Recently my local municipal Council has, like many other rural municipalities set their annual budget and have noted that due to lost revenue from the Provincial Government have had to raise our taxes. This has been an ongoing problem for such municipalities for four or five years now due to the “downloading” of the Farm Tax rebate and Managed Forest tax rebate program costs to said municipalities. Prior to 2006 the province paid for these tax discounts directly and promised to compensate the townships for such costs when they changed the manner of administering the program for the 2008 taxation year.
Since that time there has been a steady dwindling of funding returning to rural townships to cover the reduced taxation on these properties (such rebates are MANDATED by the province should property owners apply for same). The Association of Municipalities of Ontario says that “Today it pays only $65.8 million, about one-third of the original amount allocated” and that “ the total amount of the tax rebate that municipalities would expect under the original plan, because of higher assessments, has ballooned to $253.2 million, almost four times what the province pays rural municipalities now. Municipalities have had to come up with a whopping $187.4 million from other tax sources to make up the difference.”
More specifically - North Dundas a municipality “heavily dependent on agriculture which collected $13.1 million in taxes in 2009, is short $800,000 in tax revenue because the province has reneged on its promise to pay the full tax rebate.”
“North Dundas is not alone. SDG collected $31.2 million in taxes last year but lost $4.4 million or 14 per cent of the revenue because of the decreased farm tax rebate.”
“Prescott-Russell County is losing almost as much as SDG. Areas with an agricultural base are highly affected. Some of the rich agricultural counties like Middlesex in western Ontario have the same problem.”
“In the Municipality of Brighton, (they) get nothing from the province. The reneged deal means the township has to collect $140,000 more through increased property and industrial taxes.”
“Kawartha Lakes collected $908,789 from eligible farmland and managed forests in 2009. But if the land had been taxed at the full tax rate, the city would have received $3.6 million. The consequence was the $2.6 million shortfall that Kawartha Lakes believes should have been paid by the province was charged to local property and business owners.”
And in my own Township of Chatsworth, Mayor Greig says “They lost 273 thousand dollars in Ontario Municipal Partnership Funding and another 400 thousand from the farm tax rebate program. ……. the shortfall translated to 12.7 per cent of their budget.”
“He says the province's new funding formula is seriously flawed and "it's almost criminal what they're doing".
For those that are unaware of this program and the way such tax rebates work here are a few details:-
Farm properties satisfying the eligibility requirements are taxed at 25% of the municipal residential tax rate. The farm residence and one acre of land, surrounding it, will continue to be taxed as part of the residential class.
OMAFRA has the responsibility to determine and report eligible properties to the Municipal Property Assessment Corporation from property owners submitting the multi-year application.
To be eligible for the Farm Property Class tax rate, the following criteria must be satisfied:
The property must be assessed as farmland it must be part of a farming business generating over $7000 of gross farm income and be reported to Canada Revenue Agency. The farm business operating on the must have a valid Farm Business Registration number. More than 50% of the property must be owned by Canadian citizens or permanent residents of Canada. If the property is owned by a business which is a sole proprietorship, the owner must be a Canadian citizen or permanent resident.
To receive the Managed Forest tax rebate the property owner must submit an approved forestry plan (renewable every 5 or 10 years) and the plan and forest must be reviewed by a licensed forestry technician for approval and renewal. The plan can only be applied to properties over 10 acres and a minimum of one acre surrounding any residential areas cannot be included. It cannot be applied to “commercial operations” and a minimum density of trees also is required.
Until recently Townships have been quietly lobbying the Ontario government to stand up to their promises to fully compensate municipalities for said rebates because “.It’s an issue we hate to bring up because it can reverberate back on farmers. Some people think farmers should pay the full tax rate." No doubt some of our urban cousins will be of that opinion, but such a point of view shows a lack of understanding of the plight of our farming community (particularly the family farm) and perhaps a lack of acknowledgment of the need for the preservation of forested lands for future generations health and well-being.
I submit to you that our farms and forests are critical for the future of all citizens in Ontario, indeed Canada, and not just the “local municipality”. If we are to have a tax incentive for these lands to continue to produce the food we eat and clean the air we breath (and I believe we should) then the cost of such programs must be spread across all those that benefit, and that includes residents of both rural AND urban areas. The rural population and farming population is steadily declining and such extra costs spread out over a small sparsely populated(by urban standards)area can be considerable.
It seems that the Ontario Government has already made their choice, rural municipalities are to be ignored, don’t fund their costs for provincially mandated programs, override their zoning bylaws and motions regarding wind turbine installations, enforce expensive water testing regimes and food processing regulations without regard to the effect upon the struggling rural areas. After all those rural folk are totally outnumbered by the urban population so their vote counts for little. By the time oil prices go through the roof, terminal seed terminates our crops, countries cease to export food in order to feed their own and urban populations look to us rural folk to feed them it will be to late. Multinationals will own all the land, our villages will be “retirement communities” and few will be left to care for our farms and forests.
Pessimistic, you bet, but it’s increasingly looking like a more lightly scenario.
I’m “Rural” and will do everything I can to remain so.
With extracts from
http://propertylimit.com/Prop_Farm_Properties.html
http://www.farmersforum.com/APR2010/p12.htm
A request for further information from Chatsworth Township did not receive any response.