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Edmonton city council votes to raise property taxes to finance cannabis legalization, blaming provincial government for lack of commitment
EDMONTON — Talk about a buzz kill.
Edmonton’s city council voted Tuesday to raise property taxes as part of its plan to cover cannabis legalization costs.
Mayor Don Iveson said the city had no choice, as the province has not committed to sharing any of its tax revenue with municipalities.
“I haven’t given up hope that we’ll get a resolution, but it’s frustrating. And property taxpayers should be frustrated that, for the time being anyway, we’re on the hook,” Iveson said.
Council had previously pegged the 2018 property tax increase at 3.2 per cent, but that went up to 3.5 per cent after adding costs for cannabis and several other items Tuesday.
Neighbourhood renewal and LRT eat up the bulk of the overall increase.
The federal government announced in December 2017 that 75 per cent of tax revenues from marijuana sales will go to provinces, with the expectation that a large portion will go to municipalities.
Federal tax revenues will be capped at $100 million a year, and anything above that will also go to the provinces.
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That covers $1.43 million for police, $772,000 for bylaws, $689,000 for development services, and additional costs for citizen services, transit, fire rescue, social development, communications and regional economic development.
Council voted to take almost $2.6 million out of its financial stabilization reserve to cover one-time costs, and $1.7 million out of the property tax levy.
Iveson said Canada’s big-city mayors have been vocal about needing a revenue-sharing guarantee from provinces for the past year. And it’s difficult to work with the Alberta government while Iveson and Calgary Mayor Naheed Nenshi are still waiting for that commitment.
“It’s hard for us to have a mature government-to-government relationship without an answer to this question,” Iveson said.
Coun. Ben Henderson said the city is more than happy to implement legalization, but the city shouldn’t be burdened by the cost.
“It’s very frustrating that we’re not seeing that money, and that we’re having to make these choices with no support or help whatsoever,” he said.
Police, who are getting the biggest chunk of the cannabis dollars, say the $1.43 million will cover one-time funding for equipment and training on how to recognize drug impairment.
Edmonton Police Service director of finance Robert Davidson said weed-related policing costs will likely change for the police in the future.
“Based on what we know today it seems to address the risks we have,” Davidson said. “However, with the changing legislation, changing environment, we don’t know how that’ll be impacted going forward. It could mean more, it could mean less.”
Mike Brown, spokesperson for Alberta Finance Minister Joe Ceci, said in a written statement that the province will bear the biggest cost around legalization in terms of enforcement, regulation and education.
He said provincial officials will sit down with municipal governments when they have more clarity on federal funding.
“We require additional information from the federal government, but will continue conversations with municipalities on this issue,” Brown wrote. “It’s important to note that we do not anticipate a net gain in revenue of legal cannabis for the first couple years.”
Edmonton city council votes to raise property taxes to finance cannabis legalization, blaming provincial government for lack of commitment
EDMONTON — Talk about a buzz kill.
Edmonton’s city council voted Tuesday to raise property taxes as part of its plan to cover cannabis legalization costs.
Mayor Don Iveson said the city had no choice, as the province has not committed to sharing any of its tax revenue with municipalities.
“I haven’t given up hope that we’ll get a resolution, but it’s frustrating. And property taxpayers should be frustrated that, for the time being anyway, we’re on the hook,” Iveson said.
Council had previously pegged the 2018 property tax increase at 3.2 per cent, but that went up to 3.5 per cent after adding costs for cannabis and several other items Tuesday.
Neighbourhood renewal and LRT eat up the bulk of the overall increase.
The federal government announced in December 2017 that 75 per cent of tax revenues from marijuana sales will go to provinces, with the expectation that a large portion will go to municipalities.
Federal tax revenues will be capped at $100 million a year, and anything above that will also go to the provinces.
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That covers $1.43 million for police, $772,000 for bylaws, $689,000 for development services, and additional costs for citizen services, transit, fire rescue, social development, communications and regional economic development.
Council voted to take almost $2.6 million out of its financial stabilization reserve to cover one-time costs, and $1.7 million out of the property tax levy.
Iveson said Canada’s big-city mayors have been vocal about needing a revenue-sharing guarantee from provinces for the past year. And it’s difficult to work with the Alberta government while Iveson and Calgary Mayor Naheed Nenshi are still waiting for that commitment.
“It’s hard for us to have a mature government-to-government relationship without an answer to this question,” Iveson said.
Coun. Ben Henderson said the city is more than happy to implement legalization, but the city shouldn’t be burdened by the cost.
“It’s very frustrating that we’re not seeing that money, and that we’re having to make these choices with no support or help whatsoever,” he said.
Police, who are getting the biggest chunk of the cannabis dollars, say the $1.43 million will cover one-time funding for equipment and training on how to recognize drug impairment.
Edmonton Police Service director of finance Robert Davidson said weed-related policing costs will likely change for the police in the future.
“Based on what we know today it seems to address the risks we have,” Davidson said. “However, with the changing legislation, changing environment, we don’t know how that’ll be impacted going forward. It could mean more, it could mean less.”
Mike Brown, spokesperson for Alberta Finance Minister Joe Ceci, said in a written statement that the province will bear the biggest cost around legalization in terms of enforcement, regulation and education.
He said provincial officials will sit down with municipal governments when they have more clarity on federal funding.
“We require additional information from the federal government, but will continue conversations with municipalities on this issue,” Brown wrote. “It’s important to note that we do not anticipate a net gain in revenue of legal cannabis for the first couple years.”
