What does a farm cost to service?
When it comes to municipal services, some would argue not much.
Or at least, not much when compared with residential, commercial or institutional brethren.
A field of corn doesn’t require fire and emergency services. It doesn’t ask for its street to be plowed, it doesn’t need its garbage picked up.
“Farmland simply doesn’t use the services that other land uses,” said director at large of the Ontario Federation of Agriculture, Peter Lambrick.
And because of that, the OFA along with the Peel Federation of Agriculture is trying to get Ontario and its municipalities to do something about farmland assessment values that have skyrocketed across the province and put an unfair burden on food producers, according to the organizations.
Lambrick explained that historically, farmland in Ontario has faced a different tax burden then residential or commercial land. Local governments in Ontario are given the power to set the ratio that will determine the size of that burden – in the Region of Peel, it has fallen to the municipal governments.
The residence of the farmer (a house and one acre) remain taxed at the normal residential rate, but traditionally, the farmland itself, has been taxed at 25 per cent of the residential rate.
In February, members of the Peel Federation of Agriculture, Jason Bent and Randy McLeod, delegated Caledon Council to ask the town to further reduce the farmland rate.
According to their presentation, the Municipal Property Assessment Corporation (MPAC) completed a reassessment of Ontario properties on January 1, 2012, and in each of the six Ontario assessment zones, farm class assessment increased more than residential assessment.
In Caledon, during the four year period, farmland assessment rose 4.7 times higher than in the rest of the GTA.
The reassessment has resulted in farmland values that are creating unfair tax structures when it comes to cost of services.
“With farmland values significantly outpacing residential values, the farm class will carry a larger share of the total municipal tax burden if not adjusted,” said Bent. “And the way you would adjust that is to change the farm/residential tax ratio.”
Bent and McLeod asked the council to reduce the ratio down to 16.7 per cent by 2016. Figures they believed would more accurately reflect the costs to services created by Caledon farmland.
Ward 3 and 4 Regional Councillor Richard Whitehead said he was appalled at the increased values, and the way they were presented by MPAC.
“They send it out in the mail and say, well, that’s the way it is,” he commented.
Whitehead said tax rates have rarely been akin to services provided and that it is a provincial issue he’s seen for years. He said he believes it is important that the rate is adjusted so that farmers in Caledon don’t pay any more of the burden then they did previously, and called for a staff report to explain all of the options.
Ward 1 Regional Councillor Richard Paterak asked the PFA members if they, or the Ontario Federation of Agriculture, had lobbied the Province about the use of the ratio to create some sort of balance.
“Have you reminded the province that this isn’t a sensible way?” he asked. “That it needs to be subsidized or funded in a different way, on a provincial basis?”
Bent said the OFA and PFA have been actively commenting to the Province.
Ward 2 Regional Councillor Allan Thompson told a story about a conversation he had with a local farmer in regard to the tax.
“He says to me, this tax increase is going to be a real hit. Does that mean you’re going to run municipal water up my road? Are you going to start cleaning your ditches fence to fence, or are you building road infrastructure so I’ll have decent shoulders? We all know the answer to that.”
Thompson raised the plight of farmers in the 1960 and 70s who fought against what was known as ‘expropriation by taxation,’ when land values began to outpace productive value. And while land sales are driving up the value of near urban farms, he said productive value can be developed today, that farms did not need to be taxed through their developable value, and supported the formulas presented by Bent to calculate that.
Any property owner who disagrees with their assessment has the right to appeal and Mayor Maroyln Morrison suggested an excellent thing would be for every farmer in Ontario to send a letter to MPAC, and asked Bent and McLeod if that was being done.
Bent said it is being encouraged for OFA members.