Sask. finance minister says legal weed too pricey

Saskatchewan’s finance minister thinks the price of legal weed is too high.

Donna Harpauer made the comments while discussing a recent push by the Saskatchewan Urban Municipalities Association (SUMA) to revisit the way cities, the province and the federal government split the pot of cannabis excise taxes. Municipalities say they aren’t getting their fair share.

Harpauer agreed there’s a need to take another look at the tax, but for a completely different reason.

“I don’t think it is going to eliminate the black market as intended, because the price is too high,” she said. “So I think the whole thing needs to be revisited, in which case this excise tax might be too much.”

Street prices for cannabis were $7.05 per gram in Saskatchewan as of 2017, according to Statistics Canada. The cheapest price currently available at the Vatic cannabis store east of Regina is $11.99 for a gram of “Moonbeam,” according to its website, and many varieties are far more expensive.

Harpauer didn’t say precisely how much the price should be reduced. She merely suggested that the spread between legal and illegal weed might need to be narrowed to discourage black market sales.

Some of that Moonbeam money goes to pay the excise tax, which was set at the higher of $1 per gram or 10 per cent of purchase price. The federal government takes a quarter of the revenue haul, leaving the rest to the provinces.

SUMA president Gordon Barnhart noted Ottawa always expected the provinces to share their take with municipalities. The 2018 federal budget said as much, noting municipalities are on “the front lines of legalization.” Barnhart stressed that cities with police forces have to spend more money on equipment and training for roadside enforcement, while costs for zoning and bylaw enforcement are also a concern.

That’s why he has kept crusading for a piece of the tax revenues. He recently met with Harpauer and Saskatchewan Party MLAs to make his case. Nearly 50 of SUMA’s members sent letters over the past month as part of the campaign, including the City of Regina. But they’ve met with little success.

“The province has said, ‘Well, it’s such a small amount, it’s not worth bothering with,’” said Barnhart on Monday. “We’re making the argument that a percentage is a percentage. If it’s $1,000 or $10 million, whatever it may be, 25 per cent or 33 per cent of that should be coming to the municipalities.”

Harpauer reiterated her argument to the Leader-Post, saying the money would be a pittance. Revenue for last fiscal year is estimated at $915,000, with $3.42 million anticipated for 2019-20. Divvied up between all of Saskatchewan’s municipalities, that would come to $300 and $1,100, respectively.

“I cannot think that it is time well spent to negotiate how we break out such a small amount of money and do all the administration on it,” she said, stressing that the province already supports municipalities through a generous revenue sharing framework.

She questioned whether cannabis-related costs for municipalities have been as high as anticipated, and called on municipalities to provide evidence to the back up their case. She said no one has come forward with specifics.

But Barnhart said municipalities were never expected to show their receipts. Instead, he’s taking SUMA’s case straight to the federal government. At the recent Federation of Canadian Municipalities conference in Quebec City, Barnhart and other SUMA officials made their arguments to federal Rural Economic Development Minister Bernadette Jordan.

“We were explaining to them how it isn’t working at the moment, that we’re not getting any revenue sharing at all on excise tax, and we’re open to working out some solutions, either through the province or from the federal government,” Barnhart said.

He noted the current federal-provincial deal expires in December. He wants Ottawa to consider a transfer that doesn’t flow through the province. According to Barnhart, Prime Minister Justin Trudeau talked about a “direct relationship with municipalities” during his remarks to the conference.

“They’ve openly floated the idea of having a direct payment from the federal (government) to the municipalities,” said Barnhart.

Harpauer said municipalities are certainly free to pursue that option. But she pivoted to her suggestion that the pot might need to shrink anyway, to bring down the price.

Regina Mayor Michael Fougere agreed with Barnhart that it’s “only fair and reasonable” for cities to get their share of the money.

He said he’s not convinced by Harpauer’s argument that the revenues are too measly to matter. He’s anticipating more money, not less.

“As legalization continues to go forward, there might be more revenue going forward, too,” he suggested.

Both Fougere and Barnhart said their immediate plan is to keep lobbying the province, no matter how long it takes.

“Advocacy is not a sprint; it’s a long-term game. It’s a marathon,” Barnhart said. “We’ll just keep pressuring the government.”

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