British Columbia

B.C. municipalities request 40% of province's pot tax revenue

The UBCM strategy, approved in a vote Thursday, recommends a two-year agreement that would see a projected $50 million given to local governments.

UBCM proposal recommends 2-year agreement that would net projected $50M for local governments

B.C.’s municipalities have voted in favour of garnering a large share of the tax revenue generated from cannabis sales. (Steven Senne/Associated Press)

B.C.'s municipalities have voted in favour of garnering a large share of tax revenue from cannabis sales.

On Thursday at the Union of B.C. Municipalities convention, members passed a resolution to request a 40 per cent share of cannabis excise tax from the provincial government.

"I'd say we're open to having that discussion," said Finance Minister Carole James.

"I think that's important, and I'm glad for the work that they've done because that will help us in our conversations."

Once non-medicinal cannabis is legalized on Oct. 17, consumers will have to pay an excise tax of $1 per gram or 10 per cent of the retail price whichever is higher.

The federal government has agreed to take a 25 per cent share of the tax, and give 75 per cent to the provinces and territories. 

Solicitor General Mike Farnworth says the distribution of the excise tax is the last major outstanding issue before legalization.  

"We have been really clear that we know that local government is interested in revenue sharing. It's happening in every other province, and so absolutely we've not dismissed anything out of hand," Farnworth said.

"We've had in place the joint working group on regulations of cannabis today, which has been very successful, and my expectation is that that work will continue and at some point we'll come to a resolution."

$50M for local governments

The UBCM strategy seeks to adopt Ontario's model for cannabis excise tax sharing as a framework for a B.C. agreement. 

It recommends a two-year agreement, with 40 per cent of the projected provincial excise tax revenue of $125 million provided to local governments — amounting to $50 million.

The money would be divided on a per capita basis, with a $10,000 minimum for municipalities and regional districts. 

According to the proposal, any revenue in excess of that projection will be shared equally between the province and local governments. 

A long-term revenue sharing strategy from the UBCM recommends keeping the 40 per cent share in place or increasing the provincial sales tax on cannabis from 7 per cent to 10 per cent in lieu of revenue from the excise tax. 

With files from Justin McElroy

Read more from CBC British Columbia

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