Nova Scotia

Municipalities mull how cannabis crops might influence property tax

Nova Scotia's municipalities are not fully prepared for the legalization of cannabis this Wednesday.

Councillor fears 'we'd be left out in the cold as far as any taxation from the production of marijuana'

In this July file photo, a man removes dry leaves in a cannabis field in the village of Yammoune in Lebanon. (The Associated Press/Hassan Ammar )

Nova Scotia's municipalities are not fully prepared for the legalization of cannabis this Wednesday.

They've been unsuccessful so far in their efforts to get a share of taxes to cover the cost of enforcement, and there's no agreement on how to square pot use with local smoking bylaws.

Now, municipalities are thinking about how cannabis crops might impact property taxes.

Agricultural land used for food products is exempt from local property tax. The province provides a grant to municipalities as compensation.

Cape Breton Regional Municipality will address the matter beginning Monday said George MacDonald, a councillor in Glace Bay and a Nova Scotia Federation of Municipalities representative.

The problem is not with cannabis operations in industrial areas that are already subject to commercial taxes, he said.

"Right now, I think most cannabis spots where they're going to be producing is going to be indoors," MacDonald said. "But if it comes down the road where we're into agricultural land, I believe there's a dilemma there where municipalities are not allowed to tax agricultural land."

He said what would happen would be "we'd be left out in the cold as far as any taxation from the production of marijuana."

No proposals to grow pot on farmland in CBRM

There are no imminent proposals to grow pot on farmland in CBRM, he said.

But, MacDonald said, it's something municipalities will have to deal with sooner or later.

"I think there's a lot of people that are inquiring. Probably in the background, in the backrooms, they're getting ready, but I haven't heard of any yet, but I know it'll probably come for sure."

Betty MacDonald, executive director of the Nova Scotia Federation of Municipalities, said the organization has already asked the province for a review of all subsidies affecting property tax.

The legalization of cannabis in Canada beginning Oct. 17 is creating some issues for municipalities. (Jonathan Hayward/Canadian Press)

Federation members planned to discuss the issue of cannabis grown on agricultural land at an upcoming conference.

However, the issue is more complex than initially thought, she said.

"We received feedback from a number of our members who raised other questions around that issue of agricultural land, and should that request be extended to other types of non-food products, and we really don't have an answer to that."

Betty MacDonald said some municipalities raised the issue of grapes grown for wine, or other crops used for biofuel, and they question whether those should receive a public subsidy as food products.

'We wanted to get ahead of the game'

For that reason, the resolution on taxing farmland used for cannabis has been taken off the conference agenda.

"We don't want to put something forward that we're not clear on what the implications are," she said. "We wanted to get ahead of the game and understand and advise our membership on potential issues."

Municipalities are also dealing individually with the potential impact on local smoking bylaws. They vary now, and while some like Halifax are addressing their bylaws, others are taking a wait-and-see attitude, Betty MacDonald said.

The federation's fall conference will still debate a resolution urging other levels of government to provide municipalities with a share of the tax revenue from cannabis products to help cover the cost of increased enforcement, she said.

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