Revenue Sharing: The Billion Dollar Question
The submissions and surveys are piling up on the desks of our politicians, as provincial governments across the country ask for feedback on cannabis legislation. What should be included in Canada’s legal framework? What will distribution and retailing look like? How do we protect public health and safety? These are some of the questions being asked as governments, law enforcement agencies, businesses and communities weigh in on the debate.
But, perhaps the billion dollar question is: how will revenue be dispersed? Increasingly, municipalities are concerned that what goes up may not come down - that not enough tax dollars will trickle down to local governments.
In particular, will cities and towns receive their fair share of funding to help pay for extra policing and enforcement costs associated with legalization?
In its recent submission to the BC government, the BC Association of Municipal Chiefs of Police urges the Province to factor the cost download of enforcement to local police when developing a revenue sharing structure.
The group requests funding for a number of programs such as the re‐creation of cannabis enforcement teams, Drug Recognition Expert and Standardized Field Sobriety Test training, and organized crime investigations, to name a few.
BC cities such as Port Coquitlam, View Royal, Quesnel and Kelowna also requested that cannabis revenue be directed to municipalities to cover the extra costs they will incur.
The Union of BC Municipalities surveyed its members earlier this year. According to the report, by far the most prevalent concern with legalization is the potential for downloading of duties.
Respondents noted that policing costs continue to rise and are approaching 30 per cent of most urban local government budgets. And, things such as by-law enforcement, oversight and approval of personal cultivation, crime prevention, public education campaigns and new equipment for roadside testing would all increase local government costs.
The Federation of Canadian Municipalities has also been asking officials whether legalization will place unsustainable financial or operational burdens on municipalities. But, the answers are still unclear.
The feds recently announced $526 million in new funding over five years for federal agencies, of which $68 million will go the RCMP and $6 million to the Public Safety ministry. And, in September they announced up to $274 million to support law enforcement and border efforts related to legalization.
But, municipalities are hoping there will be more funding announcements to come. They are on the frontlines of legalization, and are hoping they won’t be last in line when it comes time to divvy up the cannabis tax pie.