It will be a hard sell to convince Alberta farmers that market-value tax assessments are the way to go, admits one member of a government committee examining the option.
“Market value has its advantages but it’s so complex and people are so fearful of it, they tend to look at it as something that can’t be anything but harmful,” said Barry McFarland, MLA for Little Bow.
The three-member committee, appointed by municipal affairs minister Iris Evans, released a report last week saying 85 percent of people consulted province-wide feel officials should continue to assess farmland on its productive value.
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Evans appointed the committee in 1997 to review farm taxation and assessment issues after market-based assessment was introduced for cities.
The committee recommended the government update the productive value system for farmland assessment and review it periodically.
Jack Hayden, president of the Alberta Association of Municipal Districts and Counties, feels urban dwellers are pressuring government to make the change to market-value assessment.
He doesn’t know of any rural people, acreage owners included, who want their land assessed according to market value and thinks government will keep it based on production.
“I would think that’s the way it has to go. Anything else would be too disastrous for the agricultural community.”
Hayden’s chief criticism of market-value assessment is that companies or people wanting to live on land for its lifestyle benefits may be willing to pay more than the land could recoup through production. That would mean an unaffordable tax increase for conventional farmers, he said.
According to McFarland, people already buy agricultural land without taking its production value into account.
“Some people have come out, bought the land and probably had no idea what it meant in terms of agricultural production. Then when they get their tax notices they think they’re being ripped off.
“People want to live in a quiet, pristine area and when they get there they realize they’re being assessed and maybe they’re part of the reason taxes have gone up.”
Farmland assessment in Alberta is based on the property’s productive value when used for growing field crops. Except for the residence, all buildings used for farming operations are exempt from assessment and taxation when located in a rural municipality.
The residence receives exemptions based on assessed value of the owner’s agricultural land. Many people in the city don’t understand this exemption or think it’s unfair, said Hayden.
His organization supports exemption-free taxation on the residence but only if government agrees to remove the education tax on surrounding land. Although that may only save farmers several hundred dollars a year, it is significant when producers are pinching pennies, said Hayden.
Elimination of the education tax on agricultural land was often suggested at province-wide consultations, said McFarland, but the committee doesn’t have a mandate to make recommendations on that.
The committee also considered an updated definition for farm operations, assessment and taxation for intensive livestock operations and a business tax.
The final report, which records consultation results, doesn’t provide substantial recommendations, said opposition agriculture critic Ken Nicol.
“Basically the report didn’t say very much. It kind of passed the buck to another study.”
McFarland said more concrete recommendations should be available this fall. They’re impossible now because consensus hasn’t been reached on many topics, such as how feedlots and other intensive livestock operation land should be assessed and taxed.
