August 31, 2017 4:24 pm

Feds should pick up pot legalization’s costs to us, local governments say

A demonstrator smokes a joint during a rally in this file image.


Canada’s towns and cities will be forced to deal with many of the details of marijuana legalization, and need a significant cut of the tax revenues and profits, they argue.

By July of 2018, someone will have to have rules in place covering everything from where people can smoke pot to how marijuana fits into zoning rules.

That someone, in many cases, will be municipalities. With that job comes the costs of thinking through, making and enforcing rules. And with that comes new bills to pay.

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Deputy Winnipeg mayor Jenny Gerbasi, who is president of the Federation of Canadian Municipalities (FCM), is clear about how they should be paid: with the new tax revenues that higher levels of government are hoping to raise from legal pot.

“We’re working very hard to get them the message that it isn’t appropriate to impose unsustainable new burdens on us without providing revenue at the same time,” she says.

“Obviously, if there are costs that are going to be coming our way, there should be revenue that goes with that.”

WATCH: Manitoba Premier Brian Pallister suggested on Monday to delay the legalization of cannabis by a year in order to better understand the health impacts and other related consequences of marijuana consumption.

READ MORE: Local governments across Canada have ‘a lot of homework’ to do before pot is legal

Last Friday, the FCM wrote to the House of Commons health committee, arguing that municipalities needed funds both to implement marijuana legalization and to cover new ongoing costs.

On Monday, the organization sent its member municipalities a long list of things they would have to make decisions about before legalization, many of which can’t be dealt with until Ottawa and the provinces make their own decisions about a list of questions. Among them:

  • Will existing illegal dispensaries be grandfathered into the legal pot distribution system?
  • Will pot be sold by the private or public sectors? If the private sector, what restrictions will be placed on marijuana retail? How should business licences be organized? Should their numbers be capped?
  • There will be rules about where pot can be consumed. Will the provinces make them, or will towns and cities have to write their own?
  • Are local governments expected to regulate home grows?
  • How will impairment be detected and measured? With what equipment? Who will train police to use the equipment?

READ MORE: Across Canada, smoking laws will have to be updated by next July to deal with legalized pot

“We’re working very hard to get them the message that it isn’t appropriate to impose unsustainable new burdens on us without providing revenue at the same time,” Gerbasi says.

But with so many decisions up in the air, it’s hard to know how much money to ask for.

“There are a number of unknowns, so we’re trying to look at what we do know and start to look at what things we might be able to prepare for when it comes to the specific costs, whatever that will be. It’s hard to know exactly what that will be at this point.”

In November of last year, a report by the Parliamentary Budget Officer envisioned a 60:40 split of marijuana revenue between Ottawa and the provinces, ignoring the costs of legal pot to local governments.

However, the federal Liberals’ report last year on marijuana legalization acknowledged that at least some money from legal pot would have to flow to local governments.

Since then, the two upper levels of government have worked to manage expectations about legal marijuana being a new revenue source, stressing that the main goal is shutting down illegal markets, and that raising taxes, and hence the retail price of pot too high would undermine that.

WATCH: The town of Smiths Falls, Ontario, is crediting Tweed Inc., one of Canada’s largest medical cannabis for turning around its economy.

© 2017 Global News, a division of Corus Entertainment Inc.

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