Municipalities can tax cannabis growers at commercial rates in 2020

Aurora Cannabis, which has two Alberta growing facilities, called the property tax move “disappointing.” In a Wednesday statement, vice-president of …

Towns, counties and other municipalities will be allowed to charge cannabis growers commercial property tax rates in 2020, Alberta’s municipal affairs minister says.

Municipal Affairs Minister Kaycee Madu said Wednesday the move is common-sense regulatory change Alberta municipalities have been asking for. If mom-and-pop businesses can afford to pay non-residential tax rates, so can cannabis operations, he said.

“All that we are asking them to do is pay the same amount of tax as another business out there,” Madu told reporters Wednesday. “We have not imposed any undue burden on them.”

Previously, cannabis growing operations could be considered as farms in provincial regulations, which qualified them for a tax exemption. The loophole arose after the federal government legalized cannabis on Oct. 17, 2018.

Madu made the announcement at the fall convention of the Rural Municipalities of Alberta (RMA) in Edmonton.

RMA President Al Kemmere said Wednesday rural and urban municipalities have pushed for the change, as the sizeable new facilities put a strain on municipal services.

He said at least 24 Alberta municipalities are now hosting cannabis grow operations.

“This is about recognizing development is taking place, recognizing there’s a strain in the municipal sector because of it, and recognizing the fact that the other taxpayers within that municipality should not carry that solely for that industry,” he said.

B.C. and Saskatchewan have already made similar regulatory changes, he said.

The cost will depend on local property tax rates and how the local assessor calculates the value of the property, Kemmere said.

Neither Madu or Kemmere would estimate how much revenue the switch might net municipalities.

In a small county with facilities as large as one million square feet, the extra revenue could be a substantial boon, Kemmere said.

Other economic benefits

Cannabis growers were less enthused.

Troy Dezwart, co-founder and executive director of Freedom Cannabis, said municipalities need to consider other positive economic effects, such as innovation and job creation in construction and operations.

“I suppose I’m not surprised, with the economy being depressed as it is. These municipalities rely on tax revenues to properly manage resources and infrastructure,” Dezwart said Wednesday.

Freedom’s 126,000-square foot facility is just west of Edmonton in Parkland County, which last year reclassified the facility as light industrial from agricultural.

It’s important governments don’t overburden the new industry and stifle its growth, he said, pointing to federal excise taxes producers also pay.

Aurora Cannabis, which has two Alberta growing facilities, called the property tax move “disappointing.”

In a Wednesday statement, vice-president of communications Michelle Lefler said the Alberta company has created more than 2,000 jobs to date and invested more than $500 million in the province.

Rural policing on the agenda

Councillors from counties and municipal districts across Alberta are also set to discuss rural crime, reductions in provincial infrastructure funding and landowners rights, among other topics at this week’s convention.

On Wednesday, Edmonton Mayor Don Iveson told delegates municipalities shouldn’t have to raise property taxes to offset reductions in provincial funding.

Municipal councillors want the provincial government to reconsider a change in Bill 20, which is currently before the legislature, that cuts in half how much municipalities would reap in a revenue-sharing agreement.

Kemmere said Wednesday they’re willing to take a nine per cent hit in 2021 and 15 per cent hit in 2022 to provincial infrastructure funding, if they will see 100 per cent of the benefit when the economy purportedly turns around.

Kemmere said the province has also proposed linking a future cost-sharing model for rural police to property assessment values, which could disproportionately hit oil and gas operations.

If villages and counties are going to cover part of the cost of police, they’ll want more accountability for the service, Kemmere said.

jfrench@postmedia.com

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