County supports resolution for farmland tax rebate

County councillors are supporting a resolution seeking fair funding for rural areas.

That decision followed Treasurer Craig Dyer’s report in favour of the move.

The report stated the council of the United Counties of Stormont, Dundas and Glengarry passed a resolution with respect to the farmland and managed forest component of the Ontario Municipal Partnership Fund, and is seeking support from Ontario municipalities. The resolution received support from the Association of Municipalities of Ontario and the Ontario Federation of Agriculture.

Dyer said farmland represents 16% of the current value assessment in Wellington County.

“Prior to 1998, owners of farmland property paid their taxes to the municipality and then, subject to meeting eligibility requirements, applied to the province to receive a rebate of 75% of the taxes paid.” However, assessment reform in 1998 transferred that funding responsibility to municipalities.

Dyer explained the province mandated a 0.25 tax ratio for farmland, which resulted in lower total weighted assessment, higher tax rates and a tax rate on farmland set at 25% of the residential tax rate.

“The lost tax revenue from farmland properties within a given municipality is therefore funded in full through higher tax rates within that same municipality,” Dyer said in his report. “As a result, the province’s former Farm Tax Rebate program remains in place, but is funded predominantly by rural property owners. The cost of this program to Wellington County taxpayers in 2010 was over $13-million.”

He said the same scenario exists for managed forests, although the cost impact is on a much smaller scale. Dyer said the province’s managed forest tax incentive program allows for lands that meet certain provincial requirements to be placed in the managed forest property class. Just as with farmland, that property class carries a 0.25 tax ratio, with the forgone property taxes funded by the remaining property owners in Wellington.

He said, “The cost to county taxpayers is approximately $200,000 in 2010.”

The farmland and managed forest component of the Ontario Municipal Partnership Fund provided funding in 2010 in the amount of $885,200 ($714,400 to Mapleton, $117,400 to Wellington North, and $53,400 to Minto).

The gap between the costs of the farmland and managed  forest programs and funding received in Wellington County alone is estimated at over $12-million in 2010.

Do Dyer recommended county council support the resolution from the United Counties of Stormont, Dundas and Glengarry.”

Jim McDonell, chairman of the farm tax rebate working group in Stormont, Dundas and Glengarry stated,  “Ontario farming activities have a major impact on our everyday lives, with urban as well as rural residents wanting to maintain low-cost foods and protect forests. There are over 221,000 farmland and managed forest properties in Ontario with a current value assessment of over $39.8-billion.”

He stated changes to the farmland tax program and the managed forest tax incentive program “has resulted in the properties who are supposed to be benefiting from the programs, as well as other properties around them, are actually paying for their own assistance.

“This financial impact on municipalities is increasing: from 2007 to 2010 this provincial funding has fallen by 6%, while the farmland and managed forest phased-in assessments have increased by 3.5%. This lost tax revenue has increased property tax rates, with many municipalities as much as 20% higher than they would be with fair funding.” McDonell said.

The resolution stated that the farmland tax program and the managed forest tax incentive program were designed by the Ontario government to support lower food costs and protect forests for recreational and environmental purposes.

However, while those programs used to be funded in full by the province, those programs are now funded mainly by municipalities through the municipal tax base.

“Rural municipalities are being forced to absorb the loss of 75% of the property tax revenue from their farmland and managed forest properties while all residents of Ontario have a vested interest in maintaining lower-cost foods and protecting forests.”

The resolution stated that because the program provides lower-cost foods as well as the economic benefit of provincial exporting and is an income-redistributive program with province wide significance the province should calculate the farmland and managed forest component of the Ontario Municipal Partnership Fund (OMPF) so all municipalities receive full provincial reimbursement of lost property tax revenue on farmland and managed forest properties, and land-owners maintain the streamlined process and the 25% ratio currently in place.

Dyer said there has been interest in that region and it asked support as soon as possible.

Originally, the intent was to bring the issue to the January council, “but there seems to be some urgency on their part. From a staff perspective, we strongly support passage of this resolution.”

Council endorsed the resolution without comment.