Langley City has been told to chill when it asked the provincial government to split the cannabis tax revenue with municipalities.
The City lobbied the B.C. government for half of the provincial share of the pot tax revenues to pay for the effects of legalization.
“It is anticipated that legalization of cannabis sales will entail additional costs for local governments with respect to policing and fire services, building codes, planning, licensing and standards, communications, legal services, public health and social services,” said Kelly Kenney, the City’s corporate officer.
The province’s reply was not to expect much.
“The federal and provincial governments intend to keep cannabis taxes low to support the objective of reducing illicit market activity,” B.C. Finance Minister Carol James said in her reply letter. “As such, it is expected that cannabis taxation revenues will not generate significant provincial revenues.”
The provincial and federal governments have agreed to a 75/25 split. The federal government’s 25 per cent split is capped at $100 million in tax revenue annually. Anything above that would be given to the provinces.
The proposed tax rate would be $1 per gram or 10 per cent of the final producer’s selling price, whichever is higher.
Langley City wrote to the province at the request of the District of Kelowna which wants local government to lobby for the revenues to cover the varied impacts of the marijuana legalization coming in July.
“The province recognizes that the legalization of cannabis will lead to additional costs for local governments,” James noted. “We will be able to have more informed discussions once full details of the regulatory and taxation regimes are known and governments have more certainty in terms of expected future costs and revenues.”
James noted that B.C. has created the Joint Provincial-Local Government Committee on Cannabis Regulation with the Union of B.C. Municipalities (UBCM) to work out such arrangements.