The rate program was developed 22 years ago when the Mike Harris government overhauled farm property taxation, simplifying the structure.
SDG’s support of the resolution by Mapleton Township, northwest of Guelph, calls for the government’s program to be reviewed due to the burden it has shifted to other tax classes for municipal taxation.
Before the program launched, farms paid the full amount of property tax for the land used for agriculture production to a municipality. The land owners then would receive a rebate of approximately 75 per cent of the property tax paid from the province. Under the current program, agriculture land is taxed at one-quarter the residential tax rate by municipalities and the rebate eliminated. The impact to urban municipalities has been minimal, but for rural municipalities, the revenue issues are substantial.
“The tax burden has shifted more to residential owners,” said councillor Steven Byvelds (South Dundas). “If you have other industries that you can spread that tax burden, it helps.”
Byvelds pointed to South Dundas, which has some industrial businesses, but not as many as when the program started 22 years ago.
“We had a lot more manufacturing here then,” he said. “There still is some in South Dundas, and we’re grateful for that.”
Some municipalities in SDG have taken a larger hit on their finances under the province’s two-decade long taxation program, in part due to the province’s reductions in the Ontario Municipal Partnerships Fund. That fund was set up to help compensate municipalities for the revenue shortfall after 1998 when the farm class taxation program went into effect. That reduction has become a double whammy for one municipality within the county.
At just under 7,000 in population, North Stormont has seen the impact of farm tax class issues impact their budget even more.
“We’ve seen dramatic cuts in OMPF funding and that has been balanced off with increases in assessment,” said councillor Jim Wert (North Stormont). “The impact has been reduced somewhat because of partnership agreements but the reality is without Lafleche, we’d be looking at double-digit tax increases yearly.”
Lafleche Environmental Services in Moose Creek is the largest single industrial taxpayer in North Stormont.
“I think we’re all prepared to pay our share,” Wert said. “But I also feel it’s an opportunity given the financial challenges at the provincial and federal level that we would be wise to ask.”
The resolution calls for the program to be reviewed as it was originally supposed to be revenue neutral, with funding offsets provided by the OMPF.
“A review is overdue,” Byvelds said. “We need to see if its the right way, if the tax formula is right for the needs of everyone, and it’s a fair system.”