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Municipalities now able to tax Cannabis production facilities at commercial rates

(Last Updated On: Nov 13, 2019)

Above: Minister Kaycee Madu with RMA president Al Kemmere after announcing new property taxes for cannabis-production facilities.

by Morinville News Staff

The Government of Alberta is making changes to Alberta’s property tax rules it says will ensure cannabis-production facilities pay their fair share for municipal services. Buildings that house cannabis production will now be assessed at market value and taxed at non-residential rates.

Municipal Affairs Minister Kaycee Madu announced the changes at the Rural Municipalities of Alberta convention in Edmonton Nov. 13.

Under the revision, which will come into effect for the 2020 taxation yer, cannabis facilities will be taxed as non-agricultural businesses. The government says it is a direct response to the needs of municipalities that asked for cannabis facilities to be made taxable in provincial tax regulations.

“This change responds directly to the concerns of municipalities, who asked for this distinction in provincial tax regulations,” Minister Mandu said. “While cannabis is a burgeoning industry, it is important that cannabis-production facilities – which are heavy users of municipal services – pay their share for those services.”

Mandu’s announcement was welcomed by the Rural Municipalities Association (RMA).

“The RMA welcomes this announcement, as 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. “I’m glad the government listened to our concerns and acted swiftly.”

However, those inside the industry are not as welcoming to the idea.

“This is very disappointing and shortsighted. We will now see less investment in the province when we’re already losing investment in the oil and gas sector. Cannabis brought in more investment than all other sectors combined over the past two years,” said Dustan McLean, Chief Growing Officer of Parkland Flower, a new facility currently in the development phase.

“There was no consultation with our industry and this won’t do anything but hurt the small business owner.”

The tax change does not apply to greenhouse operations or industrial hemp cultivation, nor does it affect any other sectors of the agricultural industry.

Municipal assessors will be responsible for preparing market value-based assessments for taxation in 2020 and future years.

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