Whereas the Canadian federal government has clearly stated its expectation that provincial cannabis tax revenue be shared with local governments and such revenues are currently being shared between the provinces and local governments in Ontario, Quebec, and Alberta, but not in British Columbia; And whereas the sharing of cannabis tax revenue will provide much needed funding for local governments: Therefore be it resolved that UBCM ask the Province to share up to 50 of provincial revenues generated from the production and sale of cannabis products with BC local governments.
Ministry of Finance The Province is committed to ensuring the ongoing transition to a legalized cannabis regime that aligns with this governments priorities to protect children and youth, promote health and safety, keep the criminal element out of cannabis production and retail activities, keep BC roads safe, and support economic development. Maintaining tax rates that generate only modest government revenue has been a key strategy in increasing the market share of legal cannabis producers and retailers. Cannabis revenue to the Province has been very modest, in part due to declines in the price of cannabis. It is difficult to make long-term revenue predictions about the potential for cannabis excise tax revenue while the legal market matures, cannabis producers continue to face challenges, and the market continues to stabilize. We will continue to monitor the state of the cannabis industry. The excise tax agreement was reached between federal and provincial governments did not touch on sharing cannabis excise tax revenue or other cannabis-related revenue with local governments. Where local governments incur costs associated with regulating cannabis in their communities they can directly derive revenue from the cannabis industry through licensing and other fees on cannabis producers and retailers to recoup those costs. The Province understands the funding needs facing local governments, and the impact of sharing cannabis revenue would be of modest benefit to municipalities. The Province has responded to local governments funding needs with much more substantial investments, such as the 1 billion Growing Communities Fund in 2023. The Province remains committed to working with communities to address funding needs, considering the diverse spectrum of costs and revenue tools. UBCM members endorsed a UBCM report entitled Ensuring Local Government Financial Resiliency Todays Recovery and Tomorrows New Economy, aimed at strengthening the municipal and regional district finance system in B.C. This report includes 20 recommendations to address the fiscal concerns of local government, including seeking new revenue sources. In January 2022, the Province signed an Memorandum of Understanding MOU with Union of BC Municipalities UBCM to guide the review of local government financial resiliency. A joint working group meets biweekly to address the recommendations and explore ways to strengthen local government fiscal health and cost pressures around attainable housing, community safety and climate change. Work to date has included discussions with local governments through UBCM and First Nations to address fiscal tools more broadly.