Councillors here are concerned rural agricultural municipalities are footing the cost to subsidize food prices for people in large cities.
Council recently received correspondence from the Western Ontario Warden’s Caucus regarding the farm tax rebate program
Caucus chairman Jim Burns wrote to council asking support to address the issue of provincial compensation for the negative municipal financial impact associated with the transition from the farm tax rebate program in 1998.
“Prior to 1998, the municipal property taxation system taxed farmland at the same tax rate as residential properties. To secure a provincial rebate of 75% of the municipal taxes, the agricultural property owner had to first pay the municipal tax bill, and then file a claim with the provincial Ministry of Agriculture, and subsequently a rebate cheque would be issued.
“Moving away from this cumbersome and costly system was a good move for both the farmer and the province of Ontario,” Burns wrote.
“The farm tax rebate program was replaced in 1998 with a system that required municipalities to lower the rate charged to agricultural properties to 25% of the residential rate.
“At the time of the program transition, the province agreed to compensate municipalities for the impact of this change with the equivalent compensation through the Community Reinvestment Fund. Unfortunately, equivalent compensation has not been provided since the 1998 taxation year to the agricultural communities in Ontario.”
Burns added, “As a result, according to some recent estimates, the transfer of the farm tax rebate program to the municipal tax bill has negatively impacted the agricultural municipalities of Ontario by more than $200-million a year.”
Burns continued, “I would encourage you to determine you financial loss and at the same time I would ask you to consider the impact that this has on all rural residents in Ontario.
“The failure of the province to provide appropriate compensation means that all residents of all municipalities with rural-agricultural assessment must pay additional taxes to pay for an initiative that benefits all residents of Ontario in the form of lower food prices.”
When Mayor David Anderson asked for clarification about what that meant to Minto residents, Treasurer Gord Duff said that in Minto, taxes of people residing on farmland are being subsidized by the other land classes in the municipality. He pointed out the same thing is happening to virtually every municipality which has an urban and rural land mix.
Locally, that amounts to about $480,000 in taxes that are subsidized, although the township does get about $289,000 in provincial funds.
In short, “rural-urban municipalities are subsidizing the cost of food in Ontario.”
Deputy-Mayor Judy Dirksen said that the really big issue is people in Toronto who are crying for cheap food policies are not the ones subsidizing it like in the rural areas.
