The Government of British Columbia is excluding federally-licensed medical marijuana production from the list of agricultural uses that qualify for farm classification for assessment and property tax purposes.

The decision will ensure local governments do not lose potential property tax revenues from the Health Canada licensed-production facilities.

Medical marijuana is a federally-regulated narcotic produced by licensed operators in British Columbia. There are currently five federally-licensed facilities in British Columbia.

B.C.’s position takes into consideration the nature of the highly-regulated and secure facilities, and is consistent with the approach being taken in neighbouring Alberta.

The Government of British Columbia will also continue to view medical-marijuana production as an allowable farm use within the Agricultural Land Reserve that should not be prohibited by local government bylaws. This is consistent with the Agricultural Land Commission’s interpretation of the Agricultural Land Commission Act.

Federal regulations for medical marijuana came into effect April 1, 2014. The exclusion from farm classification for property tax purposes will take effect for property assessments in the 2015 taxation year.

Media Contacts:

Shannon Hagerman
Ministry of Community, Sport and Cultural Development
250 953-3677

Robert Boelens
Ministry of Agriculture
250 356-1674

BACKGROUNDER

Eligibility for farm classification for property tax purposes

In British Columbia, the BC Assessment Act specifies which farm uses qualify for farm classification for property tax assessment purposes. If the income derived from these qualifying uses meets the prescribed levels, the land and buildings in which the activities are carried out may be eligible for certain tax benefits. Farm class confers significant benefits to a property through low land values, reduced tax rates, PST exemptions and exemptions on farm buildings of up to 87.5% of value.

The B.C. government has amended the farm class regulation to exclude federally-licensed medical marijuana production facilities as a qualifying farm product for assessment and taxation purposes. This means the facilities would not be eligible for the benefits of farm classification. The regulatory amendment will take effect in the 2015 property taxation year.

There are already approved activities on Agricultural Land Reserve (ALR) land that are not eligible for farm classification for assessment and property tax purposes. Excluded products and activities include farm or ranch tourism operations; sand and gravel extraction operations and winery and cidery facilities.

Facilities are accepted farm use within Agricultural Land Reserve
Licensed medical marijuana production facilities may be located on both provincial ALR and non-ALR lands, subject to local government zoning and other site requirements. The Agricultural Land Commission has determined that medical marijuana production is consistent with the definition of a farm use under the Agricultural Land Commission Act. However, as a federally-regulated narcotic, it will not be eligible for farm classification for property tax purposes. Consistent with the federal government’s direction and the Agricultural Land Commission’s position, and based on legal guidance, the Province agrees local governments should not prohibit medical marijuana production in the ALR.

Local governments looking to propose a bylaw prohibiting medical marijuana may wish to seek legal counsel as enacting such a bylaw may give rise to a constitutional challenge as frustrating a lawful initiative of the federal government.

Health Canada licensed facilities:
Since 2001, Health Canada has granted access to marijuana for medical purposes to Canadians who have had the support of their physicians. In June 2013, the Government of Canada introduced new regulations that treat medical marijuana as a controlled narcotic and created a new commercial industry that is responsible for its production and distribution. As of April 1, 2014, the only way to access medical marijuana for medical purposes is through commercial, licensed productions.

The federal government requires licensed producers to maintain specific security measures, including a detailed description of the measures and floor plans of the site, and to meet local government requirements as a condition of their license. As of May 5, 2014, five licenses have been issued to producers in Central Saanich, Maple Ridge, Whistler, Nanaimo and Spallumcheen.

Quick Links:

Health Canada (Medical Use of Marijuana): www.hc-sc.gc.ca/dhp-mps/marihuana/index-eng.php

BC Assessment: www.bcassessment.ca/Pages/default.aspx

Agricultural Land Commission: http://www.alc.gov.bc.ca

http://www.alc.gov.bc.ca/publications/ALC_Info_Bulletin_Marijuana_Amended_Jan_2014.pdf

Media Contacts:

Shannon Hagerman
Ministry of Community, Sport and Cultural Development
250 953-3677

Robert Boelens
Ministry of Agriculture
250 356-1674