by BETTER FARMING STAFF
Ottawa lawyer Donald Good says if the Municipal Property Assessment Corporation can classify Gordon and Lynda Lorentz’s alfalfa pelleting plant site as industry, it can classify and tax almost any farming activity accordingly.
Good represented Lorentz Farms Limited in Superior Court in London last fall as owners Lynda and George Lorentz sought leave to appeal the classification of their alfalfa pelleting plant west of St. Clements as industrial. This week the court justice ruled for the Assessment Review Board, which backed up MPAC’s classification.
“We are definitely not happy with this judge’s decision,” says Lynda Lorentz.
Good believes there are implications for all farming operations. If the definition of processing is adding value to a product “then it is not a big stretch that anything a farmer does could be industrial and all farming could be industrial.”
Good thinks the next step for farmers must be political and their farm organizations must get involved. There are exemptions to the rules for agriculture but “they are not well defined. They are not even well understood.” He mentioned maple syrup and horse farms as examples of groups that were reclassified and fought back.
George Lorentz says they dry their own alfalfa and sell the pellets to local feed mills. He sees no difference between his farm and those where farmers dry their grain and take it to the elevator. Issues with reclassification began after the mill was rebuilt to make it easier for their son to work in. He lost his hand in a harvesting accident in 2000.
“At the start it was just phenomenal,” George Lorentz says. “Every bin over a certain size was going to be charged as a building.” On their lawyer’s advice they withheld paying property taxes and, at one point, were close to $140,000 in arrears over two and a half years.
The tax bill is considerably lighter now, George says. Annual property taxes on the 2.6 acre mill site are about $9,000. He thinks it’s still too much and the emphasis on “processing” bothers him.
“What part of farming isn’t processing?” he asks. “You take hay off a field, it’s a process. You put in a mow, it’s a process. You take it out of the silo, it’s a process.” BF
Comments
How many similarly-sized alfalfa pelleting mills are there in Ontario, and how many of them are classified as farms for property tax purposes?
It would seem to me that if the Lorentz operation was to be the only firm of its kind enjoying the farm tax classification, the Lorentz operation would then have an undue, and therefore unfair, financial advantage over their competitors.
If Lorentz is arguing for a financial advantage only his firm would enjoy, then I don't have much sympathy for his position, nor should I.
Stephen Thompson, Clinton, ON
Mr. Lorenz's $9000 tax bill for the type of operation is a pretty good deal - I wouldn't be complaining. A typical homeowner will pay $3000 to $5000 in taxes and realize no income from the property. I,m going to play devil's advocate and suggest perhaps that a "large" grain handling system should be taxed as industrial.
If you really want to play devil's advocate
Why are farmers paying $8000- 12000 per acre for ontario land to grow crops on and get Ontario farm tax rebate. Today's farmers have become greedy asses more unlike previous generations
I am advised the Lorentz alfalfa processing mill is the only mill of its size and type which won't be taxed on an agricultural basis. However, I don't have a great deal of confidence in what I have been advised, in that, for example, I have some doubts about the farm property tax basis of the very-much operational Lang De-hy plant just west of Teviotdale, and which doesn't seem to be part of any type of nearby farm operation.
It would still seem to me the Lorentz family would be better-served by avoiding arguments about what is, or is not, a farm, and/or arguments about what happened 50 years ago, and argue about "principles of fundamental justice" when it comes to what their competitors pay in property taxes.
I've appeared before more than a few Superior Court Justices, at various times, and for various reasons, and I've never found any of them to be the least interested in the type of "slippery-slope" arguments the Lorentz family puts forward. What's worse for the Lorentz family is that any appeal has to be based on errors in fact, or law, and not on anything else, especially any "slippery-slope" type of arguments.
More to the point, if farm organizations get involved, and turn this into a political dust-up, things could quickly go from bad-to-worse, in that somebody could probably quite-easily come up with an example of a 200,000 bushel farm-based grain elevator being taxed at a much lower rate than a 100,000 bushel elevator in a nearby town, thereby giving the farm elevator a significant financial advantage over the elevator in town.
It's like this - the Lorentz family lost, and unless they can make a successful appeal based on errors in fact or law, they're stuck with the decision, and the thing for them to do is make sure the property tax status of their farm-based competitors changes accordingly.
Stephen Thompson, Clinton, ON
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