Ontario cities irked as marijuana legalization plans roll out

There may be as much as a billion dollars in tax revenue at stake as Canada readies for legalized marijuana next summer.

The cut for cities? So far, zero.

Municipalities may be left in the cold when it comes to sharing in the cash from legalized pot sales, with the federal government proposing a 10 per cent excise tax – or $1 per gram, whichever is higher – to be split evenly between the provinces and the feds.

Little has been said about how many, if any, tax dollars will flow to cities bearing the burden of costsassociated with policing, licensing and enforcement of legal marijuana sales.

Southwestern Ontario leaders are none too pleased.

“Municipalities aren’t even in the equation. It’s this patronizing approach that the provinces take,” Sarnia Mayor Mike Bradley said Monday. “They pass out the gruel when they want to.”

He’s frustrated that municipalities weren't even mentioned in the federal government’s plan for marijuana taxation, announced on Friday.

“We’ve got all the issues in implementation. We’re the ones that have to deal with the immediate impact in the community,” he said.

An excise tax, linked to certain goods like gasoline, would be added to pot prices before sales tax. That means a gram of marijuana that costs $8 to produce would sell for $9 plus HST in Ontario. In total, that gram would cost $10.17 with excise and sales tax.

Liberal MP and former Toronto police chief Bill Blair, who's been tasked with helming the government's pot plans, told reporters that the total revenue, including excise duty and sales tax, could be as high as $1 billion.

The Association of Municipalities of Ontario is advocating for cities and towns to get their fair share.

"We’re going to see the brunt of the work in (legalization). So we’re telling both levels of government that we’re going to be needing some resources to go with the responsibility we’re going to be given," Lynn Dollin, president of AMO, told The Free Press Monday.

Liberal MP Peter Fragiskatos (London North Centre) hit back against the criticism, saying the federal government is paying attention to the needs of municipalities.

“We are actively listening,” he said. “We are not ignoring the concerns of cities.”

It’s much too soon to be ringing alarm bells, Fragiskatos said, pointing out that Friday’s announcement kicked off a month-long consultation period on the proposed tax plan. Provincial and federal finance ministers are slated to meet in the nation’s capital after consultation closes Dec. 7.

For southwestern Ontario mayors like Bradley, the frustration lies in the unknown.

“We’re in a cloud of smoke right now trying to figure out what’s going to happen,” he said.

MARIJUANA LEGALIZATION

  • Marijuana set to become legal July 1, 2018.
  • Must be 19 years old to buy, use or grow marijuana.
  • To start, marijuana to be rolled out at 40 stores in Ontario run by the Liquor Control Board of Ontario, including one in London.
  • Can't use marijuana in public places, at the office, or in vehicles.
  • Proposed excise tax would add $1 per gram of marijuana or 10 per cent of producer’s sales price; sales tax calculated on top of that.

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