Nova Scotia

N.S. municipalities still seeking share of legal pot taxes

The Nova Scotia Federation of Municipalities says its members still aren't getting a direct share of federal excise taxes from legalized cannabis sales, despite a 2017 promise by the prime minister.

Federation head Waye Mason says province using federal taxes to fund NSLC store renos

Nova Scotia municipalities say they're paying the costs of marijuana legalization, but they're not getting a promised share of tax revenues. (Tom Ayers/CBC)

The Nova Scotia Federation of Municipalities says its members are not getting the revenue they were promised from federal excise taxes on the sale of legal cannabis.

Halifax regional councillor Waye Mason, president of the federation, said recently that Prime Minister Justin Trudeau promised the money to both provinces and municipalities back in 2017.

But he said the Nova Scotia government is blocking that from happening.

"Despite those public statements, the federal-provincial agreement is silent on the municipalities getting a share," Mason said at a Cape Breton Regional Municipality council meeting earlier this week.

Coun. Kendra Coombes says municipalities should get a share of federal excise taxes on cannabis to cover police training and enforcement costs. (Tom Ayers/CBC)

CBRM councillor Kendra Coombes said municipalities should get something back to cover police training and enforcement costs.

Instead, she said, the Nova Scotia government has told municipalities to send in bills that may be reimbursed later.

"Show our receipts, show how many fines did we give out, how many times did we have to stop somebody at the roadside," Coombes said. "It's ridiculous."

Mason said the money is rolling in from taxes on pot sales, but the provinces are reluctant to give up control over that.

Store sales, not taxes, should fund startup costs

He said the Nova Scotia government is hanging onto excise tax revenue to cover its startup costs, including leasehold improvements at Nova Scotia Liquor Corp. stores where cannabis is sold.

Those are costs that should be paid out of NSLC revenues, not excise taxes, Mason said.

The federal gas tax does go directly to municipalities, but Mason said that is likely a sore spot with provinces.

"The impression I have from talking around this in Ottawa is that the gas tax is a kind of a one-off," he said.

"It's very rare that you have money that passes the province and you can't have any say in how that's going to go, and the way it was put to me by one person up there is that one kind of slid through."

Halifax regional councillor Waye Mason says the Federation of Canadian Municipalities (FCM) wants Ottawa hand over some of the revenue to the FCM or its affiliates to distribute if the provinces won't do it. (CBC)

Mason said the Federation of Canadian Municipalities (FCM) is lobbying the federal government to allow it or its affiliates to distribute some of the revenue if the provinces won't do it.

"Where we're at is suggesting the federal government ... secure a guarantee the money will pass through, and if they feel they can't do that for constitutional reasons or political reasons and the province just won't hand the money over, just don't give the money to the province," he said.

"If the money is intended for us, they can keep that. They can put that through FCM or somebody else for programs that will actually come to us."

Revenues not so high

A spokesperson with Nova Scotia's Department of Justice told CBC News cannabis legalization is "complex and evolving."

"This is new for all of us, at all levels of government," said Heather Fairbairn. 

"We have asked the municipalities to track both their costs and savings. We remain committed to continuing discussions with them as we go forward."

The Canadian Press reported last week that Nova Scotia Finance Minister Karen Casey said overall cannabis revenues won't be as high as previously expected in this fiscal year, partly due to the delay in legalization from July to October.

She said cannabis revenues may only be sufficient to cover the costs.

About the Author

Tom Ayers

Reporter/Editor

Tom Ayers has been a reporter and editor for more than 30 years. He has spent the last 15 years covering Cape Breton and Nova Scotia stories. You can reach him at tom.ayers@cbc.ca.

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