Supplemental information to Resolution

Supplemental information to Resolution 2018-1 Open any news article today and you are likely to find a story explaining the merits or hazards of Cryptocurrency. Despite many only recently becoming aware of its existence, the first Cryptocurrency, Bitcoin, was created in 2008. Initially, Bitcoin was highlighted as a libertarian alternative to the dominant centralised banking system. However, Bitcoin has continued to evolve caused a disruptive change in governments and business alike, with many predicting the technology behind Bitcoin, the blockchain, will become the most important technological development in modern society since the Internet. Origins of Cryptocurrency Created as a response to the banking crisis by Satoshi Nakamoto, the fundamentals of Bitcoin centre around principles of decentralization and anonymity. Satoshi Nakamoto aimed to create a system where currency is not controlled by a central authority, such as a bank or government. Instead, he developed the concept of the blockchain, where technology guarantees that transactions can take place between two parties, without interference from a central system. Satoshi Nakamoto s intention, to remove power from a central authority and return it to the individual, has been realized by the way in which Bitcoin and other Cryptocurrencies have been adopted by society. However, the framework of the technology has also left an avenue of exploitation for those with criminal motivations. Cryptocurrency and Crime The tenet of anonymity with Bitcoin means that there is no easy way to trace the origin of funds or indeed where those funds are transferred to. Therefore, transactions can be, if used properly, truly anonymous. Secondly, there is no limit as to the amount of funds that can be transferred from one party to another, enabling unlimited transfer of currency to take place in a single transaction. Given the lack of a central authority, there is also no controlling body who can monitor or regulate the transfer of funds to ensure a legitimate transaction. In addition, no government has control, meaning that even if a government banned Bitcoin it would just go further underground and become the currency of the black market. Canadian Regulations

In 2014, then Canadian Finance minister, Jim Flaherty, recognized the issues that Cryptocurrency presented and soon, a provision in Bill C-31, which outlined major changes in the way in which Canadian law recognised Cryptocurrency soon followed. In this bill, Cryptocurrencies are to be regulated as a digital money service business. Any companies wishing to transmit or convert Cryptocurrency will then be required to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The bill was given Royal Assent in June of 2014, however it was never brought into force. Flaherty also asked the Canadian Senate Banking Committee to study Cryptocurrency to provide an informed opinion on the issue and this would guide the decision on policymaking. The Committee s 2015 report, warned of the possibility of regulation stifling the development of this new Blockchain technology. The Committee suggested monitoring the situation and allowing an innovative environment so that Cryptocurrency can flourish. They suggest that the government should not necessarily regulate but employ regulation as necessary. To date, the Cryptocurrency provision of Bill C-31 has still never been regulated. This is reflected in FINTRAC s current position that those who deal in virtual currencies are not considered a money service business and are not required to register with them. Implications of Non-Regulatory Framework While the implications of this position are not immediately apparent, it is easy to gain some perspective when we examine crime statistics, given the increase in Cryptocurrency-related files over the past five years. This graph shows a consistent rising trend of Cryptocurrency files in Metro Vancouver year over year. This trend shifted dramatically in 2017, with a 350% increase in files over 2016. As of January 2018, there were 70 Cryptocurrency related files. If this rate continues through the year, we may have approximately 840 Cryptocurrency related files in 2018, which would be another 300% increase.

This alarming rise in Cryptocurrency-related files is primarily due to the way Bitcoin has been adopted by fraudsters as the medium of choice to transfer funds. While there are different scams that use Bitcoin, by far the largest is the Canada Revenue Agency (CRA) or Income tax scam, recently listed in the top 10 scams of 2017 by the Better Business Bureau. These fraudsters are often based overseas and call prospective victims posing as CRA officers or police. They inform the victim they have an arrest warrant due to unpaid taxes and they can avoid arrest if they immediately settle their outstanding balance. They use high-pressure tactics and direct victims to withdraw large amounts of cash and deposit it in a Bitcoin ATM to a predefined Bitcoin address. Unfortunately, a high proportion of victims are from the most vulnerable sections of society including recent immigrants and the elderly. Fraudsters will then target the same person repeatedly, who often transfers tens of thousands of dollars before they realize they are being scammed. What is often overlooked in these scams is that despite Bitcoin being an unknown concept to many victims, fraudsters easily walk them through the deposit and transfer of the money. The lack of a required legal mechanism allows a user to enter cash directly into the ATM and purchase Bitcoin with no know your customer (KYC) requirements. The ATM companies take full advantage of this, allowing unlimited transfer of funds and commission fees of up to 20%. Therefore, if a victim loses $50,000, the ATM company takes $10,000. While the implementation of the Cryptocurrency provisions of Bill C-31 will not eliminate this type of fraud or any scam that uses Bitcoin, it will provide a significant barrier so that checks and verifications will have to be supplied before an account can be created at an ATM. This also provides regulators an opportunity to limit large Bitcoin transfers so that the amount lost can be minimised. Cryptocurrency and Money Laundering The other issue with unregulated Bitcoin ATMs is that they are an ideal money laundering vehicle. Since there are no requirements to register any customer details, it is easy to see how cash can be transferred into Bitcoin and vice versa. A user can also launder an unlimited amount using smaller transactions so as not to arouse suspicion. This becomes even easier if a criminal group were to purchase an ATM for a few thousand dollars and put all their cash through that one ATM, laundering the money, as many times as required and either profit from or eliminate the transaction fee. An even easier solution would be to create the records on paper showing cash and Bitcoin being transferred back and forth. Without any customer details there is nothing to say that these transactions did not happen.

To provide perspective, according to the website, Coinatmradar.com, there are currently 61 Bitcoin ATMs in the greater Vancouver area, many of which are small independent vendors. None are believed to be following any form of know your customer regulation, however all the money made by these ATMs or channelled through these ATMs may be declared as legitimate income. Given this lack of regulation, it is likely that Canadian organized criminals will use Bitcoin ATMs to launder their cash. However, we will likely also see foreign organized crime taking advantage of the lack of regulations. For example, United States companies are required to comply with KYC regulations in the US, but since they can send Bitcoin to a person in Canada, regulations here do not prevent a mule from cashing out. Efforts are currently underway by the BC government to curtail the amount of money laundering that occurs in casinos. Any forward-thinking criminals will be exploring Cryptocurrency and ATMs as an easier and more profitable alternative. Conclusion While regulations for Cryptocurrency are stalled in Canada, we will likely continue to see an increase in its associated negative effects. While the Canadian Senate Banking Committee advised that governments should be light on regulation, they did not call for no regulation whatsoever. The lack of a regulatory framework allows criminal groups to explore a myriad of ways that they can exploit Bitcoin ATMs and exchanges. They can then commit fraud, launder money, and turn Canada into a haven for international criminal funds. Implementing the Cryptocurrency provisions from Bill-C31 would not eliminate these problems; however, they would restrict them at their source and severely limit their ability to flourish. Supplemental information to Resolution 2018-2 The Opioid Crisis On April 14, 2016, Provincial Health Officer, Dr. Perry Kendall, declared the opioid crisis a public health emergency in British Columbia. 1 In 2016, 993 British Columbians died from overdoses and in 2017, there were 1,422 deaths from overdoses. 2 This epidemic is increasingly characterized with illicit fentanyl, an opioid substance. Fentanyl was detected in approximately 68% and 81% of drug overdose deaths in 2016 and 2017, respectively. 3 Overdose fatalities are now the leading cause of unnatural deaths in British Columbia, and are increasing nationally as the opioid epidemic moves east from Western Canada. 4 The majority of fentanyl associated with the opioid crisis is produced in clandestine labs. Large amounts of fentanyl are produced or purchased by drug traffickers and often mixed with a number of illicit street drugs to increase the euphoric effect and expand profits, or trafficked alone as a cheaper alternative to heroin.

Investigating Drug Distributers: Partnership with Health Canada Targeting organized crime groups that produce and distribute fentanyl and other opioids has been a long-standing public safety priority for the Vancouver Police Department (VPD). The VPD has conducted investigations that have targeted higher-level drug networks involved in the production and distribution of fentanyl. The VPD also continues to target the enforcement of street-level drug networks. The VPD continues to collaborate with the Combined Forces Special Enforcement Unit - British Columbia and the Royal Canadian Mounted Police s E-Division Federal Serious and Organized Crime Section to combat the issue. Health Canada is also an important partner in our investigations as their drug analysis services include identifying and quantifying controlled drugs and substances, which are used in police reports to Crown Counsel. Such information expedites police investigations and prosecution timelines for a criminal case to be concluded. The 2016 R. v. Jordan decision established maximum timelines for the conclusion of criminal court cases. If these timelines are unfulfilled, it is presumed that the delays are unreasonable, unless proven otherwise by Crown Counsel. The R. v. Jordan decision has led to Crown Counsel establishing charge approval guidelines where charges are not approved until substantial disclosure has been received. This disclosure includes drug analysis results from Health Canada. Delays in drug analysis, therefore, can lead to delays in charge approval by Crown Counsel, which may then lead to associated threats to public safety through fentanyl traffickers being at large in the community. Both the Federal and Provincial governments have dedicated funding towards the mitigation of the opioid crisis. In April of 2017, the Federal government announced funding to support research for national measures to respond to the opioid crisis. 5 This included funding for research into problematic substance misuse, community-based projects to reduce the harms associated with drug misuse, national public awareness campaigns, enhancing national data surveillance and monitoring, and increasing national lab testing capacity. However, much of the $116 million in federal funding will be invested over five years and, given the magnitude of the opioid crisis, the VPD is concerned about potential delays and significant backlog at Health Canada. Between 2016 and 2017, Health Canada analyzed in excess of 2,000 additional exhibits containing fentanyl. In most cases, the analysis of all drugs seized as evidence is required for a criminal charge to be approved by the Public Prosecution Service of Canada. More resources for Health Canada would expectantly result in quicker analysis of results and, therefore, enable a quicker charge approval process. An accelerated process would ultimately reduce public safety threats with fentanyl traffickers taken into custody sooner.

1 BC Centre for Disease Control. (2017). Public health emergency in BC. Ministry of Public Safety and Solicitor General. Retrieved from http://www.bccdc.ca/about/news-stories/stories/publichealth-emergency-in-bc 2 Coroners Service. (2017). Illicit Drug Overdose Deaths in BC: January 1, 2007 October 31, 2017. Ministry of Public Safety & Solicitor General. Burnaby: Office of the Chief Coroner. Retrieved from https://www2.gov.bc.ca/assets/gov/public-safety-and-emergency-services/deathinvestigation/statistical/illicit- drug.pdf 3 Coroners Service. (2018). Fentanyl-Detected Illicit Drug Overdose deaths: January 1, 2007 December 31, 2017. Ministry of Public Safety & Solicitor General. Burnaby: Office of the Chief Coroner Retrieved from https://www2.gov.bc.ca/assets/gov/public-safety-and-emergencyservices/death-investigation/statistical/illicit- drug.pdf 4 Coroners Service. (2017). Illicit Drug Overdose Deaths in BC: January 1, 2007 October 31, 2017. Ministry of Public Safety & Solicitor General. Burnaby: Office of the Chief Coroner. Retrieved from https://www2.gov.bc.ca/assets/gov/public-safety-and-emergency-services/deathinvestigation/statistical/illicit- drug.pdf 5 Government of Canada. (2017). Budget 2017 Bring Additional Federal funding to fight the Opioid Crisis. Retrieved from https://www.canada.ca/en/healthcanada/news/2017/04/budget_2017_bringsadditionalfederalfundingtofighttheopioidcrisis.html?wbdis able=true

Financial Implications of the Cannabis Act Notes and Assumptions Known/Mandatory 1.1 Standard Field Sobriety Testing The standard field sobriety test (SFST) is a psycho-physical coordination test used by Officers to reveal clues of the subject driver's level of impairment and forms a key part of the evidence necessary to lay a charge. Police officers are increasingly being trained in the use of SFSTs in an effort to curb impaired driving as a result of alcohol and/or drug use. The costing was developed based on the opportunity cost of five days of training of half of YRP s 974 front-line Officers in 2018, the remaining half in 2019 and 10% thereafter on an ongoing basis for new recruits and redeployment of Officers from specialized to front-line units. In addition, instructor time was based on a 4:1 student to instructor ratio along with estimated course costs of $125 per trainee. In its brief to the Standing Committee on Health, the Canadian Association of Chiefs of Police (CACP) outlined a concerns on training and the impact on police resources. The CACP submits that guidance and direction regarding resource allocation, and sufficient time to train front line officers to implement to the proposed legislation are critically needed, either through explicit regulations prior to legalization, or postponement of the legalization date. (Source CACP i, p. 1) The costing concurs with this statement with the SFST training to front-line Officers will not be completed until 2019. 1.2 Drug Recognition Expert Training If there is evidence of impairment based on the SFST, the driver will accompany the officer to the District for further evaluation of drug influence by an officer trained in the Drug Recognition Expert (DRE) program. Using a detailed twelve step method, a DRE conducts a diagnostic examination of persons arrested or suspected of drug-impaired driving or similar offenses. Based on the results of the drug evaluation, the DRE forms an expert opinion on: impairment, the type of impairment and the most likely source. The costing includes the opportunity cost of fifteen days of training phased-in for eleven Officers in 2018, fourteen Officers in 2019 and five on an ongoing basis thereafter. The expected outcome is to increase the number of YRP s DRE trained Officers from thirteen to thirty-eight. The costing also includes $2,500 in travel related costs per trainee due to the course location in the United States. These costs could become nil should the International Association of Chiefs of Police approve the Ontario Police College to decentralize outreach training and allow YRP to host the training locally. 1.3 Bill C-45, Bill C-46 and Provincial Regulation Training A one-day training program is anticipated for all Officers on the implications of bills C-45, C-46 and associated provincial regulations once they are released, through a combination of instructor led training and e-learning. The costing is based on the opportunity cost of all 1,624 Officers for one day of training in 2018 followed by an ongoing 5% thereafter forming a new part of recruit training. 1.4 Impaired Driving Training and Equipment Coordinator Civilian support staff is needed to develop e-learning for all officers for drug detection in drivers, legislative and case law updates, best practices, annual ongoing updated training course design and to coordinate related equipment.

The new full-time civilian trainer is based on a civilian band 7 salary starting in 2018. In addition, the cost of building training curriculums (for 1.3) included: for instructor led training, one Constable for four days or a ratio of four days preparation for each day of training; and, for e-learning, a civilian band 7 for 100 hours to reflect a 1:100 course preparation ratio. 1.5 Roadside Screening Equipment and Supplies Although an approved device has yet to be identified by the government, the costing includes estimates in 2018 of $5,000 per device to outfit 163 front line vehicles to match the current inventory of the Alcotest screening devices. In 2019, the costing assumes an additional 8 devices or 5% per year for repair and replacement. Each of the roadside screening tests utilize a $40 non-reusable detection cartridge comprised of perishable fluids that expire two years from the date of manufacture. For driver checks, a historical three-year average was developed from RIDE statistics that suggested for each suspension there were 6.4 tests administered. Therefore, the annual quantity cartridges was estimated at 8,134 per year (1,271*6.4) by 2019 based on an estimated 1:1 ratio with alcohol impairment supplies. The estimate of future drug impaired driving is a key assumption. The National Highway Traffic Safety Administration s Roadside Studies that found, that the presence of THC among drivers has increased, and THC positive driving now exceeds alcohol positive driving (source NHTSA ii, p. 9). Anticipated/Expected 2.1 Drug Impaired Traffic Stops, Seizures and Violations The largest front-line impact on enforcement from the legalization of cannabis is expected to be drug impaired driving. Colorado experienced a 41% increase in cannabis related traffic deaths in the first two years since recreational cannabis was legalized (source Colorado iii, p. 14). As previously noted above, the costing has used an assumption of 1,271 drug impaired traffic violations by 2019. Driver checks was estimated based on 6.4 checks per violation using historical RIDE statistics along with an estimate of 40 minutes of Officer time per check inclusive of administering the check and associated notes. For charges laid, the estimated cost is $440 per charge based on the average 2016 impaired traffic violation calls using data from YRP s Business Intelligence system (source YRP-BI iv ). For drug related seizures, the costing applied an increase of 34% in accordance with Colorado s experience for interdiction seizures (source Colorado iii above, p. 103). 2.2 Motor Vehicle Collisions In Colorado, they reported a 7.2% increase in the number of total accidents the year after legalization (source Colorado iii, p. 27). The costing reflects both front-line and Collision Reporting Centre costs inflated by 7.2% by 2019, with 2018 reflecting a half-year impact. In addition, costs were added for major collision investigations based on Colorado s 11% increase in overall traffic deaths (source Colorado iii, p.18). 2.3 Injured Persons Colorado experienced a 29% increase in cannabis related emergency room visits and a 66% increase to average cannabis-related hospitalizations in the year after cannabis was legalized (source Colorado iii, p. 77-81).

The costing utilized YRP Business Intelligence data to obtain a 2016 baseline of 357 cannabis related injuries (source YRP-BI iv ). The costing reflects a 22% increase to injured persons calls by 2019, with 2018 showing a half-year impact. 2.4 Enforcement of Thefts, Suicide, Break and Enters, Complaints, Robberies and Mischief The evidence of overall crime rates varied with Colorado seeing a higher crime rate increase of 12.3% (source Colorado iii, p. 138) and Seattle, WA at 6.2% (source Seattle v ). The costing utilized YRP Business Intelligence data to obtain a 2016 baseline for front-line direct labour and subsequently adjusted for benefit costs for: thefts ($893,706), suicide ($458,587), break and enters ($419,172), complaints ($279,636), robberies ($232,452) and mischief ($111,430) (source YRP-BI iv ). The cannabis legalization estimates were based on a 6.2% increase by 2019 that used the lower Seattle, WA data and with 2018 representing a half-year. 2.5 Criminal Investigations The District Criminal Investigation Bureau s workload is typically correlated with overall crime changes. However, for costing purposes, YRP has used a three-hour review assumption for the abovementioned enforcement of thefts, suicides break and enters, complaints, robberies and mischief investigations for the purposes of a basic administrative review. The costing assumes 800 additional case reviews at three hours per review, to be completed by Detectives and Detective Constables. 2.6 RIDE Spot-checks RIDE spot-checks are random sobriety tests that have proven to be an effective enforcement tool to catch impaired drivers. Over the past three years, the number of vehicles checked averaged 5,475 vehicles, with 296 stops resulting in an approved screening device test and an average of 46 license suspensions and charges laid annually. The costing assumes a 100% matching expansion of the existing RIDE program. 2.7 Information Technology Support Information Technology support is expected for a number of systems including: e-ticketing; records management text pages; Coplogic; and, other database amendments. The costing assumes a team from Information Technology of one Supervisor civilian band 9, one civilian band 8 and one Constable for a period of four weeks. 2.8 Information Management Support Information Management support is expected for amendments to the e-just system and to training documents. The costing assumes the Assistant Manager of Information Management and one civilian band 7 for a period of four weeks. 2.9 Provision for Drug Recognition Expert Premium The current uniform working agreement provides a $250 annual premium for members certified and performing duties as a Breathalyzer Technician or as an Intoxilyzer Technician (source YRP-UWA vi p.

31, s. 17.14). The costing provides for a labour relations cost for a similar DRE allowance that may be requested in future rounds of collective bargaining. Best Practices 3.1 Impact on Front-Line Sector Model Policing YRP aims for patrol cars to spend no more than 30% of time, on average, on calls for service, allowing 30% of time for proactive policing activities, 30% on administration duties and 10% for community engagement. The anticipated/expected additional impact to demands for service was calculated at $1.3 million annually, necessitating adjustments to provide for additional proactive policing at $1.3 million, administration at $0.9 million (which is net of a reduction from ongoing training at $0.4 million) and community engagement at $0.4 million annually. 3.2 Illicit-Market Disruption Team In its brief to the Standing Committee on Health, the CACP outlined a concerns of organized crime groups, we are concerned that the Act will result in increased cannabis consumption, thereby creating an increase in demand and an opportunity for organized crime to profit from an illicit black market by trafficking cannabis with higher tetrahydrocannabinol (THC) content at lower cost to the consumer. (Source CACP i, p. 3) The initial November 15, 2017 costing assumed a complement of two Detectives and five Detective Constables, starting in 2018 to disrupt the illicit market activity associated to cannabis. From subsequent deliberations, the resources were reduced to one Detective and four Detective Constables, as part of a future provincial illicit-market disruption initiative. The expectation is the costs for these members to be reimbursed using a paid secondments. 3.3 Road Safety Enforcement In Colorado, a number of impaired driving statistics increased after legalization including: a 32% increase to cannabis-related traffic deaths (source Colorado iii, p. 1); cannabis-related traffic deaths were approximately 20 percent of all traffic deaths compared to half that (10 percent) five years earlier (source Colorado iii, p. 2); and, THC results for primary driving under the influenced increased 45 percent in one year (source Colorado iii, p. 2). To fully respond to the impacts of drug impaired driving, YRP has requested additional resources to address the increased calls for service and as a proactive measure to supplement road safety enforcement. The additional Officers are needed to address an anticipated increase in drug impaired driving, as found by the aforementioned National Highway Traffic Safety Administration findings that THC positive driving now exceeds alcohol positive driving (source NHTSA ii, p. 9). The costing is based on two additional Constables per platoon for a total of eight Officers with a 2019 start date. 3.4 Patrol Supervision The current Constable to Supervisor ratio for sector model policing is 1 Supervisor for every 7.9 Officers. With the proposed increases to front-line service delivery (administration, demands for service, proactive policing and community engagement), corresponding increases in front-line Supervision were needed to maintain the patrol supervision ratio at a cost of $385,500 annually.

3.5 Fleet and Equipment At full implementation in 2020, the total resources dedicated to the Cannabis Act represent 54 fulltime equivalent members. The costing assumes a 3.5:1 member to vehicle ratio for a total of 15 additional vehicles, based on the front-line deployment ratio reported in the YRP State of Infrastructure Report, 2015 (source YRP-SOIR vii, p. 32). The costing reflects both the one-time purchase cost but also the ongoing operating costs of the 15 vehicles. In 2018 equipment purchases, digital scales are costed for deployment to 163 front-line vehicles at $100 each device. 3.6 Analytic Support Civilian support staff is needed to conduct enhanced statistical and predictive analysis using business intelligence technologies to support new analytical applications as well as to provide expertise in managing new data types. The costing is based on one civilian band 7 with a start date in 2019. 3.7 Business Intelligence Dashboard With the Board s investment in the Business Intelligence system, YRP has requested an additional cannabis dedicated dashboard. The dashboard is envisioned to report on resources available such as the Officers who have completed specialized training as well as enforcement statistics such as the number of impaired driving related charges/investigations and RIDE hours. The costing was developed on the assumption of the Business Intelligence team for four weeks comprised of: the Assistant Manager and three civilian band 8 members. 3.8 Youth Education and Prevention in Schools Colorado experienced a 34% increase in drug-related suspensions and expulsions in its schools over a ten-year period (source Colorado iii, p. 41). In Washington, 48% of statewide student expulsions and 42% of suspensions directly involved cannabis (source Washington viii, p. 54). The CACP has proposed a more rigorous educational system. In the interest of mitigating the risk to youth and maintaining the long-term quality of life in our communities, police services will need to amend their crime prevention and social responsibility initiatives to incorporate elements that address the public safety and quality of life risks associated to the use of cannabis. (Source CACP i above, p. 5). The costing for a youth education and prevention in schools includes delivery by School Resources Officers for four hours at each of York Region s 68 secondary schools. The curriculum development costs are based on a team of: one Constable and one civilian band 4 for four weeks and one Corporate Communications civilian band 6 for one week. 3.9 Blood Draw Processing Although the current legislation calls for DRE investigation or a blood draw, the costing estimates that the DRE will decide if a blood sample is needed and blood results could take up to 90 days to receive a result. Therefore, a preliminary estimate of 10% of the 1,271 estimated impairment draws was used at $75 per draw for costing purposes.

Unknown Costs 4.1 Return of Property The CACP outlined a major concern of the requirement to return seized property within sections 99(6) and 103 that requires, the Minister must, on application from a person with a valid property interest in a particular cannabis plan to plants, direct that the property be returned to the applicant or compensate the appropriate amount (source CACP i above, p. 5). The CACP has replied that the requirements to house, maintain or compensate the owner would create an onerous financial burden and remains an unknown cost for the purposes for these preliminary financial estimates. 4.2 Overtime Costs The financial implications of the Cannabis Act estimates have been developed showing costs excluding overtime. Given the numerous initiatives and timelines within the implementation, costs of additional overtime are unknown and could be significant if the priorities of the organization prevent on-duty time for any of the large initiatives. 4.3 Court Operations and Administration Under the current system, drug possession charges follow a process where a high number receive an unconditional release. An unknown risk is the impact on the court system and police costs therein, if possession above 30 grams is ticketed within the Provincial Offenses Act. YRP s concern is for unknown costs related to Officer time spent at court due to a high rate of disputed tickets. For youth possession, YRP operates under the principles of the Youth Criminal Justice Act for consideration of alternative methods through a referral diversion program. The YRP Community Services estimated Officer time to conduct the referral program is likely to remain at four hours in order to complete the recordkeeping, notices and consultations. The costs could be significant higher should youth possession incidents rise substantially under the Cannabis Act. i Canadian Association of Chiefs of Police (CACP), Written Brief to the Standing Committee on Health, September 12, 2017. ii National Highway Traffic Safety Administration (NHTSA), Impact of the Legalization and Decriminalization of Marijuana On the DWI System, DOT HS 812430, June 2017. iii Rocky Mountain High Intensity Drug Trafficking Area, The Legalization of Marijuana in Colorado: The Impact (Colorado), Vol. 3, September 2015. iv York Regional Police Business Intelligence System (YRP-BI). v http://www.city-data.com/crime/crime-seattle-washington.html, Crime in Seattle, Washington (WA) [Seattle]. vi York Regional Police, Uniform Working Agreement 2016-2019 (YRP-UWA). vii York Regional Police, State of Infrastructure Report, 2015 (SOIR), June 6, 2016. viii Northwest High Intensity Drug Trafficking Area (Washington), Washington State Marijuana Impact Report, March 2016.

Costs Associated with Legalizing Cannabis OAPSB Spring Conference May 23-24, 2018 Jeffrey Channell, Manager Financial Services e. 5460@yrp.ca t.(905) 830-0303 ext. 7098 1 Presentation Overview Legal vs. Illegal Use of Cannabis Advocacy & Timelines Research & Findings Road Safety Impaired Driving & Training Operational Impacts Service Delivery and Funding Challenges Financial Costing 2 1

Legal vs. Illegal Legal Up to 30 grams in public Adults permitted to share up to 30 grams Purchase from a licensed retailer Home cultivation of four plants Unlimited home possession Making food & drinks at home Authorized by healthcare professional - home/designated/licenced producer No offence for youth possessing five grams Medical vs. Recreational Consumption Medical Smoked or Vaped Medical Not smoked Not vaped Recreational Medical Authorized by health care professional Home/ Designated Producer Licensed on-line producer Consume in public Private Residence Public Place Workplace Vehicle Boat Yes- Passenger Private Residence Four Plants Unlimited dried product Food & beverages Private place consumption No, exceptions Only Recreational No, exceptions Ontario Cannabis Store or online Possession of 30 grams 30 to 50 grams ticketable offence Over 50 grams Criminal offence Driving Yes- Passenger Only No, exceptions Zero tolerance: < 21 yrs; Novice drivers; Commercial drivers 2 ng of THC per ml of blood 50 mg of alcohol per 100 ml of blood, with 2.5 ng of THC per ml of blood Ability impaired by cannabis 3 Advocacy & Timelines Federal legislation announcement of Bill C-45 & C-46 OACP Resolution calling for funding for the enforcement of the Cannabis Act CACP presentation to the Standing Committee on Health York Region Police Services Board & York Region resolutions April 13, 2017 June 14, 2017 September 12, 2017 November 15-16, 2017 Association of Municipalities of Ontario calling for a share of provincial taxes Federation of Canadian Municipalities calling for a share of excise taxes Members of Provincial Parliament & Ministry of Transportation Letters to, and meetings with, Members of Parliament, Senators & Health/Public Safety Canada November 30, 2017 December 6, 2017 January- February 2018 January- March 2018 4 2

Experiences of Other Jurisdictions Research The Legalization of Marijuana in Colorado, Rocky Mountain High Intensity Drug Trafficking Area Washington State Marijuana Impact Report, Northwest High Intensity Drug Trafficking Area Impact of the Legalization and Decriminalization of Marijuana On the DWI System, National Highway Traffic Safety Administration Written Brief to the Standing Committee on Health, Canadian Association of Chief s of Police Findings Increased cannabis consumption and a corresponding increase in demands on police resources for cannabis related enforcement and calls for service Increase in the number of Criminal Code and Highway Traffic Act offences associated with cannabis consumption and driving Will not eliminate the prevalence of organized crime in the production, distribution and sale of cannabis 5 Colorado Youth Usage Source: The Legalization of Marijuana in Colorado: The Impact Vol. 5/October 2017 6 3

Colorado Youth Usage Source: The Legalization of Marijuana in Colorado: The Impact Vol. 5/October 2017 7 Colorado Road Safety Source: The Legalization of Marijuana in Colorado: The Impact Vol. 5/October 2017 8 4

Colorado Road Safety Source: The Legalization of Marijuana in Colorado: The Impact Vol. 5/October 2017 9 Legalization Task Force Minimize Harms of Use Keep cannabis out of the hands of children Restrict access to cannabis Enforcing Public Safety and Protection Presence of organized crime Save time for the police & justice system Improve road safety strengthening impaired driving laws does not require the legalization of cannabis 10 5

Impaired Driving Number one criminal cause of death in Canada One driver in 18.5 RIDE spot checks tested* For each RIDE test, one driver in 6.4 is impaired* 0.84% of drivers impaired* 1,154 alcohol-related charges 92 (28 per cent cannabis) drug-related charges Colorado Experience: 26% increase in traffic fatalities within first three years Despite early public outreach, people are more likely to smoke and drive than drink and drive. Source: *YRP RIDE three-year average 2014/15 to 2016/17. 11 Impaired Driving Investigations Reasonable suspicion of drugs in a driver s body Standardized Field Sobriety Test and/or Oral Fluid Screening Test Positive Drug Test examination or a blood sample Zero tolerance for: Young drivers 21 and under Novice drivers (G1,G2, M1,M2) All commercial drivers To amend current defence counsel tactics related to the timing of alcohol consumption 12 6

Enforcement Training Needs All officers require one day of Cannabis Act C-45 & Impaired-Driving Legislation C-46 training - totaling 12,992 hours out in the field Up to 50 per cent of frontline officers will require four/five-days of Standard Field Sobriety Testing (SFST) Current strength of 49, only 60 spots available in 2018 38 Officers needed as Drug Recognition Experts Three-weeks of training - only available in the US Current strength of 15, only six spots in 2018 Laws have not yet received Royal Ascent: training standards and procedures cannot be developed 13 Operational Impacts Other Demands for Service USA states 6.2 to 12.3 per cent increase in crime; anticipated increases in break & enters, thefts, robberies/home invasions & mischief Other cannabis-driven calls for service are expected to include injured & missing persons Organized Crime Significant Presence of Criminal Organizations Production, distribution, importation/exportation Distribution via mail, air & ground Ontario, followed by BC, Alberta & Quebec Higher risk of shootings & homicides across Canada Up to a 2 per cent increase in use Higher THC; lower cost Corruption, youth, consumables Other illicit drugs: Cocaine, amphetamines, opioids Tobacco & Gaming - Continues to be an avenue for money laundering, source of violence 14 7

2017 Cannabis-Related Investigations 74% of people arrested for possession of cannabis were released unconditionally (without charges) 28% of Possession Charges were Youth 39% of Trafficking Charges were Youth Cannabis Consumption Medical Cannabis Source: Statistics Canada, Cannabis Consumption in Canada, 1960 to 2015 16 8

Service Delivery & Funding Challenges Ministry of Community Safety and Correctional Services Enhanced CPP Safer Communities Act Ministry of Education 17 Preliminary Findings Overview Gross cost of $5.92 per capita 2% of the Annual Operating Budget, nationally $188 million annually $6.7 million per year average or $20.2 million over three years (2018-2020) $6.2 million in one-time costs (2018-2020) $14.0 million in ongoing costs (2018-2020) $7.6 million in annual ongoing costs per year after 2020 Time to sufficiently train Officers will not meet the fall 2018 legalization date Preliminary estimates with ongoing information changes 18 9

Known and Mandatory Costs (In 000 s) 2018 2019 2020 Standard Field Sobriety Test Training $1,595 $1,913 $293 Drug Recognition Expert Training $110 $243 $51 Bill C-45/C-46 and Provincial Regulation Training Coordinator, Impaired Driving Training and Equipment $843 $43 $44 $129 $124 $124 Roadside Screening Equipment and Supplies $978 $366 $366 Total Known & Mandatory Costs $3,654 $2,689 $878 Cost per Capita $2.92 $2.16 $0.69 $7.2 million (2018-2020) or 35.7% of overall Cannabis Act costs. 19 Anticipated and Expected Costs (In 000 s) 2018 2019 2020 Drug Impaired Traffic Stops, Seizures and Violations $371 $756 $771 Motor Vehicle Collisions $181 $362 $362 Injured Persons $7 $14 $14 Thefts, Suicide, Break and Enter, Complaints, Robberies and Mischief $76 $154 $158 Criminal Investigations $76 $154 $157 Ride Spot-Checks $57 $58 $59 IT and Information Management Support $52 $0 $0 Provision for Drug Recognition Expert Premium $3 $9 $10 Total Anticipated and Expected Costs $822 $1,508 $1,532 Cost per Capita $0.67 $1.21 $1.21 $3.9 million (2018-2020) or 19.0% of overall Cannabis Act costs. 20 10

Best Practices Costs (In 000 s) 2018 2019 2020 Front-line Sector Model Policing $0 $0 $2,534 Illicit-market Disruption Team $839 $856 $873 Road Safety Enforcement $0 $1,032 $1,052 Patrol Supervision $0 $0 $386 Fleet and Equipment $16 $0 $1,056 Analytic Support $121 $124 $126 Business Intelligence Dashboard $42 $0 $0 Youth Education and Prevention in Schools $36 $17 $17 Blood Draw Processing $5 $10 $10 Total Best Practices Costs $1,059 $2,038 $6,053 Cost per Capita $0.87 $1.64 $4.77 $9.15 million (2018-2020) or 45.2% of overall Cannabis Act costs. 21 Unknown Costs Court operations and administration Return of property Overtime costs of implementation Availability Multiplier 22 11

Funding Announcements September 2017 $274M over five years, or $81M annually 70% to federal agencies: RCMP CBSA Increasing lab capacity Research Public awareness 30% or $16.2M annually to provincial and municipal police services: Oral fluid screening devices Training for SFST & DRE December 2017 Share cannabis revenues 25/75 per cent for the federal and provincial & territorial governments respectively Cap the federal portion at $100 million maximum; anything above $100 million would be distributed to the provinces & territories Review the agreement two years post legalization March 2018 $40M over two years or $1.40 per capita for: Policing Bylaw enforcement Public health Further enhancements: OPP training Specialized prosecution team Capacity at the Centre for Forensic Sciences Youth diversion, Intelligence hub Support to public health Awareness campaign 23 Preliminary Revenue Sources HST - Federal, $0.40, 4% Excise Tax, $0.50, 6% HST - Provincial, $0.64, 7% Example: $9.04 per gram, including HST Retail & Distribution, $7.50, 83% Retail & Distribution Excise Tax HST - Federal HST - Provincial 24 12

Questions? 25 York Regional Police participates in Social Media 26 13