Back in 2004, our prime minister Paul Martin promised municipalities a share of the federal gas tax as part of the “New Deal for Cities”. Less than a year later, with the passage of Budget 2015, that promise was kept and the Federal Gas Tax Fund was born.
It looks easy and fast on the surface, one year a promise is made, the next year it is law. The federal government has provided funding for municipal projects since the Great Depression, for specific projects. Stable, consistent, ongoing funding like what was proposed by Paul Martin when he became prime minister, was a result of the Prime Minister’s Caucus Task Force on Urban Issues that led to the development of what is now Infrastructure Canada. Although this was welcome news for municipalities, the federal government had been taxing fuel for decades and the municipalities had to go to the federal government with cap in hand for years until this was done. When Canada enjoyed yearly budget surpluses of many billions of dollars, “giving” municipalities a few cents of the gas tax was possible, good policy and good politics.
It’s time to start thinking about a very similar model for how cannabis taxation will work, entrenching a municipal cannabis tax in the federal legislation and establishing a Federal Cannabis Tax Fund to help municipalities pay for infrastructure. Adult use cannabis legalization is coming, it’s not a question of if, just a matter of when and then how Provinces will regulate the distribution when it happens.
The problem with establishing a Federal Cannabis Tax Fund is that somebody needs to ask for it, now, before the legislation is drafted. Mayors and councils across Canada may be reluctant to raise this publicly while marijuana is still illegal and because there is no formal recognition of municipal governments in our constitution, it may fall on our premiers to ask on behalf of our cities.
So let me get the ball rolling here with the following;
To the premiers of Canada, please consider asking the federal government to include municipalities in the cannabis taxation equation by establishing a Federal Cannabis Tax Fund that helps pay for Infrastructure.
To the mayors and councils of Canadian municipalities, please consider endorsing the establishment of a Federal Cannabis Tax Fund and asking your Premier to endorse it.
The question is no longer whether you support or oppose the legalization of marijuana. A regulated system will prevent easy access of marijuana to children and adolescents, deprive organized crime of a big source of revenue and save our police and criminal justice systems hundreds of millions of dollars. It will also provide us with a new source of tax revenue.
The question now is how to ensure municipalities and their property taxpaying base across Canada get a fair share of that tax.
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