Ont. farmers see profits swallowed by taxes

The average land assessment is expected to rise 45 percent this year, which means a big tax hike

RODNEY, Ont. — Farmers will soon shoulder far more of the municipal tax load in Ontario, which doesn’t sit well with the agricultural community.

“What we’re asking the province is give the municipalities more options of what we can do for our local economies,” said Ron Holman, president of the Rural Ontario Municipalities Association.

Holman said his municipality, the Township of Rideau in eastern Ontario with a population of 10,000, is fortunate. There is a small and valued farming community, but the lion’s share of taxes is picked up by the owners of waterfront properties.

His community has 32 lakes and large part of the historic Rideau Canal that stretches from Ottawa to Kingston on the St. Lawrence River.

West Elgin is a different story. It’s located in rural southwestern Ontario where agriculture is by far the largest economic driver.

“Agriculture really has changed,” said Bernie Wiehle, mayor of West Elgin, a municipality with a population of around 5,000 that encompasses three former townships and three former towns.

“As farms have gotten larger and more specialized, it’s taken some of the population away from the rural community. The farmers that are left certainly support the local businesses but that hasn’t necessarily saved the local communities.… A lot of what needs to happen with our small towns is to have development right in the towns. The government needs to get out of the mindset that all development, commercial and industrial, need to be in large urban settings.”

Another concern are provincial restrictions on severances in rural Ontario. They’re intended to maintain farmland, although farmland continues to be gobbled up as the big urban areas expand.

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Wiehle said rural depopulation has been an unintended and unwelcome consequence of the policy.

He said the provincial decision allowing vacant farm residences to be severed from the farm has, to a small degree, helped communities such as West Elgin maintain their population, but more could be done.

Holman agreed.

“There is farmland that should never be severed, but there are other places where more severances could be allowed. If part of a farm is not suitable for farming, why not let it be used for some other purpose?” he said.

“I’m not suggesting we take high quality farmland and break it up.”

Ben LeFort of the Ontario Federation of Agriculture’s policy research group, also said the economic diversification of rural communities is important.

“As commercial and industrial exits, it puts more taxation pressure on residential and farm properties,” he said.“ It can’t all fall on farms and residential.”

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It’s a property assessment update year in Ontario. Farmland changes are to be released in October and will reflect the price increase that’s engulfed southern Ontario for the past few years.

Property assessments in Ontario are determined by the Municipal Property Assessment Corporation. As assessments increase, so do taxes, although it’s not a one-to-one ratio.

The average farmland assessment was up by more than 50 percent in 2012, LeFort said. This year, the increase, which is expected to be announced in October, will work out to around 45 percent.

A half hour from Rodney, Jay Cunningham works with his wife to adjust the packers on their cultivator. He doesn’t have time for more than an off-the-cuff comment.

“It’s a tax grab. That’s really all it is,” he said. “It’s sad we have this on land that doesn’t receive a lot of services and benefits.”

Not far away in Dresden, farmer and crop consultant Dan Vanek said his property is on the border between Lambton County and the amalgamated municipality of Chatham-Kent. Taxes are lower in Lambton, thanks to industrial taxes levied on energy sector companies.

Ontario farmers do get a break. Municipalities can only charge up to 25 percent of the residential rate on farmland, and increases must be phased in over time.

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  • John Macdonell

    2 comments:

    1. They want rural development? Isn’t that counter to the wish to preserve their farmland?

    2. Assessments don’t by themselves determine property taxes. The final arbiter of property taxed is the “mil rate” which communities can and adjust up or down. Means an assessment up 50%, can, by the mil rate, produce a tax increase of only 2%(or even a tax reduction).

    • northern vigor

      Farmland here tripled and the last time MCAP assessed my land the assessment went up accordingly. I went in asked the clerk if the township was going to triple my taxes? He said “No, they would adjust the mil rate”. Well guess what…the council did not adjust the mil rate. My taxes tripled.

      • John Macdonell

        Sad, but not the norm. Most communities do adjust the mil rate in situations where land assessment has moved a long way suddenly.

  • Valewood

    It’s all part of the Liberals plan to destroy rural Ontariowe. That’s why we sold our farm (that was in my family for almost 2 centuries) last year and left the province, before we had nothing left. Hated to do that, because we would have preferred not to cave in to exactly what the Wynne gang was aiming for, but we had to worry about our retirement after farming for 35 years.