Cannabis Tax Revenue Advocacy

As part of its work to secure a cannabis taxation revenue sharing agreement with the Province, UBCM has provided Finance Minister Carole James findings from its local government cannabis cost survey. UBCM President Arjun Singh and Vice-President Maja Tait delivered this information to the Minister as part of a recent meeting to discuss options for revenue sharing.

Results from UBCM’s survey clearly demonstrate that local governments are incurring substantial incremental costs associated with legalization. Extrapolated data shows that reported costs represent 31.2% of the Province’s most recent tax revenue projection. These findings are consistent with UBCM policy, through endorsed resolution 2018-SR1, which advances short- and long-term strategies for cannabis taxation revenue sharing in British Columbia.

The federal government has also requested that provinces transfer a portion of cannabis taxation to local governments. The two-year Federal-Provincial-Territorial Agreement on Cannabis Taxation, which expires later this year, was originally amended to provide provinces an extra 25% of excise tax revenue in recognition of costs and responsibilities assumed by local governments.

In recognition that provincial cannabis excise tax revenue will be lower than anticipated for the first two years of legalization, UBCM has expressed an interest in securing funding that will grow as provincial revenue grows. BC’s cannabis retail sector is slowly growing, and when combined with the emerging market for edibles, extracts and topicals, may realize significantly higher taxation revenue in the coming years.

To date, the Province has not made a commitment to share cannabis taxation revenue with local governments.

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