The Association of Manitoba Municipalities says a new poll shows Manitobans support local governments getting their piece of the cannabis tax pie.
The Probe Research poll, done on behalf of the AMM, reported that about 33 per cent of 1,000 replies thought municipalities should get half the tax revenue, while 59 per cent indicated local governments should see half or more.
Another 19 per cent thought local governments deserved less than half the money, while five per cent, the lowest of all options, thought local governments should be locked out of the revenue stream. Sixteen per cent were undecided.
The federal government estimates those taxes could top $1 billion annually and has promised to share with the provinces. The rate is said to be planned at the $1-per-gram rate, or roughly 10 per cent of the planned retail cost.
The AMM has been making its case for a share for months, and now it says the poll shows others agree.
“These numbers show that Manitobans are concerned about the increased costs of cannabis legalization and their local government’s ability to pay for it,” Chris Goertzen, AMM president said. “This is just another example of how municipalities deserve a ‘fair share’ of revenues, and our citizens support this.”
Who’s getting what?
The federal government has agreed to release half its cannabis tax revenue to the provinces and cap its own share at $100 million a year, with the understanding that extra funds will help bolster municipalities. As it sits now, provinces stand to glean 75 cents of every dollar of cannabis tax gathered.
The changes came after widespread complaints that the originally proposed 50-50 split between the provinces and federal government locked out municipalities.
“Over the last few months, we’ve been pushing, certainly, for a one-third revenue sharing and so what we’ve done now is, obviously, we have a poll that says clearly that Manitobans agree with AMM and we need to make sure that municipalities have a fair share of the excise tax so that we can deal with the policing costs and other costs,” Goertzen said.
The AMM has got no formal response from the province on the poll, although Goertzen says discussions continue.
Manitoba’s minister of municipal relations says there is ongoing work between all three levels of government as the July 1 cannabis legalization date nears.
“As we’ve said from the start, it’s important to be realistic in any expectation of new tax revenue from the cannabis market,” Minister Jeff Wharton said. “Given our objective of ensuring price competitiveness and eliminating the black market, combined with additional expenditures required for health and education, there is limited room for new taxation. The reality is the provinces and territories will bear the majority of costs associated with the health, social and policing implications of legalized cannabis, including establishing the regulatory and distribution system.”
Municipality of Killarney-Turtle Mountain Mayor Rick Pauls does not agree.
Pauls said his municipality operates its own police force and will therefore absorb the bulk of those costs.
The Killarney-Turtle Mountain mayor hopes at least half of what comes to the province will be forwarded on to municipalities.
“As much as they can give back to the municipalities, I think that’s very advantageous to us because we’re the ones who are probably going to bear the brunt of the responsibility and, to be quite honest, the brunt of the expenses,” he said.
Pauls has also joined with those who still have questions on the province’s rollout. In particular, the mayor wants better guidelines on intoxication and machinery operation, something he says will directly impact the RM, as well as local police.
“On a liability side, on a municipal level, when we have employees and things like that, if we have an employee who smoked pot on Friday or Saturday night — perfectly legal to do so — gets in an accident Monday morning, are we going to be held liable because they could possibly still be under the influence?” he posed. “Alcohol is different. Alcohol we have a measuring system.”
There has been evidence that cannabis intoxication can last more than 24 hours and can last after other signs have faded, Health Canada says.
In fall 2017, the federal government released proposed blood concentrations for marijuana intoxication. The regulations noted, however, that they cannot lay down how much of the drug must be consumed before tipping over that limit or how much time it takes before that person can drive.
Local reeves speak
Municipalities themselves have largely lined up behind the AMM. Don Yanick, RM of Yellowhead reeve, said his council hopes for an equal split between the three levels of government, the same funding model pushed by both the AMM and Federation of Canadian Municipalities.
“We think that there’s a way for us to get some tax money out of it,” he said.
The RM of Yellowhead is among those to definitively allow cannabis retailers to set up shop after the province announced that all municipalities had to decide whether to allow sales in their areas by late December 2017.
The RM of Killarney-Turtle Mountain has made a similar choice, although Pauls has expressed doubts on how viable a cannabis retailer might be. Pauls says Killarney’s 2,400 population is unlikely to sustain such a business.
“To be honest, with the regulations and things like that, you need to have a fairly big marketplace in order for it to be financially viable as a business. I don’t ever think we’re going to see one in a community our size,” he said.