Pubdate: Tue, 12 Dec 2017
Source: Calgary Herald (CN AB)
Copyright: 2017 Postmedia Network
Author: Rob Breakenridge
Page: A9


Certain cannabis crimes ... will vanish altogether, thus resulting in
less enforcement.

The city's claims that cannabis legalization is going to be a big
money loser for them should certainly not be taken with a grain of
salt, but rather, a few kilos of it.

Or, to put it another way, what are they smoking down at city

A council committee last week heard the details on administration's
latest estimates around the cost of legalization: about $10 million or
so a year, or about the equivalent of a one per cent increase in
property taxes.

For those who don't smoke weed and don't plan to start, that's
unlikely to go over well.

And, of course, the answer to all of this - at least according to
Mayor Naheed Nenshi - is for the province and the feds to hand over a
big chunk of the cannabis-related taxes they'll be collecting.

Mind you, given that the city has been looking at ways of saving
money, it shouldn't surprise us that they'd love to have a few million
dollars land in their lap. A less urgent tone probably reduces the
likelihood of that happening.

The city claims that their figures include increased costs for
policing, bylaws and administration. Nenshi insists that they haven't
"padded this number" - that it's legit and it's - in his words - a
"very big deal."

The rest of us should be skeptical, however. First of all, this would
imply that there are similar costs around alcohol: policing around
bars and nightclubs, zoning regulations, etc. The city does not
receive a cut of the provincial liquor markup or the federal alcohol
excise tax, nor have they made a big show of demanding such a thing.
That's telling.

But the claims deserve even more scrutiny. For example, what new
policing costs would the city anticipate come next year? Anything
cannabis-related that will still be illegal after July 1, 2018 - like
cannabis-impaired driving, giving or selling pot to kids, or running
an illegal grow op - is illegal right now. Conversely, though, there
are certain cannabis crimes that will vanish altogether, thus
resulting in less enforcement.

Prohibition has been a costly enterprise, and freeing up police and
court resources is, in fact, a powerful argument for not punishing
consenting adults for possessing or using cannabis.

Furthermore, as I'm sure any business owner in Calgary would tell you,
the city is not in the habit of doing things for free. Any sort of
required licensing or inspection inevitably entails fees. That will be
no different for these new cannabis retail outlets.

And perhaps this is the biggest factor being overlooked. There are,
for example, upwards of 400 liquor stores in Calgary. It's unlikely
that the number of cannabis retail outlets will approach that amount,
but at a minimum, we're talking about a sudden injection of dozens of
new businesses into the city. Those businesses, of course, will pay
property tax.

With all the hand-wringing from various municipal and provincial
governments, there's now a running joke ahead of legalization that
only the government could manage to not make money from the sale of

Along the same lines, perhaps it should now be noted that only the
government could turn the creation of dozens of new businesses into a
bad news story.

I'm sure if all of these cannabis entrepreneurs were to do the city a
"favour" and burden surrounding municipalities instead with their
business licence and zoning applications, Calgary officials would be
lamenting how we're missing out on all of this economic activity.

I don't think the city wants that to happen, though. In a perfect
world, they'd pocket the property taxes these businesses will bring,
and then top it off with an additional windfall of provincial and
federal cannabis revenue sharing.

Can't blame them for asking, I guess. However, that doesn't - and
shouldn't - give them a free pass on making these rather specious
financial projections.
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MAP posted-by: Matt