Edmonton

Cannabis production facilities in Alberta to face higher property taxes

The change in tax status comes into effect in the 2020 tax year, the provincial government announced Wednesday.

Changes coming into effect next year will offer municipalities 'new revenue stream'

Changes to the Matters Relating to Assessment and Taxation Regulation now means that buildings housing cannabis production will be assessed at market value and taxed at non-residential rates, the Alberta government announced Wednesday. (Dave Dormer/CBC)

Cannabis production facilities in Alberta will pay higher property taxes under changes announced Wednesday by the provincial government.

Growing facilities had been receiving a tax exemption as agricultural operations as they were treated as farm buildings, meaning they paid no taxes in rural municipal districts and counties.

The facilities paid 20 per cent of the rate in urban municipalities that include smaller towns and villages. 

Now, however, buildings that house cannabis production will be assessed at market value and taxed at non-residential rates, Municipal Affairs Minister Kaycee Madu told rural politicians and staff at the Rural Municipalities Association (RMA) convention in Edmonton. 

Municipalities asked for the change, Madu noted.

"Our government agrees with you," Madu said. "Cannabis does not fall into traditional definition of agriculture and should not be tax exempt." 

The change in tax status comes into effect in the 2020 tax year. It doesn't affect greenhouse or industrial hemp operations.

Aurora Cannabis, which has a facility in Leduc Country, called the news "disappointing" but said it remains commtted to its home province.

"Our founders are proud Albertans, and are proud to bring continued value to the province through creation of more than 2,000 jobs to date and investment of over $500 million," Michelle Lefler, Aurora's vice-president of communications, said in a written statement.

"We will continue to work closely with our provincial and municipal partners, and see a bright future for communities across the province as we continue to build the global cannabis industry from right here at home."

NDP municipal affairs critic Joe Ceci agreed the move will help the small number of municipalities affected by the change.

He said the provincial government is using these types of announcements to distract from cuts in the budget. 

"The Kenney government is putting a few things in the window but they're taking away so much more that they don't want people to take a look at," Ceci said. 

Al Kemmere, president of RMA, said about 25 municipalities represented by both his organization and the Alberta Urban Municipalities Association, have cannabis facilities.

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