UBCM Principles for Cannabis Taxation

The UBCM Executive, at its February 23, 2018 meeting, endorsed a principled approach to cannabis excise tax revenue sharing. In the absence of fulsome data, UBCM’s four principles seek to ensure that BC’s share of cannabis excise tax revenue addresses all local government costs associated with legalization, with remaining funds shared between the Province and BC local governments.

Derived primarily from the work of the Joint Provincial-Local Government Committee on Cannabis Regulation and established UBCM policy (i.e. endorsed resolutions), UBCM has established the following four principles:

  1. Cannabis legalization should not result in additional local government funding by property taxpayers
  2. Local governments should be reimbursed for costs associated with the implementation of legalized cannabis.
  3. Local governments should be reimbursed for any additional policing costs resulting from cannabis legalization.
  4. Remaining excise tax revenue (after taking out expenses incurred as part of principles 1-3 and the federal share) should be shared between the Province of BC and local governments.

It is generally accepted that local government services will be greatly impacted by the legalization of non-medical cannabis. Areas such as policing, bylaw enforcement, land use, public health, business licensing, education, and public consultation have the potential to increase local budgets. Of these costs, law enforcement is arguably the most costly line item on a local government’s budget. UBCM’s principles look to address these costs, while also trying to ensure that any remaining taxation revenue will be shared between the Province and BC local governments.  

Through endorsed resolutions 2017-SR1, 2016-A3, and 2016-A2, UBCM’s membership has placed a high priority on cost recovery and equitable sharing of taxation revenue. However, at this point there is a lack of reliable data, and with a provincial framework that continues to evolve, UBCM has taken a principled approach to cannabis taxation revenue sharing.

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