Farmland school tax reforms may be coming

KAP officials sense the Manitoba government might make changes during its current mandate

There was good and bad news on farmland taxes at the Keystone Agricultural Producers’ (KAP) advisory council meeting here July 13.

The bad news is KAP hasn’t convinced a single municipality or the Manitoba government to implement changes to reduce the tax burden on farmland.

The good news is there are signs reforms to education taxes on farmland could be coming.

“I think the government is talking the most positive I’ve seen in a long time about trying to make some changes,” KAP president Dan Mazier told the meeting. “Stay tuned.”

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Later, in his report to delegates, KAP general manager James Battershill said: “We perceive pretty strong and clear indications from the education minister (Ian Wishart) right now that this government is interested in some major changes to the way education is funded in this province. It is something we have pushed for decades. We’d like to see some resolution too, so if we can present an even stronger argument that not only has the burden for funding education in Manitoba been disproportionately paid for by farmers, but it’s worse (due to increased farmland assessment).”

Requests to Wishart’s office for comment were sent to Finance Minister Cameron Friesen. As of press time he had not responded.

KAP has lobbied for years to end education taxes on the assessed value of farmland and farm production buildings, arguing it unfairly places too much tax burden on farmers and doesn’t reflect their ability to pay.

The issue came into sharper focus last fall when new, higher land value assessments translated into double- and even triple-digit percentage increases in farmland tax bills.

Farm Credit Canada says, on average, Manitoba farmland values increased 12 and eight per cent respectively in 2015 and 2016.

While all property taxes, including non-farmland, homes and factories, are based on their assessed value, KAP contends farmland values have increased more than other property, resulting in shifting a higher and unfair proportion to farmers either directly as landowners or through higher land rent.

The latest farmland assessment notices, which the 2018 tax bill will be based on, have taken another jump, Battershill said.

Lower percentage

KAP has asked the Manitoba government to lower the percentage used to calculate the portion of tax revenues collected from farmland, currently set at 26 per cent. (Manitoba has 10 classes of property, including farmland, residences, businesses, pipelines and railways.)

A reduction would reduce the amount of farmland tax paid for both municipal services and local education.

In the interim, KAP sent a letter to municipalities informing them they have options to reduce the tax burden on farmland, including reducing the portion percentage applied to farmland. However, first municipalities would have to apply to the Manitoba government for permission 12 months in advance, and if granted, it wouldn’t apply to education taxes.

Municipalities, without provincial permission, can grant farmland owners a tax rebate, but it wouldn’t include education taxes.

Battershill took that message directly to the RM of De Salaberry earlier this year. The council said it couldn’t afford to rebate taxes.

“I think we knew many RMs would be responding that way and that’s why this was really a step in the process to try and get the provincial government to reduce the portion of assessment across the province to give some degree of universal support to producers,” Battershill said.

Getting the Manitoba government to reduce the tax rate on farmland province-wide is the most equitable approach, he said.

Later in the meeting KAP delegates defeated a resolution for KAP to lobby the Manitoba government to allow municipalities to set different mill rates for different types of property.

The mover, Roblin farmer Walter Hammond, argued it would be another tool for municipalities.

“This isn’t going to solve all of our problems by a long way, but it might go someway to making things fairer and simpler to work out how they raise their taxes,” he said.

But opponents warned if approved the resolution might weaken KAP’s case for the government to reduce the portion of taxes on farmland province-wide.

They also noted a municipal mill rate change would not affect the amount of education tax collected on farmland.

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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