Natives want cut of pot revenues

Well, you had to see it coming.

The federal government laid out a plan to legalize marijuana and make some tax revenue out of the deal and right away, Canadian natives came running to the government with their hands out demanding their cut of the revenues.

Funny, these same natives never said a word about sharing in the administrative cost of rolling out the legalized marijuana plan. The finance minister in Newfoundland Labrador, Tom Osborne, for instance, estimates costs of rolling out the plan will eat up most of the first-year revenues.

Based on numbers provided by the Newfoundland and Labrador Liquor Corporation, which will handle legal marijuana sales, the province should bring in cannabis revenue of $5.8 million this year, Osborne said.

Costs associated with implementing legal pot are expected to be about $4 million, Osborne added, providing the province with net revenue of $1.8 million in the first year of legalization.

But First Nations officials don’t say a word about sharing in any of the costs. They just want to manage their own pot business and take in the revenues.

“A leading voice on First Nations finances wants the federal government to surrender taxation powers over cannabis to band councils, arguing Indigenous peoples should get a cut of the billions of dollars in revenue expected from legalization,” the CBC’s John Paul Tasker reported back in March.

Manny Jules, chief commissioner of the First Nations Tax Commission, is urging senators to amend Bill C-45, the government’s pot bill, to hand taxing authority to First Nations governments so they can impose their own levy on cannabis manufactured and sold on reserves.

The federal Liberal government reached a deal with the provinces to divide up the excise duty collected on the sale of cannabis — a 75-25 split in favour of the provinces, owing to the costs they will incur with legal pot.

First Nations say their governments also will face new challenges from legal cannabis, but they stand to gain nothing from Ottawa’s plan. So now, they want the government to not only negotiate with the provinces and territories, but also with the First Nations communities as well.

Did Prime Minister Justin Trudeau envision this mess when he first proposed making a few bucks off the sale of legalized pot? Probably not.

Under Jules’s proposal, Ottawa and the provinces would cede ground to First Nations to collect taxes and provide some much-needed revenue to their cash-strapped communities.

The funds could be used to develop cannabis-related laws and regulations on reserve, fund campaigns to educate young people about the dangers of the drug or bolster First Nations police forces, Jules said.

Jules said that despite the prime minister’s talk of a new nation-to-nation approach with Indigenous peoples, very little consultation on revenue-sharing happened before the legislation was rolled out, leaving a legal “dog’s breakfast” on reserves across the country.

“I think that people are very disappointed that we weren’t considered early on,” said Jules, the former chief of a band near Kamloops, B.C. “The challenges [First Nations] face are even larger than those of the provincial governments.”

But what about the cost of implementing the plan? And what about the cost of policing the legalization of marijuana. Just last September, a report released to Toronto City Council from its licensing executive director Tracey Cook recommended city council endorse the plan that would initially see marijuana sales only at 150 province-run stores after Ottawa ends prohibition. But Cook also made it clear he didn’t want to see Toronto burdened with the costs.

Currently, the federal and provincial governments get revenue from alcohol sales while municipalities primarily shoulder attendant costs from policing, license enforcement and social service costs.

“A provincially-operated (marijuana) retail model guided by public health objectives and social responsibility would help ensure that public health and safety is paramount, thereby reducing local impacts that would require extensive municipal oversight and enforcement. . . ,” Cook wrote in his report. “But senior governments “must adequately fund on a full-cost-recovery basis for the city’s role in implementation and enforcement arising from the legalization of cannabis, including enforcement costs related to the operations of illegal cannabis sales and use.”

So the natives and the provinces are on the same page. They’ll take the revenues from the sale of marijuana, but they want the provincial and/or federal governments to pay for the administrative costs.

Conservative Nunavut Sen. Dennis Patterson, currently on a cross-territorial tour soliciting feedback from Inuit on the push to legalize cannabis, said most members of the Senate’s Aboriginal peoples committee are looking at Jules’ proposal with “enthusiasm.”

“The general flavour is positive,” he said in a phone interview with CBC News from Resolute Bay, Nunavut. “I can’t speak for the committee as a whole, but I’m certainly going to be encouraging them [to make an amendment to the bill].”

Of course, they are reacting with enthusiasm. The proposal calls for the federal and provincial governments to pay all the bills and for the natives to rake in the cash. That simply isn’t fair, although it might seem fair to the natives, who only seem to want to participate in revenue-generating projects if they don’t have to pay any of the bills to get the projects off the ground.

When asked about the natives’ allegations of insufficient consultation, a Finance Canada spokesman said all stakeholders, including Indigenous communities, were invited to submit feedback on the proposed cannabis excise duty framework last fall.

While they’re not specific to the cannabis duty, the government has been in discussions about tax revenues more generally with the Assembly of First Nations and self-governing Indigenous communities, the spokesman said.

“The government is considering the perspectives heard to date and is committed to ensuring that its policies in respect of tax arrangements with Indigenous governments are consistent with the principles underlying reconciliation and a renewed fiscal relationship,” the spokesman said.

Oh boy, so how much is this going to cost the Canadian taxpayers? Are we about to get slammed with the administrative costs of rolling out a marijuana legalization plan on Canadian reserves without the reserves paying any share of those costs? Well, you know how the natives negotiate. They want all the revenues and they want the federal and provincial governments to pay all the bills.

It could be interesting to see what this “renewed fiscal relationship” will cost Canadian taxpayers. The native people have their hands out again looking for cash. They’ll probably get it, too. But what’s really said is the cost of administrating and policing the plan to produce that cash will probably not be borne by the natives. Nope…it will be like everything else – the natives will get the cash. All Canadians will get the bills.

Jeff Wilkinson

Jeff Wilkinson  is a Senior Politics Reporter at Debate Report covering provincial and national politics, . Before joining  Debate Report, Jeff worked on several provincial campaigns including Jack Layton. Jeff has worked as a freelance journalist in Toronto, having been published by over 20 outlets including CBC, the Center for Media and

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