Portion of tax revenue sought to cover expected regulations, enforcement costs

Several city councillors hope the city can get a share of tax revenue from sales of legal marijuana next year.
This is fair, says Coun. Julian Morse, because the city will be on the hook to pay for regulatory and enforcement costs.

Several councillors, shown during a presentation Tuesday on a homelessness plan, argue the city ought to get a share of tax revenue from the sale of marijuana to pay for added regulatory and enforcement costs. Shane Magee/NNSL photo

“I fully expect the federal government to distribute tax revenues accordingly to account for this new burden on our resources,” he stated in an e-mail to Yellowknifer.
The municipal burden could include establishing and enforcing new zoning bylaws, bylaws to set out where people can smoke marijuana publicly, limits on personal cultivation and possession and public nuisance complaints, according to a federal government website.
Morse was responding to a series of questions Yellowknifer asked council and the mayor on legalization and how they believe it could work in the city.
Bill C-45, the Cannabis Act, introduced by the federal Liberal government April 13, didn’t cover how marijuana will be taxed. That’s expected to be revealed later.
The legislation, which still needs to pass through Parliament before becoming law, would legalize the sale of marijuana for recreational use.
The legislation leaves details of sales and distribution to provinces and territories, which will each have to draft new laws, bylaws and regulations. What sales and distribution will look like in the Northwest Territories remains murky.
Those still-to-be set rules would guide whether marijuana could be sold at a liquor store, drug store, the grocery store or other retail outlets.
There has been no indication from the GNWT how it may proceed and its unclear when there will be more information about its stance. The premier and justice minister have declined to comment so far.
Without guidance, the city is largely left to wait.
“We’ll need to see what the GNWT proposes in terms of their own legislation and regulations before determining how it fits in with our legal framework,” Mayor Mark Heyck stated.
The mayor stated council hasn’t given a strong desire to lobby the GNWT on its pending legislation, through that could change once there are more details, Heyck stated.
The federal legislation is expected to take effect July 1 next year, giving the territory and other levels of government just over a year to get rules in place.
As with alcohol and tobacco, the city doesn’t have the legal authority to tax marijuana so the only revenue from the change in the law would perhaps be through business license fees charged by the city, Heyck stated.
The city is in the midst of reviewing its business bylaw and Coun. Niels Konge has floated the idea of a substantial fee for businesses selling alcohol or marijuana.
Konge suggested using the money for social programs, a view echoed by Coun. Linda Bussey.
“Some of the tax revenue generated from marijuana sales should be used to fund prevention programming aimed specifically at youth and enforcement of safe driving standards,” she stated.
In terms of where marijuana should be sold, Bussey believes it should be at specialty outlets, not liquor stores or drug stores, as some provinces have considered.
Konge’s vision appears to be similar to Bussey’s.
“Only licensed dispensaries should be allowed to sell,” he stated. “That is the only way I see the city getting any revenue directly from marijuana.”
Changing sales and distribution from a criminal activity into a legal activity could be an economic opportunity for the city and territory by allowing entrepreneurs to open new small businesses or even get into larger-scale production and distribution, Morse stated.
“I want to ensure that we get any necessary legislation in place in a timely manner to ensure anyone who wants to capitalize on this opportunity can do so,” Morse stated. “As a small jurisdiction, I think we have an opportunity here to be innovative and progressive, and ensure we maximize the positive benefits of cannabis legalization for our citizens.”
Councillors and the mayor ducked a question about whether they have ever smoked marijuana.