The Region of Peel and its two largest municipalities have reached an interim agreement divvying up the municipal share of cannabis tax revenue once pot becomes legal in the fall.

The agreement, announced at the July 12 meeting of Peel regional council, will see the region get 75 per cent of allocated tax revenues, while Brampton and Mississauga will split the remaining 25 per cent.

The federal government's Bill C-45, making recreational cannabis legal, received royal assent on June 21. The planned legalization implementation date is Oct. 17.

“In December 2017, the federal government reached an agreement with the provinces and territories to share excise duty revenue over a two-year period. Under this agreement, revenues will be split 25/75 per cent between the provincial and federal governments, respectively,” reads the Peel council report.

It remains unknown precisely how much each municipality can expect, but in a report to Peel Region council on July 12, staff told council the provincial government expects to collect an estimated $100 million in revenue in the first two years, with approximately $40 million earmarked for municipalities.

“Funding will be allocated on a per household basis, adjusted to ensure that each municipality receives no less than $10,000,” added the report.

That arrangement, devised by the previous provincial government, would see half of that anticipated $40 million distributed to municipalities prior to legalization to help them to prepare for implementation. The other half is expected to be distributed on the first anniversary of legalization. The new PC government under Doug Ford has given no indication it plans to make any changes.

The provincial legislation set the revenue split between regional and municipal governments at 50/50. However, as is the case in Peel, regions and their municipal counterparts are allowed to make alternative arrangements.

“The provincial distribution between the Region and local municipalities, while equal, does not recognize that the Region will bear most of associated costs,” wrote staff in its report.

“Based on Regional staff’s preliminary analysis of the provincial funding announcement, Peel (Region and local municipalities) is estimated to receive $3 million for the first two years. According to the Federation of Canadian Municipalities, the two main drivers of municipal costs arising from the legalization of cannabis are police and municipal administration,” added the report.