Farm representatives are calling for a re-evaluation of farm properties in the county after concerns Municipal Property Assessment Corporation (MPAC) reassessments have led to an unfair tax distribution.
Wellington Federation of Agriculture (WFA) vice-president Janet Harrop made a presentation on concerns raised by local farm organizations to county council at its Jan. 31 meeting. The WFA represents 1,200 members in the agricultural business in the county.
She said MPAC reassessed the value of all properties as of Jan. 1, 2012, part of four-year cycle of assessment conducted by the corporation.
“The farm class for the southwest portion of Ontario increased by 52.17 per cent with the residential class increasing 9.34%,” she said. “Many factors have increased the value of farmland in Wellington County with unique contributors like: very fertile land, primarily loamy, well-drained soils; large contiguous parcels of land; growers are leapfrogging over the Greenbelt to avoid regulatory burden and pricing and pressures from urban encroachment and developers.”
Harrop said the federation took the 2012 tax schedule posted on the county webpage and included percentage increases to the main tax classes provided by MPAC for the county in a further calculation.
“The numbers were dramatic,” she said of the WFA findings. “The farmland portion of the tax bill rose from 4.2% to 5.7%, while the residential portion remained unchanged, meaning a 34.7% increase in the tax burden to farmland, 0% increase to the residential burden, a 19.6% decrease to industrial and 11.5% decrease to commercial.”
“This represents a significant shift in the tax burden on farmland,” Harrop added. “The spreadsheet also shows a scenario comparing the effects of the tax ratio remaining at 25% and what the ratio dropping to 20% would look like. Again the numbers are quite dramatic. At the 25% ratio the farmland taxes would increase 34.7% over the next four years, while at the 20% ratio the increase is 9%.”
Farm expenses on rise
“Agricultural business owners realize that taxes are a necessary cost of doing business and just one of many expenses affecting the profitability of farming,” Harrop told council.
“As expenses continue to rise revenues are not keeping pace preventing business competitiveness locally, regionally and internationally. Attracting new entrants into the industry and agricultural investment is becoming harder and harder,” she added.
“Farmers are not asking for a tax break. We are asking to continue to pay the same fair proportion of the tax bill for our tax class, “ she said. “The Wellington Federation of Agriculture is advocating for their members, that Wellington County Council maintain the farmland tax burden at its current level and adjust the farmland tax ratio accordingly. We would ask that the finance committee study the issue with a report and recommendation to the committee of the whole to lower the farmland tax ratio to maintain the current level of tax burden.”
Councillor John Green, head of the county Administration, Finance and Personnel committee, suggested some of the calculations made by the WFA may be incorrect. He added the committee is willing to discuss concerns with federation representatives, including its calculations.
“I’m not sure the impact is the same as you’ve calculated.
Councillor Dennis Lever cautioned against a discussion involving MPAC and tax rates with only one group of ratepayers.
“I’m afraid we’re opening the door to a much larger problem.”
