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Motion to change Farm Tax Ratio defeated

UPDATE JAN 24:

The motion to change the Farm Tax Ratio, accepted unanimously at the last committee of the whole meeting, was defeated Tuesday night at council.

In a recorded vote 9-7, councillors who stated they wanted to support farmers but changed their vote, cited difficulty making the decision following numerous conversations with constitutents by phone, email and social media; a growing divide on the issue in the community; a lack of complete information and the need for more in depth information.

A few, upon learning MPAC announced the coming increases in 2012, were disappointed the issue had not been brought to council years earlier. A few also noted the farmers do have support and recourse through the Ontario Farmers Association and MPAC itself, through appeals.

Mayor Robert Quaiff said he has already booked meetings to gain more information with ministers and senior policy advisors related to the issue at next week’s ROMA (Rural Ontario Municipal Assocation) conference in Toronto.

Council did approve the motion that the Agricultural Advisory Committee investigate programs available, or that may be implemented to assist and encourage viability of young farmers and tenant farmers within the County as a result of the increase of farm tax property assessment.

Those opposed to the change in farm tax ratio included councillors Gale, Graham, Roberts, Turpin, Dunlop, Epstein, Ferguson, Fox and Mayor Quaiff.

* * *

UPDATE: As requested, a staff report on this issue was requested for a Committee of the Whole meeting in January.

Federation of Agriculture to suggest easing hardship on County farmers

The Prince Edward Federation of Agriculture will tell council it has serious concerns about the current Municipal Property Assessment Corporation (MPAC) assessed farmland value increases and the potential impacts that on farm families and associated business.

John Thompson

John Thompson

“We are asking council to take a very logical action to mitigate the damage,” said John Thompson, federation president, who is to be addressing council on behalf of the federation Tuesday at Shire Hall.

He is to present a formula to councillor to avoid a “property tax shift” onto farmland property owners for the next four years.

“We note that this request is not a tax break as farm property owners will still be paying more taxes each year, they will simply be paying the same 1.8 per cent of County taxes. The effect of these changes would raise the tax cost to residential properties including farm residential by about 0.4 per cent annually.”

“In the recent MPAC notices the taxable assessment of Ontario farmland has increased about 70 per cent. The Prince Edward County current value assessment has increased by an average of 112 per cent while residential values here have increased by about seven per cent,” Thompson notes in his deputation. “There are many factors involved in the sales at higher prices, but the income from farm commodities has been decreasing for four years. If increases were just driven by earnings, land prices would be in decline and this may in fact be the future.”

He shares an example from the previous drought year in 2012 when the North American fall harvest price for grain corn was about $8 per bushel USD, and this year, he says, is about $3.50 as the drought was local so did not raise the commodity price. He adds farmland prices in Iowa have declined for the last three years, a first in three decades.

“If no action was taken to address the high assessed values, the percentage of County taxes collected from the farm tax would rise from the current 1.8 per cent to 3.4 per cent by 2020 and our farm families would be facing a farm tax increase of around 100 per cent,” said Thompson. “This would be a hardship for many farms and would seriously impact the funds available to fund family life, as well as the current expense and capital needs for business retention and possible expansion.”

Thompson notes that when there was a major increase in residential values, it was possible to mitigate this with a decrease in the tax rate as the residential tax class makes up the majority of the County tax roll. But he says this will not be possible in the current situation with the farm taxes making up a small portion to the budget.

“The province caps the farm tax ratio at 25 per cent of the residential rate as the farm properties do not consume much in terms of municipal services. For example, a farm house on 100 acres does not need more services than a house on a residential lot and the farm residence is taxed at the residential rate. The farm land and buildings do not add much to municipal costs and we believe that services to people should be paid by the residential tax portion and services to farming by the farm tax. We see the current tax ratio of 25 per cent as being fair in the past and studies have supported this.”

He suggests that to avoid a property tax shift onto farmland property owners, adjustments to the tax rate would be required. Using calculations by a staff researcher with the Ontario Federation of Agriculture using all information currently available, he suggests the following formula:
2017 – 20 per cent
2018 – 17 per cent
2019 – 14 per cent
2020 – 13 per cent

“We recommend that council support farm families by taking this initiative for tax fairness, business retention and growth potential.”

Council meets at Shire Hall Tuesday, at 7 p.m.

Filed Under: Local News

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  1. Fred says:

    Should Councilor farmers or Councilors whose family own farmland been allowed to take part in discussion or vote? Should there not been a declaration of pecuniary interest?

  2. Emily says:

    Scary thing is they almost pulled it off. I couldn’t help but notice the Ameliasburgh trio voted in a “block” again. Can only hope the upcoming OMB pulls the plug and rules for voter equity in this County.

  3. Emily says:

    Scary thing is they almost pulled it off. I couldn’t help but notice the Ameliasburgh trio voted in a “block” again. Can only hope the upcoming OMB pulls the plug and rules for voter equity in this County.

  4. Dennis Fox says:

    So the OFA expected residential taxpayers to believe that having their taxes raised by 0.4 percent is a benefit? Only when pigs fly!

  5. Chuck says:

    You can kick the word subsidy down the road like a tin can and call it something else but an economic benefit such as a tax allowance is typically called a subsidy. In this case a benefit to a party that was gaining equity wealth caused some sober thought and reconsideration.

  6. John Thompson says:

    The false narrative seemed to be that this would be a subsidy to farmers rather than a proposal to prevent farm land from taking on an increasing share of County expenses by paying 25% increases for 4 years resulting in a 0.4% benefit to residential. It’s over, at least for now.

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