Municipal leaders made a plea to the province’s new government last week to rethink how property is assessed as a way of reducing a widening gulf between urban and rural taxpayers’ property taxes.
Mayor of Ste. Rose Municipality and farmer Rob Brunel was among the first to the microphones as Premier Brian Pallister and his provincial cabinet assembled to take questions from delegates at the Association of Manitoba Municipalities convention. He asked if the province would be prepared to go through a process to adjust the portion percentage assigned to farmland.
“What we’ve seen is an increased tax burden placed on farmland when it comes to municipal budget,” he said.
Brunel is referring to the portion, or percentage, of a property’s assessed value to which taxes are applied. The province determines that percentage. Currently, farmland is taxed at 26 per cent of its assessed value.
The large increases farmers saw on their tax bills this year reflect how much farmland has been rising in value. Since 2012 average farmland values have doubled, according to Farm Credit Canada.
The jump in taxes this year has raised widespread concern that farmland owners are paying a disproportionate share of municipal budgets.
Minister of Finance Cameron Friesen, who was among other cabinet ministers taking questions from AMM delegates, thanked Brunel for his question, saying cabinet had anticipated the matter would come up at the AMM’s convention.
“Certainly, this is a concern to us,” Friesen said, adding that the matter has been frequently raised during consultations as it conducts an ongoing review of Manitoba’s tax system.
“We have some bold ideas that we’re setting out to explore on that subject. But also we understand that, in the interim, and in the right now, operationally it creates a huge challenge (on farmers).
“As a government we take the view that we’ve already had enough taxes and this is a detrimental burden on operation. We’re seeking to understand what could be done right now to relieve some of the pressure on that burden to producers.”
In a statement released later in the week, Friesen again cited the government’s ‘value for money’ review and red tape reduction initiative now underway.
“It would be premature to comment on any potential changes of the current system until that review is complete and recommendations are brought forward for consideration,” the statement said.
Indigenous and Municipal Relations Minister Eileen Clarke said government is working closely with all stakeholders, including Keystone Agricultural Producers (KAP), on the matter and cited the property tax study now underway by KAP.
That study is looking municipality by municipality at how much have land values increased and accordingly how much have the taxes bills increased. The increases are not uniform across the province.
Brunel said later in an interview pressure must be kept up on the province to address the issue.
“There is a need and urgency to not only fix school tax on farmland but this steady shift of taxes on to farmland,” he said.
“Budget season is just around the corner. Quite frankly, as a municipality we would like to rectify this as soon as possible. But we also don’t want to just put this fire out. We want to settle this long term as well.”
Dan Mazier, KAP president, agrees it won’t be easy to restructure how municipal taxes are collected, noting his organization’s repeated ask to remove the $5,000 cap on education tax rebates for farmland. This issue of assessment only further complicates the discussions, he said. The matter will need to bring multiple government departments together, including finance, education and municipal relations.
“It’s going to take awhile to sort out,” he said. “We’re asking them (the province) to sit down with our stakeholders, which, in this case would be not only KAP but the AMM and Manitoba School Boards Association. Because sitting back and pointing fingers at each other and saying ‘get your taxes down’ is not working. It can’t work this way.”