Pubdate: Fri, 12 Jan 2018
Source: Niagara Falls Review, The (CN ON)
Copyright: 2018 Niagara Falls Review
Contact: http://www.niagarafallsreview.ca/letters
Website: http://www.niagarafallsreview.ca
Details: http://www.mapinc.org/media/2907
Author: Ray Spiteri
Page: A3

PROVINCE, CITIES PREPARING FOR COST OF CANNABIS STORES

Funding for pot shops needed after 'modest revenue' projections, says
finance minister

The province and municipalities will incur up-front incremental costs
as a result of the federal government's decision to legalize
recreational marijuana, says Ontario Finance Minister Charles Sousa.

In a recent letter to municipalities identified by the province to
host initial cannabis retail stores by July, including Niagara Falls,
Sousa said "it appears unlikely" there will be enough revenue to cover
the costs associated with legalization.

He said with the conclusion of the federal government's consultation
with provinces and territories on the tax framework, the Ontario
government has a better understanding of the revenue share to address
the costs of legalization.

"During those discussions, we negotiated for a greater share of
revenue on the basis that both the province and municipalities bear
incremental costs," said Sousa.

"We now look forward to engagement with municipalities on a reasonable
distribution of the province's share of the federal excise tax
revenue. Given the federal government's forecasts of modest revenue
and the Federation of Canadian Municipalities' estimated cost
projections, our engagement will need to acknowledge that it appears
unlikely there will be enough revenue to fully cover the incremental
municipal and provincial costs associated with legalization."

In the letter, which was included in Niagara Falls city council's
agenda this week, Sousa said the ministry will work with the
Association of Municipalities of Ontario and the City of Toronto to
launch an engagement process with municipalities on cannabis-related
funding.

This process, said Sousa, will consider what is known about
incremental municipal and provincial costs, and set out a proposed
approach to funding for municipalities that "supports our shared
policy objectives."

To help guide the engagement, Sousa's letter proposed three
principles.

"An approach to funding should acknowledge that the province and
municipalities will incur up-front incremental costs as a result of
the federal government's decision to legalize cannabis, and that a
funding approach should focus on helping to address these costs," he
said.

"An approach to funding should recognize the efforts of municipalities
in their areas of jurisdiction associated with the legalization of
cannabis. An approach to funding should align with the two-year term
agreed to between the federal, provincial and territorial governments
on the federal excise tax."

In late November, the province notified the City of Niagara Falls it
will receive at least one government-run pot shop when recreational
marijuana becomes legal in July.

The Liquor Control Board of Ontario will run new marijuana stores
through a subsidiary.

The province announced as many as 40 stores would open in 2018, with
40 more added a year later.

The province plans to set up approximately 150 standalone cannabis
stores by 2020.

The province said consumers will also be able to access cannabis
through an online retail website.

In his most recent letter, Sousa said Ontario continues to prepare for
federal legalization by moving ahead with "its safe and sensible"
framework to govern the lawful use and retail distribution of cannabis
as a "carefully controlled" substance within the province.

On Dec. 12, Ontario passed legislation that will regulate the lawful
use, sale and distribution of recreational cannabis by the federal
government's July deadline.

Sousa said the province remains committed to engaging with
municipalities on the process.

"Our objectives in the establishment of the retail and distribution
system for legal cannabis are to protect youth and eliminate the
illegal market," wrote Sousa.

"Municipalities are essential partners in the efforts to achieve these
goals."

He said during November and December, staff from the Ministry of
Finance and the LCBO met with staff of the municipalities identified
for the initial cannabis retail stores.

Sousa said these meetings provided "valuable" insights on provincial
guidelines and areas of local interests that will inform store siting.

In a prior letter to municipal leaders, he said Ontario's store
rollout will aim to achieve the right geographic distribution across
the province to reduce the number of illegal marijuana dispensaries
that have opened up since the federal government announced it will
legalize marijuana.

The public will also be notified about the proposed store locations,
and will be asked to provide feedback directly to the LCBO, said
Sousa, adding none of the retail stores will be located near sensitive
uses, such as schools.
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MAP posted-by: Matt