Grain elevator tax class disputed

Wednesday, June 1, 2011

by BETTER FARMING STAFF

The organization that represents Ontario’s agribusinesses wants changes to property tax classifications for grain elevators.

It has been a long simmering issue for the Ontario Agri Business Association that first began to steam when the elevators’ classification was changed to industrial from commercial in 1998 says Ron Campbell, the association’s operations and member services operator.

“The difference between industrial and commercial taxation levels is significant,” says Campbell. A statement prepared by the organization says elevator operators “have seen their property taxes spiral by up to 20 times.”

The issue does not affect a farm that might have storage that’s just used for that operation. “It’s considered farm and it’s taxed accordingly,” Campbell says.

Campbell notes that not all elevator classifications have been changed to industrial. Once they are, there is the potential for drying and storage costs to go up for farmers.  Campbell did not know how many elevators in the province have already been changed to the industrial classification.

Concern about rising costs is one of the reasons why the Grain Farmers of Ontario is supporting the association’s request to reclassify the elevators as commercial, says Erin Fletcher, Grain Farmers’ manager of public affairs and communications.

On May 18 the organization sent a letter about the issue to Dave Levac, a Liberal MPP representing Brant. The business association had identified Levac as the person who was taking the lead on the issue, Fletcher says.

Along with worries about costs being passed on to farmers, Grain Farmers is concerned that the shift in classification could set an unwelcome precedent for classifying other farm-related activities.

“If they’re looking at grain elevators, then who’s next?” Fletcher says.

Campbell says the business association has argued that the industrial classification applies to a manufacturing process where raw ingredients are brought in to make “something completely different. And the elevators don’t do that.”

The business association is also calling for changes to the provincial Assessment Act regulations that would allow different types of storage structures used by agri-business to fall within the industrial class. He uses grain bins at a feed mill as an example.

“We’re trying to meet with some MPPs, similar to what we’ve been doing the last few years, and make them aware of the issue and hope that they’re able to do something about it,” Campbell says. So far, the organization has approached only the Grain Farmers for a letter of support.

According to the business organization’s statement, a 2002 report by Marcel Beaubien, a former Lambton-Kent-Middlesex Conservative MPP, recommended the elevators be returned to the commercial application: “In 2003, both the provincial ministers of finance and agriculture expressed a clear desire to move forward on the issue,” the statement says. “Since this time, on an annual basis, the association has met or corresponded with the minister of finance and MPPs requesting immediate action on this important agribusiness issue.” BF