A tax tool offered by the Saskatchewan government to help ranchers hurt by BSE won’t actually reduce taxes, say provincial farm organizations.
The government has announced the percentages of value it will use to establish taxable assessments for various property classes. Owners of rangeland will pay property tax based on 40 percent of its assessed value, down from 50 percent.
Government relations minister Len Taylor touted the reduction as recognition of BSE’s impact on land values and mitigation of the 2005 property revaluation.
But the Saskatchewan Stock Growers Association said taxes will still go up.
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Orin Balas, who ranches near Ponteix, Sask., and speaks for the association on tax issues, said that’s because assessments went up so much.
He used the example of a pasture rated for 44 animal unit months, or AUMs, which is the average carrying capacity of all pasture in the province.
That pasture would be assessed at $94 per acre or about $15,000 per quarter. Using the 50 percent rate, the land would have a taxable assessment of $7,500.
“In 2005, the same 44 AUM quarter is going to be valued at $134 per acre, or $21,440,” Balas explained.
Using a 40 percent rate, the taxable assessment will be $8,576.
“They can spin it however they want but I don’t see it as a break,” Balas said. “It’s going to be up to the rural municipalities to readjust the mill rate, and that will depend on how much grass they have.”
Non-arable land assessments rose 42.5 percent on average across the province, said Saskatchewan Association of Rural Municipalities president Neal Hardy. Even with the change in the percentage of value, there will still be a 14 percent increase overall, he said. He agreed that if municipalities keep their mill rates the same or raise them, then taxes will go up.
“A lot of producers are going to have a difficult time,” he said.
Municipalities are already extending discounts to help those short of cash.
The Agricultural Producers Association of Saskatchewan said any reduction extended to rangeland owners should have been given to everyone.
Vice-president Cecilia Olver said many producers are running cattle on arable land seeded to grass. She also said property tax and BSE are separate issues and should be treated as such.
The percentages of value for other property classes remain the same as before: agricultural land and improvements, 55 percent; residential property, 70 percent; commercial and industrial, 100 percent; grain elevators, railway rights of way and pipelines, 75 percent.
Premier Lorne Calvert last week said the province would use 30 percent of the $367 million it will receive in equalization money to reduce education tax on property. But the $110 million will come over two years, likely beginning in 2005. Hardy and Olver said Calvert should keep his promise to provide tax relief in 2004.
The government, SARM, Saskatchewan Urban Municipalities Association and Saskatchewan School Boards Association will meet Nov. 4 to discuss the issue.
