Cannabis tax revenue was among the topics Kamloops Centre MLA Peter Milobar brought up in a debate with BC’s Minister of Finance, Brenda Bailey, in the legislature on May 26.

Milobar, a member of the BC Conservative Party, was questioning BC NDP MLA Bailey on several issues related to the BC 2025 budget released in March. 

Milobar’s questions about cannabis related to the province’s 75% share of the federal cannabis excise tax, which was forecast to be about $110 million a year over the next few years, and how it is being spent, as well as double standards in the province’s enforcement of its own retail regulations.

First, in reference to BC’s expected $110 million for its share of the federal cannabis excise of $1 a gram, Milobar asked if the provincial government was sharing this with BC municipalities. 

The Minister of Finance responded that it does not share this revenue with municipalities, which the Kamloops Centre MLA said was an expectation of the Union of BC Municipalities (UBCM), which has been calling on the province to share that revenue since legalization began.

BC’s Minister of Finance disputed that this was ever a part of the agreement it made with its municipalities, or with the federal government. Although not officially part of the federal/provincial/territorial agreement, Canada’s Department of Finance has said in the past that its expectation is “that a substantial portion of the revenues” be transferred to local communities.

Several other provinces, such as Ontario, Quebec, and Alberta, have shared this revenue with their municipalities.

In 2020, the Union of BC Municipalities (UBCM) reported that a survey of its membership revealed $11.5 million in incremental local government costs per year for the three years following cannabis legalization.

A representative from BC’s Ministry of Finance has previously told StratCann that cannabis excise tax revenue goes into the province’s Consolidated Revenue Fund for programs like health care, education, and child care.

As of May 1, 2025, the BC government has received $419.3 million in their share of those taxes, based on sales through December 2024.

Wholesale cannabis sales in BC in the first three months of 2025 were $144 million, at an average price of $3.79 per gram. 

Lost tax revenue from First Nations stores?

Milobar’s second line of questioning in regard to cannabis was about the apparent lack of enforcement of the province’s own retail cannabis regulations when it comes to many on-reserve stores. The Conservative MLA wanted to know how much lost revenue this relative lack of enforcement represented for their province.

“What is the revenue loss that the Minister of Finance has calculated on a yearly basis by not enforcing the rules as they pertain to cannabis, unlike trying to enforce the rules as they pertain to tobacco or liquor?”

Bailey avoided directly answering the question by noting that the Ministry of Finance does not investigate cannabis like they do tobacco, and deflecting to the federal government when it comes to their collection of the cannabis excise tax. The federal government distributes this tax based on reported sales in each province, except for Manitoba, which opted out of the tax-sharing agreement signed by all other provinces and territories. 

“The investigation unit within the Ministry of Finance does not investigate cannabis. I previously mentioned Kamloops-area enforcement. We were involved because of the tobacco side. It was a work with the police, and they were involved in regards to the cannabis and tobacco. Also, it’s actually the CRA who collects the excise tax in cannabis, not the province, so they’re responsible for the enforcement from the tax perspective. In the province, the Solicitor General is responsible for looking at enforcement from a legal perspective.”

RCMP in Milobar’s riding recently raided two unlicensed cannabis stores on or near First Nations reserve lands, although such enforcement actions remain relatively uncommon. While the BC government has maintained that only cannabis stores that it has licensed are allowed to sell cannabis in the province, enforcement against unlicensed stores operating on First Nations reserve lands tends not to be a priority for provincial enforcement officers.

Google Maps currently lists a half dozen such stores on First Nations lands near Kamloops, and dozens more operate around the province, especially in the interior region around Kamloops.  

In 2023, the BC Minister of Public Safety and Solicitor General said that the provincial cannabis enforcement agency, the Community Safety Unit (CSU), had also conducted nine enforcement actions on First Nations reserves in the province, seizing about $12 million worth of products.  

As of January 2025, the CSU has conducted 368 educational visits, resulting in the closure of 238 unlicensed stores. CSU has investigated 1,657 websites involved in the illegal sale of cannabis and has disrupted 1,054 of those websites. It has seized a total of $39.24 million worth of cannabis, the bulk of which was from 2019-2022.

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