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Provincial cannabis cash is a bad deal for municipalities

October 15, 2018

Provincial cannabis cash is a bad deal for municipalities

New provincial grant program underfunds cities, offers nothing to communities under 5,000

Edmonton - Albertans are on the hook to cover the cost of cannabis legalization in their community.  According to the Municipal Cannabis Transition Program (MCTP) announced today, over 215 urban municipalities will be forced to cover legalization costs on their own while only 52 towns, cities and urban service areas will receive minimal funding.

“We are extremely disappointed with this announcement,” says Alberta Urban Municipalities Association President Barry Morishita. “Hundreds of Alberta communities are being forced to choose between hiking property taxes or putting public safety at risk and that is unacceptable. This ongoing lack of meaningful consultation from the provincial government has resulted in the province not fully comprehending the impact cannabis legalization will have across Alberta.”

AUMA has been advocating for municipalities to receive a fair share of the province’s excise tax revenues as part of a “user pay” model to cover the costs associated with legalization. Municipalities are tasked with community education and enforcement, including responding to complaints of consumption in prohibited areas. These costs will be paid out of municipal budgets, instead of from the taxes collected from cannabis sales.

Under the new MCTP, eligible expenses include municipal administration costs directly related to cannabis legalization including land use bylaws and permitting; education and marketing regarding local rules for cannabis consumption; and administrative and enforcement staffing costs. These are expenses that municipalities of all sizes have and will continue to incur, but only a limited number of municipalities are eligible to apply for funding under the program – and only if they meet the criteria.

“Throughout the legalization process, AUMA has attempted to work in good faith with the province,” said Morishita. “The federal government did not agree to give the provinces a larger share of the excise tax only for the province to not equitably distribute to the municipalities that need it. Going forward, AUMA will continue to advocate for municipalities dealing with the impending costs of cannabis legalization and will ask the federal government to explore options including potentially withholding the province’s portion of the excise tax until the provincial government comes back to the table to ensure our communities remain safe.”


About the AUMA

Founded in 1905, the Alberta Urban Municipalities Association represents more than 260 of Alberta’s urban municipalities, including cities, towns, villages, summer villages and specialized municipalities. Our goal is to develop a strong partnership between all three levels of government through a shared vision, with long‐term planning that facilitates social and economic growth, a strategic and stable funding matrix for capital projects, vital emergency and social services, and implementation and coordination in the delivery of services to ensure the long‐term sustainability of Alberta’s municipalities.

For more information:
Jackie Sargent, SCMP
Communications Advisor, AUMA