Just a New Property Tax?

1997 enabling legislation for municipalities, school boards arouses farmer's concers

By Robert Irwin and Don Stoneman

At one time if, you asked folks around Russell County how to find the Blanchard family, you would probably be told to watch for the distinctive Holstein cow mailbox at the end of their lane. Nowadays the cow is sporting a few rust spots and has been overshadowed by their new barn, one of the last in Russell County to escape an insidious municipal cash grab. That barn is quickly becoming the symbol of the family's role in sounding the alarm about a new tax based on square footage of new buildings.

Two years ago Queen's Park passed the Development Charges Act, which allows municipalities and school boards to impose charges on new development. This legislation was put in place to allow fast-growing municipalities to cover the costs associated with the appetite for such new infrastructure as recreational facilities, roads, sewer systems, libraries and schools.

Last August, when Helene Blanchard went to pick up a building permit for an addition on the family's dairy barn, someone in the municipal office let it slip that it would cost an extra $1.24 per square foot if she were a couple of weeks later. At the time Russell was already charging $0.15 per square foot. Blanchard, who was recently elected Russell Federation of Agriculture president, notified county members as well as Ontario Federation of Agriculture officials. The issue is headed for an Ontario Municipal Board hearing.

"Just across the road is the Nation municipality where they pay no such tax," complains husband Reynard Blanchard. "How are we going to compete with our neighbours?" He says the tax bite would have been $4,448, or about half the cost of his new 40x80 tarp structure for hay storage.

As word leaked out to an outraged farming community, the county backed down a little by reducing the tax to $0.62 per square foot.

These charges are clearly aimed at commercial and residential development, says Thamesford area farmer David Older, chairman of the Ontario Federation of Agriculture's finance committee, which is taking a hard look at the situation immediately.

Simcoe County's public school board recently approved a similar levy to be applied to new farm buildings. Oxford County narrowly avoided instituting development bylaws that would have been deployed on farm outbuildings, says Older.

Any of these charges, regardless of how low they are set, is a precedent in the wrong direction," he says.

The legislation made its way through the Provincial Legislature without creating a ripple in rural Ontario because it didn't seem likely to be applied to agriculture, says Derek Burgess, a research associate with the Ontario Federation of Agriculture (OFA). Older agrees. He has read the documents released by the provincial Ministry of Municipal affairs and he doesn't think that agriculture was targeted by development charges. "It seems obvious to me that it was aimed at urban, and industrial and commercial, development," Older says. Agriculture was not "in the spirit" of the new act.

"I'm not opposed to municipalities being able to meet new costs that are incurred by new growth," he says. "Where I object is where there is no connection between new costs that municipalities are incurring and new growth. Farm outbuildings are a clear example of that."

In addition to their hay storage building, the Blanchards squeaked in ahead of the new levy with a 40x150 foot addition to their dairy barn. The addition won't mean more cows, They simply wanted to increase comfort for their existing animals by widening stalls from 3 1/2 feet per animal to 4 1/2 feet. "We don't affect the services," Blanchard insists.

Oxford County was going to implement a charge of as much as 60 cents per square foot on new development and there would have been an opportunity for lower-level government to implement an additional levy as well.

Older says an average-sized new chicken barn would have had an additional $20,000 in costs added to its construction. "It was a very considerable hit if we had it at that level," Older says. But he points out that, regardless of the level of the charge, it is unacceptable in the farm community. And the manufacturing sector has a statutory exemption from the act. "You can expand your manufacturing site by up to 50 per cent without incurring any development charges, and you can do it as often as you like," Older says.

Cecil Bradley, head of research for the OFA, says the charges seemed reasonable at the time. "It took the pressure off municipalities which would have to pay for servicing of new subdivisions, along with libraries, nursing homes and so on. Municipalities are wondering where they will get the money to do that.

"Our concern would be, is this property tax by another name? Is it genuinely a charge related to new development that constitutes an incremental burden to municipal infrastructure? It's an arbitrary revenue measure in that kind of situation."

Derek Burgess has catalogued places where development charges have been implemented and the extent to which municipalities have gone to generate revenue-- and where they have implemented charges in the original spirit of the legislation.

The legislation was changed in mid-1997 and left an 18-month window for municipalities to get their bylaws in line. That closed August 31. A lot of municipalities were setting new bylaws towards the end of the summer. In a few cases these included a charge on agricultural buildings where there had been none in the past.

Burgess believes that municipalities can still pass a development charge by law at any time. Farmers must be on the alert.

The Simcoe County federation is fighting development charges being imposed there on farm buildings by the local school boards. Federation director Helga Elie of New Tecumseth, near Alliston, says the local public school board voted by a narrow 5-4 split to impose a charge on agricultural buildings. "That's not the end of it," Elie says. "We will pursue the issue adamantly. We'll take it to an Ontario Municipal Board hearing if necessary."

© copyright 1999 AgMedia Co-operative Inc..

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