City council voted 6-3 Monday night to significantly reduce the fee the city will charge retailers for a business licence as part of passing a series of bylaws and a policy in the lead up to legalization of cannabis next month.
Those who set up shop in the city will be charged $1,000, well down from the $5,000 staff had recommended in the name of recovering the costs related to policing, bylaw services and public education.
Coun. Garth Frizzell suggested $1,000 as an apt amount. Municipalities are seeking a 40-per-cent share of the provincial government's excise tax on cannabis, but how much local governments will receive remains up in the air.
"On the side of not wanting to prejudice them toward keeping the money in the provincial coffers, I want to protect us by having a high fee," Frizzell said. "But the small business person in me is saying 'look, this first year we're not going to get a flood of people and we're uncertain of what the revenues are going to be on any side,' so my inclination...is to take that fee of $5,000 and bring it down."
Coun. Brian Skakun followed up with a motion in support of Frizzell's suggestion. He called $5,000 "unfair and excessive" and dismissed the need to charge the same rate as other communities. Council had been told $5,000 is at the lower end of what other municipalities are charging.
"We have a lot of entrepreneurs in the community that really want to step up an run legitimate businesses selling a quality product that isn't contaminated," Skakun said. "We want to take some business away from organized crime and I think this is the perfect opportunity."
If the stores prove to be putting a strain on policing, council can always come back and increase the fee, Skakun added.
At $280, liquor stores are charged significantly less and Coun. Terri McConnachie said she did not see much of a difference between them and cannabis stores in terms of cost to the city.
On that note, planning and development general manager Ian Wells said the city's fees will be going through a view that should be ready for council by late next year.
Coun. Frank Everitt said he'd be more comfortable with $2,000 or $2,500 but was willing to go with $1,000 and "correct if needed" at a later date. Mayor Lyn Hall took the same position.
Coun. Murry Krause said the reduction might encourage owners to manage their businesses well because if they cost the city a lot to deal with, the fee could be increased in the future.
Councillors Albert Koehler, Jillian Merrick and Susan Scott voted against the motion.
Koehler said he is simply "against this stuff" and suggested the fee be doubled or even more to "make it difficult for anyone to obtain this stuff."
Merrick said the rate proposed by staff is evidence based and does not impose a significant barrier to entry given the relatively low costs businesspeople otherwise face to open a store.
"If we look at restaurants, for example, the licensing is very cheap but a commercial kitchen can cost you upwards of $40,000 or $50,000," she said. "A cannabis retail facility would not, infrastructure wise, be an expensive business to do. You could do it out of a closet and a bookshelf."
In all, council passed three bylaws and a policy related to cannabis through first and second reading. A public hearing on the items will be held on October 1 with final readings slated for October 15 if they remain unchanged.
