When the councillors in the Municipal District of Willow Creek were asked to take a final look at the new definition of a farming operation, the normally agreeable group couldn’t come to a consensus.
“Our council is split,” said Earl Hemmaway, deputy reeve of the southern Alberta municipality.
While some councillors believe there are businesses masquerading as farms, others think any rural business brings a much-needed economic boost to the local economy.
“It’s really a hard call. Now you’re a business and before you were a farmer,” said Hemmaway, referring to the Alberta government’s proposed changes to the definition of a farming operation.
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Under the new proposal, once farm produce is given a grade standard, that part of the business is reclassified and is no longer tax exempt. The proposal still exempts intensive livestock industries from taxes, but it’s only a matter of time before all parts of farming will be scrutinized, Hemmaway said.
“I’d like to know where the government is coming from. I’m not sure.”
MLA Richard Marz, chair of the Farm Property Assessment Review Committee, said with the growing number of intensive livestock operations in the province and the increase in farm-based businesses, the government needed to review the way farm property is assessed and taxed.
The proposed changes to the definition of a farming operation are one part of a review that has been under way since 1997.
“I know no one wants to pay any more taxes,” said Marz.
This spring cabinet approved proceeding with the farming definition changes, adding woodlots to the farming definition and offering tax relief for farmland set aside for conservation.
These changes will likely be finalized by the end of December and approved for the 2002 tax year.
In the final draft are changes to the way intensive livestock operations are taxed, farm residence tax exemptions, business taxes on farms and changes to sub classes of tax rates.
Marz said some municipalities and community groups complained intensive livestock operations create a strain on rural roads and services without paying more taxes than traditional farmers.
With the changes, intensive livestock operations will still not pay more taxes, but the committee is putting the final touches on a “footprint model” that will deal specifically with intensive livestock.
Large scale operations will be assessed at a different rate depending on size, said Marz. He said intensive livestock owners are looking forward to the new taxation system because they’ve been accused of not paying their share of taxes.
Liberal leader Ken Nicol said he’s concerned the province is deciding who constitutes a farmer.
“They should be leaving that to the discretion of the local community. Do they see this as an integral part of a production unit or is this an add-on? Let the local community make that judgment.
“How do you define when value-added starts and when production ends?” said Nicol.
Neil Wagstaff, president of the Wild Rose Agricultural Producers, said his group is concerned about inconsistencies within the definitions.
A pedigreed seed producer’s clean seed is classified as commercial, but a livestock producer’s seed, its embryos or semen, are considered a farming operation.
“While we sympathize with municipal governments’ (need) to increase their revenue stream, the idea of differentiating commercial operations from what are basically traditional farm operations is not in agriculture’s best interest,” said Wagstaff in a letter to Alberta Municipal Affairs officials.
