A promised start to the phasing out of the education property tax is “welcome news,” said KAP president Bill Campbell.
“Farmers pay a disproportionate amount of education property taxes, and the disparity between what farmers are paying and what the average homeowner is paying remains an issue,” Campbell said in a statement April 9.
“Until the tax is completely removed, farmers will continue to pay more than their fair share,” he added.
The 2021 provincial budget, released April 7, calls for about $248 million in education tax rebates in 2021 alone for about 658,000 property owners. This follows through on a move the government telegraphed in last fall’s throne speech.
“I think we’re just moving to a fair, more reasonable way of supporting education in our province without punishing senior citizens for trying to stay in their own home a little longer or picking on farmers in rural Manitoba,” Premier Brian Pallister told reporters in a news conference on budget day.
Owners of Manitoba residential and farm properties in 2021 can expect a rebate of 25 per cent on education tax paid in 2021, while owners of other types of properties will get a 10 per cent rebate. In 2022, the rebate for residential and farm properties will be raised to 50 per cent.
Pallister said he wouldn’t make a commitment on when the rest of the education property tax would be removed.
The rebate is to be based on the school division special levy and community revitalization levy before the Education Property Tax Credit Advance, the province said.
Property owners eligible for the rebate will continue to pay education property taxes but will get their rebate cheques in the same month that municipal property taxes are due, or earlier according to budget documents. The province will send out the new rebate automatically, thus property owners will not need to apply to receive it.
The rebate will also mean a proportionate 25 per cent cut in Manitoba’s existing school tax offsets in 2021 — and that includes the current farmland school tax rebate, as well as the education property tax credit and advance, seniors’ school tax rebate and seniors’ education property tax credit.
Thus, the existing farmland school tax rebate — which in 2020 rebated eligible landowners up to 80 per cent of the school tax owing on their farmland, to a maximum of $5,000 — will instead rebate up to 60 per cent of school tax owing in 2021, to a maximum of $3,750.
In its budget documents, the province gave an example of a farm property with $5,600 owing from a school division special levy. In 2020, the province’s farmland school tax rebate would apply on $4,480 of that amount and the landowner would owe a net special levy of $1,120.
In 2021, the same landowner would get a rebate cheque for 25 per cent of the total levy, or $1,400, and he/she/they will still have to apply to receive the farmland school tax rebate, which would be proportionately cut by 25 per cent, to $3,360.
The landowner would thus owe a net special levy of $840 for 2021, down 25 per cent from its 2020 level.
The planned phase-out will also include a 2020 education property tax freeze, the province said Wednesday.
Residential properties eligible for the rebate will include single-dwelling units, condos and multiple-unit dwellings, the province said. Property owners who get the new rebate on the community revitalization levy and also get a provincial tax increment financing grant will have their grant reduced by the amount of the rebate.
Properties that are exempt from education property taxes, or that pay grants in lieu or payments in lieu of taxes, will not be eligible for the new rebate.
Owners of “other” properties, such as commercial, industrial, rail, pipeline or designated recreational land, will only get rebates at the 10 per cent level as they also can expect help from “significant” business tax measures in the 2021 budget, as well as pandemic-related business support programs, the province said. Also, the province noted, education property tax remains a tax-deductible expense for businesses.
Overall, the province’s 2021-22 budget projects $17.838 billion in revenue against $18.255 billion in spending, for a net budget deficit of $1.597 billion in the fiscal year.
The province also pledged to increase the Conservation and Climate Fund by $400,000, to $1 million, to fund projects that reduce greenhouse gas emissions and to add a new $1 million Organics Green Impact Bond to divert organic waste from landfills.
“We are pleased to see increased Watershed Districts Program funding to expand program capacity,” said Campbell. “Producers are part of the solution when it comes to climate change and want to be recognized for the ecological goods and services they provide.”
It also followed through on a $1-million pledge for a new 4-H Manitoba Scholarship Program, working with the Brandon Area Community Foundation and Manitoba 4-H Council to set up an endowment fund that’s expected to support $42,000 in scholarships per year, starting in 2021.
The province allotted $1.6 million in operating grants to childcare centres, which it said would support just under 150 new licensed childcare spaces and pay for just under 400 spaces opened in 2020.
Campbell said the province needs to put some of these funds towards childcare in rural communities.