Edmonton city council pulls money from reserve fund to cover cannabis costs

Edmonton city council is drawing on a reserve fund to help cover the costs of legalizing cannabis this year after being left in the dark on whether the province will provide financial help.

'We have no choice, I think, and that's unacceptable,' says Mayor Don Iveson

Edmonton city council votes to use $2.5 million from the financial reserve and $1.7 million in tax money to fund marijuana laws this year. (CBC)

City council is drawing from what Mayor Don Iveson calls a "snowy day fund" to help cover the costs of legalizing cannabis. 

Edmonton's chief financial officer Todd Burge confirmed Tuesday at a council meeting that the province hasn't put anything on paper for Edmonton yet this year.

Without provincial dollars in hand, councillors had to decide Tuesday where they would get the estimated $4.3 million needed this year to cover the costs of police training and equipment, bylaw enforcement and rezoning work which will allow cannabis retailers to operate. 

Council voted unanimously to pull $2.5 million from a financial reserve, a stash normally saved for unforeseen problems or for snow removal if needed.

Out of the city's estimated $4.3 million cannabis legalization cost,  $1.4 million will go to police for one-time funding for equipment and training. 

As part of passing the supplementary operating budget for 2016-2018, council also agreed to take an additional $1.7 million from the ongoing tax levy for cannabis. 

"We have no choice, I think, and that's unacceptable," Iveson said. "We should send a bill." 
Mayor Don Iveson is frustrated the province hasn't come up with a specific amount to help the city cover the costs of legalizing marijuana. (CBC)

The federal government will collect 25 per cent of the tax revenues from pot sales while allowing the provinces to take the remaining 75 per cent.

The provincial budget, released in March, does not include specific amounts for municipalities. 

Iveson has been asking the provincial and federal governments for several months for a specific deal to help cover the city's estimated cost of $9 million over four years.

"We know they have extraordinary costs related to this but so do we and so far that hasn't been recognized," he said Tuesday. "And that's problematic."

Several councillors, including Ben Henderson, shared the frustration that the province remains quiet.

"They're backing us into a corner by not giving us the money," Henderson said.

Business licence still unknown

Council will discuss next month how much the city should charge cannabis retailers for business licences.

While some cities charge the same amount as a normal business licence, others are considering higher fees for cannabis.

Henderson said he'll be looking for an amount that allows the city to recoup costs while encouraging business. He doesn't want to make it "prohibitively expensive" to operate.

"You'll drive everything back underground and that's not in society's best interests," Henderson said.

City staff said 400 people have expressed interested in applying for licenses but city officials say the Edmonton market won't be able to handle that many businesses. 



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