EDMONTON — If you’re a large-scale pot grower in Alberta, get ready to pay more tax.

Alberta’s Minister of Municipal Affairs, Kaycee Madu, told hundreds of people who gathered in Edmonton this week for the 2019 Rural Municipalities of Alberta (RMA) convention that cannabis producers shouldn’t count as agricultural operations under provincial regulations and therefore, should be taxed accordingly.

“Our government has taken action to support you,” Madu said during a speech on Wednesday at the Edmonton Convention Centre.

“This is a new industry and it requires a change in tax rules.”

Alberta’s NDP and the president of the RMA say they support the tax on cannabis producers, but they also said the new measure comes in the wake of the United Conservative government’s first budget, which rolled out cuts for municipalities.

Still, thanks to the new tax, some pressure may be alleviated, even if it’s only for about 25 jurisdictions in Alberta who will be able to take advantage of the tax on producers.

Municipalities will now be able to collect property taxes on these cannabis facilities such as Aurora Sky at Edmonton International Airport in Nisku, or Freedom Cannabis in Acheson, Alta. The changes will come into effect for the 2020 tax year with an update to a provincial taxation regulation.

According to a news release, greenhouse operations and industrial hemp cultivators won’t be subject to this new change, and it also won’t affect other agricultural industries. Cannabis producers will be assessed at market value and taxed at non-residential rates.

The news was “disappointing,” said an emailed statement from Michelle Lefler, VP of communications with Aurora Cannabis Inc. Aurora Sky, the company’s facility outside Edmonton, is one of the largest cannabis producers in the world.

“Aurora remains committed to our roots in our home province of Alberta,” she said. “Our founders are proud Albertans, and are proud to bring continued value to the province through creation of more than 2,000 jobs to date and investment of over $500 million.”

But for municipalities facing a tough fiscal future over the next three years, Kemmere said the change was a welcome one.

“We’ve been asking the government to put cannabis-production facilities on equal footing with other industrial businesses since legalization,” said RMA president Al Kemmere in the news release.

“I’m glad the government listened to our concerns and acted swiftly.”

An estimate on how much money municipalities could raise through the change was not immediately available, but Kemmere said it had the potential to be significant for some municipalities.

He added that he was ready to take on the task of tightening his fiscal belt as long as the province was ready to make assurances municipalities would see the spoils when the economy gets rolling again.

When the provincial budget was announced in October, municipalities in Alberta were told they’d be losing out on some capital grant money. Over three years, money for municipalities will be cut down by about $236 million in grant funding.

“It’s going to take a re-evaluation of our processes within our governments and hard decisions are going to have to be made on capital projects,” Kemmere said. “Hard decisions are going to have to be made on operating costs. But we realize that we need to do our part.”

The province is also reviewing how it dolls out money to small municipalities for policing, which raised some eyebrows in September when a document obtained by the NDP suggested they were considering making some municipalities with less than 5,000 residents pay as much as 70 per cent of their own policing costs.

Kemmere said he’s waiting for the full plan from the province, but warned that rolling out too many policy changes onto municipalities would make it difficult for them to adapt, and that he hoped to see adequate police funding in a time where, since the 2014 downturn in the economy, rural crime has increased.

“Will we be paying something? Yes,” he said. “Our numbers should reflect service and should reflect people services.”

But the NDP’s municipal affairs critic, Joe Ceci, said municipalities will still be scrambling to make up for the cuts in the budget.

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“There’s just 24 facilities around the province and there’s many, many, many, many more counties and municipal districts that wont be able to have that advantage of taxation,” he said.

But deciding to tax cannabis producers was a “no-brainer,” Madu said.

“This is a large scale production that relies a lot on municipal services and it is only fair that they contribute in providing those municipal services to help alleviate the pressures on municipal finances,” Madu told reporters after his announcement.

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