N.W.T. gov't estimates $400K in 1st year of cannabis, no commitment to share with communities
Federal gov't upped revenue split with territorial government from 50/50 to 75/25 after complaints
The N.W.T. government expects to rake in profits of $400,000 in the first year of cannabis legalization, and has no plans to share any of it with municipalities.
Sara Brown, the CEO of the Northwest Territories Association of Communities [NWTAC], says she's made multiple requests for revenue sharing on behalf of communities, and has gotten a "flat-out no."
"Their argument is they are going to be out of pocket," she said. "They're not going to make it back — what they're going to spend. But neither are the communities."
In December, the federal government revised its initial proposal to split 50 per cent of cannabis revenue with provinces and territories. This was after the national Federation of Canadian Municipalities called for community governments to get a share of the money. The argument was those governments will be on the frontline of cannabis legalization.
The federal Department of Finance raised the territories' and provinces' share to 75 per cent, with the expectation that those governments will "work with municipalities according to shared responsibilities toward legalization," according to a federal news release at the time.
Brown wants the N.W.T. government to share one-third of its cannabis revenue with communities to help pay for the costs associated with legalization, including zoning, business licensing, enforcement and emergency services, such as ambulances.
"[The one-third model] seems to make sense given that's what the feds have done and they're like, 'Prove it to us,'" she said.
"And we're like, "You didn't have to prove it to get your revenue, why do we?'"
'Not required' to share
Department of Finance spokesperson Todd Sasaki stated in an email that the N.W.T. government is not required to share revenues with municipalities.
"The government of the Northwest Territories encourages community governments to identify any extra costs expected as a result of legalization," he stated.
According to Sasaki, government officials said this to community officials in January, and reiterated it the next month during a Northwest Territories Association of Communities meeting in Hay River.
Yellowknife Mayor Mark Heyck says consultation with the N.W.T. government has been "inadequate" and when asked whether he's gotten the message that the city should approach them, he said no.
"Through the NWTAC we have lobbied the territorial government to share some of those revenues, but as far as I understand the response to this point has been no," he said.
City may need more bylaw officers
Heyck says the city will need money to help pay for zoning and business licensing issues, legal analysis to make sure municipal laws are in sync with territorial and federal laws, and it may need to hire more bylaw officers.
"I think that a salient point is that this legislative change was made at the federal level," said Heyck.
"It's having an impact on us. The federal government has said they've actually upped their original proposal to share 50 per cent of revenues with provinces and territories to 75 per cent and our understanding of that move was there was an intention there to share some of those increased revenues with the municipal governments who are going to be regulating and enforcing some of the new laws."
'Paternalistic, unfair approach'
When asked about the issue, Coun. Adrian Bell immediately brought up the fact that the territorial government admitted three years ago that it's underfunding the city to the tune of $11 million per year, and this problem still persists.
"Here they are identifying a new revenue source? To say that, 'No, none of this is going to the city,' it seems like a paternalistic, unfair approach," said Bell.
Earlier this week, Prime Minister Justin Trudeau announced cannabis will be legal in Canada on Oct. 17.