SUMA to restart push for members to get greater share of hashish tax

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SUMA says getting a share of the cannabis excise tax through municipal revenue sharing isn’t enough to compensate members who have incurred higher costs of legalization.

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Jennifer Ackerman A cannabis plant is seen in the Western Cannabis greenhouse in Regina on May 17, 2021. BRANDON HARDER/ Regina Leader-Post Photo by BRANDON HARDER /Regina Leader-Post

The organization that represents Saskatchewan’s urban municipalities says it’s time to relight the fire in its efforts to get a bigger share of the cannabis excise tax.

“We haven’t given up that fight,” said Rodger Hayward, president of the Saskatchewan Urban Municipalities Association (SUMA). “We’re going to keep talking to the government about it.”

SUMA pushed for changes to how cities, the province and the federal government split the pot of cannabis excise taxes in the early days of legalization, saying municipalities weren’t getting their fair share. Hayward says that feeling hasn’t change, but members now have a better idea of what legalization has cost and continues to cost.

“Those discussions need to happen again with the government,” said Hayward. “We’ve had some more time go by so I think everybody’s got some better numbers and better information to work with now and hopefully we can arrive at some sort of compromise.”

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But the provincial government’s stance on the issue hasn’t changed either. In an emailed statement received by the Leader-Post on Thursday, the government pointed to its Municipal Revenue Sharing formula.

“This Formula is stable and predictable and provides unconditional funding to municipalities. PST from cannabis will be shared, through the formula, with municipalities,” said the statement.

The excise tax is paid by licensed cannabis producers when their products are purchased: the federal government keeps 25 per cent of the money up to $100 million a year. The remaining 75 per cent is given to provinces and territories, which have the option to pass it along to municipalities.

The Federation of Canadian Municipalities (FCM) has been lobbying the federal government for a share of the cannabis tax revenue for local governments, according to a City of Regina report on cannabis released last week. When approached for comment, the FCM said it was “unable to provide on update on this topic.”

Regina Mayor Sandra Masters also declined to comment.

In Saskatchewan, total cannabis sales in 2018-19 were approximately $38 million, almost doubling to approximately $70 million in 2019-20. Final numbers for the 2020-21 year were not available at the time of writing the report, but the government reported sales of $91.8 million from April 1 to Dec. 31, 2020. These figures include the excise duty but exclude sales taxes.

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The provincial government does not track the six per cent PST by sector so total tax cannabis revenues are not available, says the report. For the excise tax, Saskatchewan received $1.8 million in 2018-19, $7.6 million in 2019-20, and the estimate for 2020-21 is $13.5 million.

According to the report, only Alberta, Ontario and Quebec have started passing along a portion of the excise tax revenue.

Hayward said he isn’t sure the exact amount of the excise tax that’s being passed down through revenue sharing, but said it is small and feels it should be distributed separately so that municipalities that have incurred more of the cost of legalization get a bigger share to cover those costs.

“Very small villages may not have had to do anything to align their bylaws to accommodate cannabis stores, where as towns and cities have had to do quite a bit of work on it,” he said.

He said he doesn’t anticipate having any trouble getting a meeting with the provincial government to continue the conversation.

— with files from Arthur White-Crummey

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