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Rebate system not the right solution for municipal farm tax woes: WFA

Wellington Federation of Agriculture president acknowledges the challenges faced by rural municipalities but urges caution as they ask for farm tax policy review
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WELLINGTON COUNTY – As Wellington County municipalities ask the province to review their farm tax policy, the Wellington Federation of Agriculture (WFA) is reminding them that returning to the previous rebate system doesn’t work for farmers. 

In March, the Township of Mapleton passed a resolution to ask the province to review the Farm Property Tax Class Rate Program over concerns that host municipalities have an unfair burden of subsidizing farmers. 

Before 1998, farmers would apply for a 75 per cent rebate on their taxes from the province but now pay up to 25 per cent of their assessed land. At an early June meeting, Puslinch council supported Mapleton’s ask and many on council agreed that it is unfair for rural municipalities to subsidize food production for the entire province.

A letter to Wellington County municipalities from WFA president Janet Harrop cautioned that returning to the old model would be counterproductive.

Harrop explained the Farm Tax Rebate Program was intended as a temporary measure and reinstating it would tie up farmers' cash flow. She also noted that the tax burden on Wellington County farmers has doubled in the past 20 years. 

In 2001, the county collected 3.8 per cent of its total taxes from the farm property class compared to about 7.7 per cent this year. 

“The implication that farmers are being subsidized when their taxes have increased at a faster rate than any property class in Wellington County does not sit well with WFA,” Harrop said. “The idea of multiplying farm taxes by four and waiting for OMAFRA to cut a check for the difference would have significantly negative impacts on cash flow for Ontario farmers.”

Harrop did acknowledge that the provincial government has not fulfilled their obligations to rural municipalities. The Ontario Municipal Partnership Fund (OMPF), which is provincial funding to municipalities to offset lost taxes, has seen significant cuts over the years.

A report by county treasurer Ken DeHart showed a tax levy of nearly $35 million would be necessary in order to offset the difference county-wide. The OMPF allocation for 2019 was just above $7 million leaving a shortfall of more than $27 million which is shifted onto every other property owner in Wellington County. 

Harrop warned that the rebate program changed its eligibility requirements often leaving it difficult for farmers to predict how much they would receive and if they would receive a rebate at all. This is part of the challenge of using provincial funding to rebate farmers.

“If the provincial government needed to cut spending to balance its budget, the rebate program could be reduced significantly,” Harrop said. “This is part of the reason the OMPF program was cut and there is no reason to think the same could not happen under a hypothetical rebate program.”

Harrop ended her letter by reminding the municipalities that there are more efficient ways to get funding. 

“If the goal is to provide rural municipalities with better funding, that goal could be more efficiently achieved by continuing to lobby for improvements to the OMPF program as well as targeted infrastructure funding for rural municipalities,” Harrop said. “WFA remains a willing partner to help lobby for adequate funding of rural municipalities.”


Keegan Kozolanka

About the Author: Keegan Kozolanka

Keegan Kozolanka is a general assignment reporter for EloraFergusToday, covering Wellington County. Keegan has been working with Village Media for more than two years and helped launch EloraFergusToday in 2021.
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