This page is dedicated to providing SUMA members and hometown residents with information on SUMA's advocacy work with the legalization of recreational cannabis. Here you will find links to resources, and media coverage of this issue.
At Convention 2019, SUMA members passed a resolution for SUMA to advocate the provincial government to immediately develop and implement a cannabis excise tax sharing agreement, in cooperation with SUMA and the Saskatchewan Association of Rural Municipalities.
On May 1, 2019, SUMA released the article "Hometowns Deserve Share of Cannabis Excise Tax." Saskatchewan's hometowns are also encouraged to send a letter to Saskatchewan's Minister of Finance advocating for a cannabis excise tax sharing agreement that would provide municipalities with 33 per cent of the total cannabis excise tax collected in the province.
Did the federal and provincial governments commit to sharing cannabis excise tax revenues with municipalities?
The Federal-Provincial-Territorial Agreement on Cannabis Taxation from December 2017 recognizes that meeting the objectives of legalization entails sustained cooperation between both orders of government and municipalities. It commits provinces and territories to work with municipalities according to shared responsibilities towards legalization.
The 2018 federal budget recognized the cannabis excise tax would be shared on a 75/25 basis, with 75 per cent of duties going to provincial and territorial governments and the remaining 25 per cent to the federal government. The budget states "it is the federal government's expectation that a substantial portion of the revenues from this tax room provided to provinces and territories will be transferred to municipalities and local communities, who are on the front lines of legalization." Federal Finance Minister Bill Morneau reiterated that commitment in a letter to SUMA, stating “The Government of Canada was willing to accept a smaller share of cannabis duty revenues to ensure that provinces and territories would have additional funds to provide to municipalities and local communities, including Indigenous communities, to address cannabis related responsibilities." Read the full letter.
Have other provinces agreed to share cannabis tax revenues with municipalities?
Ontario, Alberta, and Quebec have acknowledged that municipalities need help with the transition to legal recreational cannabis and are providing funding. The Ontario government is providing municipalities with $40 million over two years to help with the implementation costs of recreational cannabis legalization, and if the province's portion of duty over the first two years exceeds $100 million, the province will provide 50 per cent of the surplus to municipalities. The Municipal Cannabis Transition Program in Alberta, announced October 15, 2018, will provide $11.15 million over two years to the 52 Alberta municipalities that pay for their own policing. In Quebec, the 2018-19 budget announced $60 million over two years from the Cannabis Sales Revenue Fund to help municipalities cover the increased costs related to the sale of cannabis.
Municipalities were already responsible for policing, bylaw enforcement, and zoning. How are there additional costs with the legalization of cannabis?
As Saskatchewan's Minister of Finance Donna Harpauer recognized in a 2017 CBC article, one of the initial, upfront costs of cannabis legalization is policing. The Regina Police Service estimated that the added expense of policing with cannabis legalization would be between $1.2 million and $1.8 million. There are costs for additional or new training for drug recognition and roadside screening equipment, as well as ongoing investigation and disruption efforts of illegal production and distribution activities. The Regina Police Service estimated that the added expense of policing with cannabis legalization would be between $1.2 million and $1.8 million.While both excise tax revenues and the cost of enforcement have remained relatively low in the first six months of legalization, as more supply becomes available and product costs decrease, both costs and revenues will begin to climb. The Federation of Canadian Municipalities (FCM) calculated a preliminary range of annual costs related to cannabis legalization for municipalities to be between $3 million to $4.75 million per 500,000 residents, equating to $6 to $9.50 per resident.
How did FCM calculate the estimated costs?
FCM calculated the preliminary range of ongoing annual costs for municipal administration and local policing from available data using Canadian and U.S. examples. The estimate takes into account the costs of enforcement, and the need to develop and change municipal bylaws and planning. The figures were calculated from an urban context, and rural and remote per-capita costs may be higher due to the nature of the delivery of rural and remote policing in particular and geographical considerations in general.
Is SUMA proposing the cannabis excise tax revenue be shared with all municipalities, including rural municipalities?
At Convention 2019, SUMA members passed a resolution directing SUMA to advocate the provincial government to immediately develop and implement a cannabis excise tax sharing agreement, in cooperation with SUMA and the Saskatchewan Association of Rural Municipalities. Though only 60 permits were initially awarded to cannabis retailers, additional permits may be issued in the future. Securing a cannabis excise tax agreement that is fair in the beginning ensures that all municipalities receive revenue to cover the costs of cannabis legalization. The costs for enforcement also fall on all municipalities, including those under the provincial policing contract, as increases to what municipalities pay are tied to increases in the total contract for the province.
Cannabis legalization presents a tremendous challenge to hometowns across Saskatchewan, and across Canada. So the Federation of Canadian Municipalities (FCM), in partnership with SUMA, other provincial-territorial associations, and an advisory group of legal and policy experts, developed the Municipal Guide to Cannabis Legalization. A roadmap to cannabis legalization, the guide explores the issues that municipal governments need to consider, including case studies, policy options, and sample bylaw language.
On March 14, 2018, the Saskatchewan government released their cannabis framework. The framework details provincial plans to regulate cannabis, from the legal age of consumption to wholesale distribution and retail sales.
See SUMA's media engagement, and keep up with what SUMA and our members are saying in the media.
SUMA Op-ed (May 1, 2019): Hometowns Deserve Share of Cannabis Excise Tax
SUMA Media Release (April 16, 2018): SUMA, SARM, and FCM unveil Municipal Guide to Cannabis Legalization
SUMA Media Release (October 31): SUMA Calls on the Saskatchewan Government to Implement Cannabis Legalization Strategy
If you talk to the media about this issue, or submit a letter to the editor, email us with the details and we can share it here.
Letter to Minister Morgan from Regina City Councillor Andrew Stevens
SUMA, other municipal associations around the country, and some provincial governments are compiling and sharing information to help municipalities prepare for July 1, 2018. These resources may be helpful, and you can email us with suggestions for resources to add.
Urban Update (August 8, 2016): Have Your Say: Marijuana Legalization and Regulation
Urban Update (June 19, 2017): Have Your Say: Cannabis Legislation
Member email (September 27): Latest Round of Cannabis Consultation
Member email (November 9): SUMA Calling for a Provincial Cannabis Legalization Strategy
Forum d'experts sur l'encadrement du cannabis au Québec (Expert Forum on Cannabis Frameworks in Quebec)