Alberta finance minister standing firm on cannabis cost-sharing program

Finance Minister Joe Ceci said Tuesday he can't share money he doesn't have to help cities and towns cover the extra costs of cannabis legalization.

On Monday, Ceci announced the government will provide $11.2 million in grants over two years to help municipalities with more than 5,000 residents cover costs associated with legal pot. Smaller municipalities won't qualify for grants because the province covers their policing costs.

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The sale and use of recreational cannabis will be legal in Canada as of Wednesday.

Municipalities have complained they are unfairly burdened with the costs of legalization. They slammed Ceci's plan as insufficient. 

Edmonton Mayor Don Iveson called the grant program "unacceptable." The city estimated it will need an extra $4.3 million this year alone to cover the costs of police training and equipment, more bylaw officers and rezoning for cannabis stores.

Ceci told reporters Tuesday the province will lose money over the first two years of legalization.

"Sharing monies that I don't have is a problem," he said at the legislature. 

Any revenue from excise taxes won't come until at least the third year so mayors and reeves shouldn't expect additional help until then, he said.

Alberta based its grant program on what was done in Ontario and Quebec, the other Canadian provinces to share costs with municipalities.

Alberta's losses are estimated at $43 million in the first year of legal cannabis and $47 million in the second, Ceci said.  

He said the province needed to spend money on a new regulatory system, staff, a website for online sales and warehouse space.

A two-year deal with the federal government reached late last year gives provinces 75 per cent of the tax collected on cannabis sales.