Facing increased expenses, cities seek one-third of pot revenue

Now the federal and provincial governments have reached a deal to split pot tax revenues, New Brunswick municipalities want to secure their share to offset looming costs.

Provinces will receive 75 per cent of tax revenues once cannabis is legalized next July, according to the agreement announced Monday.

Fredericton Coun. Dan Keenan said Tuesday the next step is to strike a deal between the province and municipalities. He spoke with Information Morning Fredericton after council passed a 2018 city budget that includes rate and fee hikes.

We're actively and consistently sending the message that we need to be at the table right now.- Charline McCoy, Cities of New Brunswick Association

Keenan said the city faces higher expenses once cannabis sales are rolled out, though he's unclear on what the amount will be.

A spike in policing costs is expected, he said.

"Many of those costs are going to be borne at the municipal level," Keenan said.

"That's the next step for us — that we have to ensure through the cities association and municipal association that the municipalities receive a fair share of that tax revenue to be able to offset some of the additional costs that we will incur."

The federal portion of tax revenues will be capped at $100 million of the projected $400 million in annual tax revenue. Anything above that level would be shared by the provinces and territories.

A three-way split

Charline McCoy, acting executive director of the Cities of New Brunswick Association, said Tuesday the group wants a  split of total revenues into equal thirds.

She said 33.3 per cent is fair for the downloading of services to municipalities on an ongoing basis.

McCoy also said it's time to negotiate a deal with the provincial government. The association has yet to receive a formal invitation to the bargaining table, she said.

"We're actively and consistently sending the message that we need to be at the table right now on sharing of revenue and also other things associated with cannabis legalization and we're going to keep pushing until we're invited."

The association is working on expense projections to bring to the province.

The provincial government did not immediately respond to an interview request Tuesday afternoon.