Phasing out education taxes on Manitoba property, including farmland, will start next year — a year earlier than first promised — the Manitoba government announced in its throne speech Oct. 7.
Why it matters: Rising assessment values for farmland, which education and property taxes are based on, relative to other rural property, has shifted the education tax burden to farmland.
“Manitobans need more tax relief sooner, not later, and your government will provide it,” Lt.-Gov. Janice Filmon said as she delivered the government’s priorities for the third session of the 42nd legislature. “The phased elimination of the education property tax, paid by individual Manitobans, will begin next year.”
A government official said ‘individual Manitobans’ include incorporated family farms.
Like most other policies mentioned in the throne speech, and true to tradition, there wasn’t much detail.
The Keystone Agricultural Producers (KAP) is eager to see more information about the tax phase-out, KAP general manager Patty Rosher said in an interview Oct. 8.
KAP hopes to discuss it with Finance Minister Scott Fielding and ask him to phase it out faster on farmland than the 10 years, promised by the Progressive Conservative party during last year’s provincial election.
Based on provincial government figures Manitoba farmland and building owners contributed $64 million of the $850 million in education property taxes collected in 2018-19. That’s 7.5 per cent of the total and accounts for the $42 million farmland owners received in education tax rebates of 80 per cent to a maximum of $5,000.
Averaged over about 10 million cultivated acres there’s about $6.40 an acre in farmland education taxes. But some farmers with higher-value land pay almost $30 an acre. On a 2,000-acre farm, that’s $60,000 a year in education taxes alone.
The shift in the education tax burden to farmers is due to two major factors. First, the province’s contribution to funding K to 12 schooling as a percentage is declining over time, while the municipal (local) share raised by taxing property, rises.
The other is the rapid increase in the assessed value of farmland, which has more than doubled in many parts of Manitoba since 2015. (Property values, along with mill rates, are used to calculate the amount of municipal and education tax property owners pay.)
Last spring the Manitoba government mailed property owners the latest assessed values to be used in calculating 2020 municipal and education tax bills.
The assessment for a quarter section owned by this reporter and a family member in the RM of Lorne was up 12 per cent. Over five years its value went up 136 per cent and since 2013 is up 182 per cent.
Other government plans highlighted in the throne speech include:
- Establishing a 4-H scholarship endowment strategy.
- As previously announced, hosting a Protein Summit next year.
- Investing further in sustainable water and irrigation management.
- Continuing to implement the Made-in-Manitoba Climate and Green Plan, investing in natural infrastructure projects and releasing a provincial water strategy.
- Spending more than $268 million as a first contribution to upgrading the North End Winnipeg Sewage Treatment Plant to reduce nutrients going into Lake Winnipeg.
- Pushing the federal government to partner with Manitoba on the $500-million Lake Manitoba/Lake St. Martin channel project — Manitoba’s largest infrastructure project.
- Introduce legislation to prevent illegal blockades of critical transportation routes.
- Starting with next year’s budget begin to balance government books over the next two terms.
- Introduce legislative changes to create new partnerships with Manitoba’s Indigenous communities, hunters, and landowners to protect big game species currently in decline and end night hunting.
- Overhaul the kindergarten to Grade 12 education system.
- Instruct Manitoba Hydro to keep this year’s rate increase to below three per cent, ensure MPI continues to lower rates, and allow less expensive and more convenient private retailing of liquor.
- Reintroduce legislation to streamline the Public Utilities Board so it can make decisions sooner and at less cost.