Excise Tax Law

SUMA is once more urging members to get a much bigger share of the hashish tax

June 13, 2021

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SUMA says that getting a share of cannabis excise tax through municipal revenue sharing is not enough to compensate members who have incurred higher legalization costs.

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Jennifer Ackermann A cannabis plant is seen in the Western Cannabis greenhouse in Regina on May 17, 2021. BRANDON HARDER / Regina Leader-PostA 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 communities says it is time to relight the fire for a bigger share of the cannabis excise tax.

“We haven’t given up on this fight,” said Rodger Hayward, president of the Saskatchewan Urban Municipalities Association (SUMA). “We will continue to talk to the government about this.”

SUMA pushed for changes in the distribution of cannabis excise taxes across cities, provinces, and the federal government in the early days of legalization, saying communities would not get their fair share. Hayward says that feeling hasn’t changed, but members now have a better idea of ​​what legalization has and continues to cost.

“These discussions need to be repeated with the government,” said Hayward. “We had a little more time so I think everyone now has better numbers and better information to work with and hopefully we can find a compromise.”

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But the state government’s position on this issue has not changed either. In an email statement received in the Leader Post on Thursday, the government referred to its formula for sharing municipal revenue.

“This formula is stable and predictable and offers unconditional funding to local authorities. PST from cannabis is shared with communities through the formula, ”the statement said.

Excise tax is paid by licensed cannabis producers when they purchase their products: the federal government keeps 25 percent of the money up to $ 100 million a year. The remaining 75 percent go to provinces and territories, which have the opportunity to pass them on to the municipalities.

According to a report on cannabis by the City of Regina last week, the Federation of Canadian Municipalities (FCM) solicited the federal government for a share of cannabis tax revenue for local governments. When asked for comment, the FCM said it was “unable to provide an update on the matter”.

Regina’s mayor Sandra Masters also declined to comment.

In Saskatchewan, total cannabis sales were about $ 38 million in 2018-19 and nearly doubled to about $ 70 million in 2019-20. Final numbers for 2020-21 were not available at the time of writing, but the government reported sales of $ 91.8 million from April 1 to December 31, 2020. Those numbers include excise taxes, however without sales tax.

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The provincial government does not track the six percent PST by sector, so all cannabis tax revenue is unavailable, the report said. For 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 on some of the excise revenue.

Hayward said he was unsure of the amount of the excise tax passed on through revenue sharing, but said it was small and felt it should be distributed separately to allow communities to pay more of the legalization costs received a larger share to cover these costs.

“Very small villages may not have had to do anything to adapt their statutes to include cannabis stores, while cities and towns have had to work quite a bit,” he said.

He said he did not expect to get a meeting with the provincial government to continue the conversation.

– with files from Arthur White-Crummey

jackerman@postmedia.com

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