Manitoba producers hoping to get back all of the school tax they pay on farmland will have to wait until the province conquers its deficit.
Last week’s provincial budget holds the farmland education tax rebate at 80 per cent, while introducing a new $5,000 cap to limit rebate expenditures, which came in at $34.5 million in 2012.
“With land values going up, there was $4.5 million in additional costs to sustain the program,” said Ron Kostyshyn, minister of Manitoba Agriculture, Food and Rural Initiatives (MAFRI).
His department’s budget will drop to $214.6 million, a 5.4 per cent cut.
“We’ve had to make some tough decisions,” said Kostyshyn, saying flood costs are a significant financial challenge for the provincial government.
Some spending cuts have already hit, with several regional offices being consolidated immediately after the move was announced April 11. They include the closures of regional offices at Neepawa, Treherne, Stonewall, Shoal Lake and Boissevain.
Farmers who had used the Treherne office will now be directed to Somerset, where Treherne staff will now work, and to Portage la Prairie. Stonewall office staff have been moved to the Teulon office, and farmers from the Stonewall area can go there or to Beausejour. Meanwhile with the Neepawa office merged with Minnedosa’s, farmers can go there or to offices in Carberry and Gladstone. As well, Shoal Lake will move to the Russell office, and service provided from there, Minnedosa or Hamiota, while service formerly provided in Boissevain will be provided from Killarney, Melita, Souris and Brandon.
The closures didn’t come as a surprise to Doug Chorney, president of Keystone Agricultural Producers.
“We have to face the reality that extension services are changing and the way farmers access those services is changing, with smartphones and the Internet,” said Chorney. “Young people don’t go to their local ag office the way they did 25 years ago.”
What’s important is that extension services remain available to producers who rely on them, he said.
However, the government’s decision to hold off on increasing the farmland education tax rebate didn’t sit well with the KAP leader.
The removal of school taxes from farmland was a promise made by the NDP in the 2011 provincial election, and Chorney said the $5,000 cap will put larger farms at a disadvantage.
“I don’t think a flawed tax system should be able to discriminate on farm size, I think all farms should be able to access the rebate in proportionate ways… it just doesn’t make sense,” he said, adding his organization will continue to push the government to keep its promise.
The cap takes effect in the 2013 tax year and is expected to save the province $6.2 million in 2013-14.
Also for the 2013 tax year, applications for the rebate for a given tax year must be filed no later than March 31 of the following year, the province said. Applications related to the 2011 and 2012 property tax years have until March 31, 2014 to apply for the rebate for those years.
The April 16 budget also expanded the province’s 10 per cent non-refundable corporate income tax credit on odour-control investments.
Set up in 2004, the tax credit is available for capital expenditures “for the purpose of preventing, eliminating or significantly reducing nuisance odours arising from the use or production of organic waste.”
The credit had been made refundable for farmers, based on income tax and on property tax on farmland paid by the farmer. However, the budget eliminates the cap, making it fully refundable to farmers — both individuals and corporations — on qualifying property purchased after 2012.
But funding for the jointly funded federal-provincial Manure Management Financial Assistance Program is being reduced from $8.5 million in 2012 to $3.6 million this year.
Kostyshyn said the move results from a lack of uptake in the program.
“It’s really not a cut, it’s a savings,” he said.
Overall, the budget projects a $518-million deficit for 2013-14, a drop of $65 million from the fiscal year that just ended. A one per cent increase to the provincial sales tax is forecast to more than cover increased spending.