Alberta’s pot tax offer to Calgary falls $6.6M short of city’s costs: Report

Province giving calgary $3.8M under its Municipal Cannabis Transition Program

The City of Calgary says the provincial government isn't giving municipalities a fair share of tax dollars from cannabis sales.

The legalization of cannabis last year may have brought a new industry into Calgary, but the city is still claiming that the end to prohibition is hitting it hard in the other green stuff.

In an update on cannabis legalization going to the city’s Intergovernmental Affairs Committee, a report from city administration says legalization has cost Calgary at least $10.44 million, while the city’s share of pot tax revenue is only $3.84 million.

That pot tax money is being handed out via a provincial grant program called Municipal Cannabis Transition Program (MCTP).

The numbers are an estimate from April 1, 2018, to the end of this calendar year, but Matt Zabloski, the city’s project lead on cannabis legalization, said the cost to Calgary is probably higher than that.

“That $10.4 million is only the eligible costs for the grant,” he said. “So that doesn’t include specific training for things like drug recognition officers and standardized field sobriety testing either.”

Zabloski said the city has incurred the lion’s share of its costs in CPS and bylaw enforcement and upgrades, as well as planning and development costs.

He said the city also incurred costs before April 1, 2018 which aren’t eligible for the MCTP grant, such as legal leg work and consultation with citizens.

While the $10.8 million doesn’t represent the city’s entire bill, likewise the $3.8 million the city stands to receive from the province does not include other financial benefits the city has seen from increased business applications and development permits, but Zabloski said that number is small.

“As it stands, the remaining pieces would’ve been less than $200,000,” he said.

For its part, the province says it has brought in $31 million in tax revenue from the sale of cannabis as of its second quarter update.

In a written statement, Finance Minister Joe Ceci said the province understands that concerns remain about the costs of legalization for municipalities.

“We announced $11.5 million in funding to support municipalities,” said Ceci. “This funding is for two years and will give us the time to gain an understanding of the costs of enforcement. Our discussions with municipalities are ongoing and we will determine next steps with them as the situation evolves.”

But Zabloski said the city will continue to advocate for a greater share of those tax dollars.

He noted that contained within the same report is a breakdown of the number of legal cannabis stores open across the country. Calgary has 24 of the province’s 75 open cannabis retail stores. By comparison, Edmonton has only 11.

In fact, Calgary alone has more stores than any other province or territory except for Newfoundland and Labrador, which has 25 stores.

“We’ve certainly been putting resources into it,” said Zabloski. “We haven’t seen that kind of return in terms of acknowledgment from the other orders of government.”

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