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BC Cities Want Their Tax Revenue

Cities in British Columbia’s Lower Mainland are calling on the provincial government to distribute what they say is their share of cannabis revenue.

The resolution is being brought forward at the 2023 Convention of Union of BC Municipalities (UBCM) taking place this week.

Cannabis Taxation Revenue Sharing

Under the Federal-Provincial-Territorial Agreement on Cannabis Taxation, the federal government retains 25% of excise tax revenue, with the remaining 75% or more going to provinces and territories.

In developing its revenue sharing framework, the federal government agreed to increase the provincial share of cannabis excise tax revenue by 25% in recognition of the costs and responsibilities that would be assumed by local governments. The federal expectation was that a portion of provincial cannabis taxation revenue be shared with local governments.

Some provinces, including Ontario, Quebec, and Alberta, have agreed to share a portion of cannabis revenue with local governments. The Province of British Columbia still has not committed to a revenue sharing agreement and has not shared any of its cannabis taxation revenue with local governments at this time.

BC Earned $46M in Tax Revenue

There are several taxes applied to cannabis sold in BC, including the federal excise tax, PST, GST, and a 15% provincial mark-up on the landed cost of cannabis. In 2020-21, the Province earned over $46 million in cannabis tax revenue.

A 2019 study by UBCM found that local governments were absorbing significant one-time and ongoing costs related to cannabis legalization.

The federal revenue sharing agreement has now expired, but provinces and territories continue to receive their share of excise tax revenue. It is unknown when a new agreement will be reached.

Share 50% with Local Governments

In a resolution presented at the 2023 Convention, UBCM is calling on the Province to share up to 50% of provincial revenues generated from the production and sale of cannabis products with BC local governments.

The organization says the sharing of cannabis tax revenue will provide much needed funding for local governments.

Tags: Canada Cannabis (138), cannabis excise tax (3), cannabis regulation (10), Cannabis Retail (413), excise tax (8), municipalities sharing tax revenue (2), Union of BC Municipalities (2)