Saskatchewan farmers will receive a $15 million property tax break from the provincial government.
It means farmers will pay $7 million more in property taxes in 2001.
Confused?
So were a lot of delegates at the Saskatchewan Association of Rural Municipalities semi-annual convention when municipal government minister Jack Hillson announced changes to tax reassessment rules.
“On the surface it looked like we were in for a reduction or at least the status quo,” said an annoyed SARM president Sinclair Harrison after figuring out what the new rules meant.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“But this is totally unacceptable.”
Different types of property are taxed at different rates in Saskatchewan. Until now, cropland was taxed at 70 percent of its assessed value, while pasture was taxed at 50 percent of its assessed value. Industrial/commercial land is taxed at 100 percent of its value.
For the same value of land, a factory owner would pay $100 in property tax, a grain grower would pay $70, and a cattle producer would pay $50.
Farmers and SARM delegates have been lobbying the government to stop increasing farmland’s share of the provincial tax burden. While the government had no plans to increase cropland’s 70 percent rate, farmland has increased in value compared to other types of property in Saskatchewan.
The effect of that would be to shift more taxes onto cropland – something many farmers say they can’t afford.
Hillson announced that the provincial government had decided to drop cropland’s taxable level to 55 percent of assessed value, something he said cut about $15 million in property taxes paid by farmers. A number of other changes were also announced.
Most SARM delegates applauded the announcement.
It took a few moments for the reality to sink in: farmland has increased in value so much that when it is reassessed, farm property tax would still increase by $7 million. The provincial rate cut prevented it from increasing by $22 million.
“When the minister announced a reduction of 15 percent, we did clap, but I was clapping very lightly because we didn’t have the answer to the real question,” said Harrison.
“And the answer is that there is going to be a shift to ag province-wide.”
An RM administrator compared the reality of the old system with the new system. By calculating all the changes, he found there was virtually no change in the tax most parcels of land would pay.
“You’ve got us exactly where we’d be anyways,” he said.
“You haven’t saved us a blinking cent.”
Hillson didn’t receive any praise from SARM delegates for the changes, but neither did he make friends in urban municipalities. The Saskatchewan Urban Municipalities Association condemned the rate reduction for farmland.
“This just further shifts the problem to residential and commercial property owners in cities, towns and villages,” said SUMA president Mike Badham.
SUMA and SARM have pushed the government to pay a bigger share of school taxes, the factor they say underlies almost all property tax problems.
The provincial government has said it would like to increase its share, but can’t afford it now.
