The Saskatchewan Urban Municipalities Association is calling on the provincial government to share cannabis excise tax revenue. (File Photo/paNOW Staff)

By Michael Joel-Hansen

Cannabis and Taxes

SUMA calls for province to share funds from cannabis sales

Oct 31, 2019 | 5:29 PM

The group that lobbies the provincial government on behalf of cities towns and villages wants to see some changes on the revenue front in regards to the cannabis excise tax.

Gordon Barnhart, president of the Saskatchewan Urban Municipalities Association (SUMA) said when the federal and provincial governments negotiated how the revenue would be split up local governments were supposed to get a share.

“75 per cent went to the provinces with an expectation that a quarter of that, 25 per cent would be shared with municipalities,” he said.

The issue of revenue sharing in terms of cannabis has come up again as the Government of Saskatchewan has announced in the future they will no longer cap the number of permits issued. The province will give municipalities the power to decide on whether they wish to allow more shops.

Barnhart said with the legalization of recreational cannabis, cities, towns and villages are shouldering a number of costs.

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“All of the bylaws that are needing to be enforced … policing costs, roadside checks, training for police to be able to do the roadside checks, but also to have the equipment for those roadside checks,” he said.

The SUMA president said the provincial government has defended the decision to not share revenues by arguing that no other province is passing on revenues and also that there is not much money being collected anyway. Barnhart said the amount of money is immaterial and that it might be better to get started with the smaller amounts.

“25 per cent of it is still 25 per cent,” he said.

Craig Guidinger, director of planning and development service at the City of Prince Albert said the decision of whether to allow more shops in the city is a decision which rests with council. He said when it comes to cost around policing there has not been an uptick in costs associated with legalization.

Leading up to legalization, the city spent $40,000 to do the work to draft the legislation governing shops in the city. There are costs associated with making sure the bylaws governing the businesses are properly followed.

“It’s an ongoing issue we have to monitor,” he said.

Guidinger said any shared revenue model would be appreciated by the city in helping to deal enforcement. He said currently there have not been any extra costs associated with either of the shops in P.A.

In response to SUMA’s statement, government spokesperson Matthew Glover wrote the government is committed to providing strong support for municipalities. The government touted their revenue sharing agreements with municipalities which they say in 2019-20 are worth over $400 million.

“Creating one-off agreements would not be as effective and would seem counter to the stable and predictable Municipal Revenue Sharing formula the Province and municipalities have worked to achieve,” wrote Glover.

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MichaelJoel.Hansen@jpbg.ca

On Twitter:@mjhskcdn