by SUSAN MANN
As farm assessments rise, so too do farmland taxes. And even though municipalities have the power to ease the tax burden on farmers, the challenge, as the Ontario Federation of Agriculture and its county federations are finding, is convincing them to do so.
Federation president Mark Wales first raised the issue about a year ago when he wrote in a Jan. 25 column that it was time municipalities give due “consideration to where residential tax rates need to be to fund their share of services and infrastructure and adjust the overall weighting of farm tax rates to reflect a fair proportion of the bill.”
Farmland values have significantly outpaced residential values and that is pushing taxes for farmland higher if they’re not adjusted fairly, Wales wrote.
Since then, the Ontario federation has been working with its county federations to request the county councils decrease the percentage of the residential rate that’s used for farmers to pay taxes for farmland. Municipalities have the authority to set the farm class tax rate at a maximum of 25 per cent of the rural residential rate. The provincial government has also given municipalities the flexibility to set it lower than 25 per cent. All farmers in Ontario pay the full residential rate on their residences plus one acre of land.
Mark McDonald, chief administrative officer for Elgin County, says for their municipality many county councilors are farmers and “may have experienced rises in assessment.” And while the Elgin Federation of Agriculture has twice approached county council to request the farm class tax rate be decreased, council has declined the request.
“County council came to the conclusion that we’re not going to shift the burden to other property classes in order to lower the farm tax ratio,” he says. Years ago lakefront properties in Elgin County were hit with huge assessment increases but council didn’t ask farmers to share the increased tax burden lakefront property owners were facing. The municipality can’t give farmers “a break now when we didn’t give those residential properties a break several years ago when they got hit with increased assessments.”
McDonald says any assessment increases are phased in over the four years of the assessment cycle, to ease the process of adjustment. “We realize it isn’t perfect but that’s the system we’re living with.”
Elgin County council didn’t want to shift the burden away from the farm class tax rate “to residential, commercial or industrial any more than they already have. I guess the bottom line is they felt the 25 per cent rate is fair,” McDonald says.
It’s true farmland doesn’t use municipal services, such as public health, libraries or garbage collection, but that’s why the tax rate for it is at 25 per cent of the rural residential rate and the residential rate is at 100 per cent, he says. “There’s already recognition they aren’t using certain services at the same level as a residential property.”
Some counties, such as Chatham-Kent at 22 per cent, already have a farm class tax rate that’s lower than 25 per cent of the rural residential tax rate. Wales says in a recent telephone interview some councils have had the lower rate since the mid-1990s when there was a push across Ontario to amalgamate municipalities.
The reassessments for 2008 to 2012 released by the Municipal Property Assessment Corporation (MPAC) showed that on average across the province farmland went up by 53 per cent, Wales notes. The next reassessment cycle is from 2013 to 2017, and “unless there’s a crash of some kind, we’re going to see another massive increase because eventually it has to catch up to where land is trading at.”
In comparison, rural residential assessments for the same time period increased by an average of 13 to 15 per cent across Ontario, he says.
MPAC is a non-profit corporation that’s responsible for property assessments in Ontario.
Wales points out that in many cases farmland is actually selling for more than it has been assessed at. For example, in his township, Malahide in Elgin County, productivity Class 1 land (the top class MPAC has for farmland) has been assessed at about $7,400 per acre but it’s selling for more than double that. MPAC’s productivity classes for farmland are slightly different than the Canada Land Inventory soil classification system but they’re based on it, he says.
In addition to its concern about the impact increased assessments are having on farmers’ property taxes for farmland, the federation is also concerned about the method MPAC is using to do the assessments. Wales says there are too few sales that are being used to determine farm assessment values in some parts of Ontario and that’s resulting in inaccurate data.
The federation is working with MPAC and the Ontario Finance Ministry to improve MPAC’s processes. “About half of all of the areas in Ontario don’t have enough sales to be truly statistically valid,” he says.
One suggestion the federation has to fix the problem would be to increase the sample size by using farm sales data from a larger geographic area. BF
Comments
It really is incredible.
Farmers are the ones driving farm land values up and somehow they believe that they should be given a special exemption from the tax increases that have always been tied to the increase in land price.
If you can afford the absurd price of land then you can afford the higher taxes.
Unfortunately even the ones that aren't buying land get sucked into higher taxes by fellow farmers that are.
Once again then only one to blame for this is farmers themselves...suck it up already!
That is just the nature of farming ,run rent,land prices up,expand livestock and if things don't turn out well then ask for Gov't assistance .The larger you are or more you produce the more you get. I have received and appreciated Gov't support . As a group we are pretty lucky as from property taxes to crop ins. to RMP we receive support . Some will argue all mfg. and other sectors receive gov't benefits which is true and we need Gov't assistance too compete with other countries subsidies. We have too ask ourselves what Farming would look like today if we had not had these programs. Would there be more diversified farms or just a handful of large operations left? The real person that bears the brunt of everything is the working person who is not in a Civil or Union job position with no benefits or pensions that is trying to live and raise a family at a $15 hr. job-kg kimball
If a person owns some land ,but, not qualify to be a farmer due to lack of income- Does he pay the the full land tax and qualify for no part of the 75% refund?
Correct, but often people cheat and get their neighbor or farming friend to sign the farm tax classification paper saying their farming the land, which then still qualifies the land for farm use at the 75% reduced rate.
Sean McGivern
Often people cheat? Those kind of statements hurt all farmers. Making blanket statements like that is slanderous to every farmer in Ontario. IF it happens, and I do not know anyone that employs those tactics, I doubt very much it happens often as you publicly state.
I am in full support of farm land having a lower tax value then residential property for so many obvious reasons, but i think the exemption should be raised to reflect the current state of agriculture $7,500 is only equal to six beef calf's Should some one only raising and selling 6 beef calf's a year or 3 fresh milk cows, or 3 litters of market hogs be considered a farmer?.
I personally feel that the farm tax rebate should be based on a figure that is tied to some thing, for example your farm must at least have sales equal to or great then minimum wage so your farm would need an amount equal to minimum wage (40 hrs a week x $10.25 x 52 weeks =$21,320) then you'd qualify as a farmer and are entitled to all farm subsidies and programs. Instead we have all kinds of wealthy land owners who do little or no farming capturing all kinds of tax dollars to subsidize there wealthy lifestyle at their country estate. I also would support a 3 year time period for new farmers to get up to the increased amount.
Sean McGivern
Any farm land regardless of acreage or if it is owned for estate lot purposes, that IS zoned for Agriculture production and farmed by a beginning or existing expanding farmer should be taxed as farmland. End of discussion.
Needs an adjustment of base , most can still get it if they have some land they can rent to a Farmer - Sean is coming around
Sean McGivern is the president of Practical Farmers of Ontario. He is supposed to be the Advocate for Small Farmers. I suspect the majority of the PFO membership would never be able to meet his $21,320 farm tax rebate qualification.
You can't have it everyway ... talk small farm acreage but you supposedly farm 2000 acres, want to be labelled organic but not certified, raise grass fed beef but treat them with Ivomac...stay true yourself
Cathy McGregor-Smith
Mrs, McGregor- Smith, always seems to be so angry, and confrontational and really upset with any one who has different values, methods, or reasonings then she does.
I don't claim to be a small farmer, i do claim to be a diverse farmer raising livestock and growing 8 to 10 various crops a year such as, wheat, rye, corn, soybeans, spelt, oats, barley, hay and some spring or fall seeded variations of those crops.
As for Her lack of knowledge about the type of farmers who are members of the PFO, its clear that she knows next to nothing about them since the vast majority of the members are actually full time farmers who would easily have enough annual sales to equal that of the annual salary of a min wage worker.
As for her accusations that i want to be labeled organic although i own a business that markets organic grain for other farmers and that i am strong supporter of organic agriculture certified or not, i myself have not been farming organic for a few years now and any one who reads these blog posts already knows that, since I have stated that several times on here. When a Canadian supplier in Quebec brought in non organic beans and sold them as organic and the organic soybean price plummeted, I like many other organic farmers decided to switch back to conventional farming because we could not, grow organic crops and sell them for only a few dollars above the price of conventional soybeans and continue to be a viable business.
Secondly i sell 100% of my beef at the local auction mart as 500-700 lbs calf's and they are listed in the catalog, with all the shots they receive, so i am not sure if Mrs McGregor-Smith is short on time and has nothing better to do then make ridicules accusations, but i would encourage her to spend her time focusing more on happier things then always trying to belittle and run other farmers down. Its is one thing to debate an issue and have differing views i encourage and welcome sound debate but i have zero time for running other individual farmers down for their choices. I can hate their production methods but that doesn't mean I hate the individual, there is a huge difference.
She is bitter because I am not a supporter of supply management and since she is a quota owner she is always trying to defend her self in the alternative farm community for buying into the industrial food system.
But trying to smear others will not change her situation one ounce... Come on Cathy rise above these foolish comments and be honest and forthright with others....
I am sorry if you don't think farmers should be at least able to make min wage to qualify for farm programs, i see agriculture as a career not as a hobby that should be prompt up by tax payer dollars, this is why i did state in my previous post that i would be 100% in support of a 3 year period to allow younger or new farmers to build up to the increased amount. I also mention that the exemption needs to be based off some formula rather then some artificial amount of $7,500 how was this number arrived at ? and why has it never changed for years even tho inflation causes prices to rise every year ?
Cathy let's hear some logical arguments from you that are based on sound knowledge not on foolish immature smears .... Lets move agriculture forward by good debate and forward thinking....
Sean McGivern
Sounds like she had some valued points !
If the $7500 was raised to say $22,000 then this would eliminate thousands of people that own a place in the Country and don't really farm. They pretend to farm for lower taxes and to cash in on the multitude of incentive and subsidies available to real farmers.
Real farmers don't want this extremely low limit of $7500 raised because it will eliminate the thousands of people that use farms as a tax loss and thus lower the average farm income.
A rise in statistical farm income could lead to less taxpayer funded programs for already rich farmers.
The farm tax rebate eligibility # of $7500.00 dollars will not like be changed any time soon . It would eliminate too many general farm organization members . Hence lower their incomes unless they can keep those people buying affiliate memberships for those chasing tsc discount days and such .
As for Sean and PFO they are at liberty to say what they want as they are not an accredited farm org relying on income from members who get the farm tax rate through their FBR registration . For that I will give PFO credit !
Most people that know me think I am a happy supportive person. Over the last 35 years of full time organic farming we have help so many other farmers and gardeners and food banks and community gardens etc.....that makes me happy.
Our farm business has employed many people over the years, they think we are happy people to work for. It makes me happy to have built a financially sustainable farm business and to work side by side with my husband everyday.
I will free myself from this forum and it's negativity and continue on with my happy life.
Cathy McS
Very wise. A lot more people are ignoring the bitter band of 4.
Your comments are just so sad, Mr. McGivern.
I met Cathy and her family decades ago. Her mother was a very gracious hard working person that gave far more to the community than she ever received, as did other members in the family.
Cathy is cut from the same cloth. I do not know her as "angry and confrontational" nor "bitter".
Personal attacks, such as the one above, just undermine and divide the farming community.
If you understood agriculture, you would know that it is not a career. That is your first mistake. How can you move forward if you don't know what agriculture in Ontario truly is?
joann vergeer
Comment deleted by editor
Qualifying as a farmer, is an incorrect terminology.
To qualify for a farm business tax classification, there are certain criteria that should be met. I understand that exemptions are made if some farm businesses cannot meet the criteria. Call OMAF and they will walk you through it. They are extremely helpful in this regard.
There is no tax rebate.
The municipal tax rate is based on the residential rate and other classifications are based on the res rate. Farm business classification is set at 25% of the res rate in most of Ontario at this time.
Remember that when you pay municipal taxes you are actually subsidizing a corporation. Municipalities are creatures of the province.
if you are not on omaf program yes it's a program then you farm for yourself and apply to your municipality for a rebate up to 100% if you don't receive services. it's a secret that i will be letting out as a reporter for yourmunicipality.ca see section 21 (1) of the assessment act . my municipality piss me off and i started to read the act enjoy. Norm Boisvert
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