, of which $0.75 to 1.5 million would go to municipal administration and the rest to policing. The upper limit of their range entitles Toronto to $25.95 million and Montreal to $16.18 million a year.

In line with the FCM recommendations, Calgary mayor Naheed Nenshi is asking for $12 million dollars to cover costs from federal and provincial governments, and Quebec City’s Regis Labeaume and Montreal’s Valérie Plante said in early December that they wanted one third of provincial pot taxes to be earmarked for Quebec’s cities, emphasising potential “social issues” in their pitch to the prime minister. Phillippe Couillard is pushing back, and has said the figure should be based on estimates, not blanket percentages, according to a report in Radio Canada.

Detailed outlines of what cities intend to do with this cannabis tax revenue stream have not been included in the majority of statements put out by mayors to date. Toronto mayor John Tory has spoken about needing money for policing, social services and zoning enforcement, but his office is yet to clarify more specifically how much they need and where it will be invested. A statement issued by Mississauga’s mayor Bonnie Crombie identified zoning, by-law enforcement, licencing, public health and policing as “cost pressures” but did not elaborate further.

City of Montreal spokesperson Jules Chamberland said the city will not comment on costs until intra-governmental discussions are complete. Jeremy Davis, spokesperson for Winnipeg mayor Brian Bowman, said that the mayor had identified public safety and enforcement as priorities among a “wide range of potentially impacted departments.” More details will be unveiled in a public service review of the cost implications for the Manitoban capital in the New Year.

Like Winnipeg, Edmonton is waiting on a report, due to be published in March, that will outline potential costs for the city. Mayor Don Iveson has publicly said that funds will go into managing licenses as well as enforcement and policing costs.

While the FCM’s report outlines multiple potential beneficiaries of pot tax funding—from signage to fire safety and from business licensing to drug recognition expert training—it does not put a figure or weight to each stream. It states that the broad range of their annual cost estimate accounts for “variations in the impact of provincial and territorial policing and administrative responsibilities.”

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1 comment

  1. Maxcatski Reply

    The whole idea of an excise tax on cannabis is wrong. First, how will it cost more to police cannabis AFTER legalization? Prohibition was expensive. Yet somehow it will now take twelve million dollars a year to keep the people of Calgary safe… from legalization.

    If the City does nothing except conduct business as usual, zoning and permits will happen and social costs will reduce accordingly. It’s hard for politicians to resist the allure of more tax money. Let’s not pretend they need to spend it on controlling cannabis. Give my share to the homeless.