Landowners in the RM of Springfield are refusing to pay land taxes they say have jumped unreasonably, more than doubling in some cases.
They’re hoping to see the province reconsider the way it collects education taxes from farmland, says Dugald farmer Edgar Scheurer, who first suggested Manitoba farmers take action in a Facebook posting
“It looks as though the majority of Springfield farmers will hold back their property tax this month,” Scheurer said in an email Oct. 27. “I hope people will follow through and we will get noticed.
“We want to make a statement,” he said later in an interview.
Taxes were due in Springfield, and most other rural municipalities, Oct. 31.
Scheurer said recent stories in the Manitoba Co-operator had helped raise awareness around the increases in land taxes across Manitoba — in some cases doubling.
Property taxes are based on its assessed value. Farm Credit Canada has said, on average, Manitoba farmland values have doubled in four years.
The value of other property, such as homes, hasn’t risen as much. As a result in many jurisdictions the municipal and local education tax burden has shifted to farmers, while others, including some homeowners, have seen their tax bill fall.
“I think there is probably the equivalent of about 50,000 acres (that farmers will withhold paying taxes on),” Neil Van Ryssel, who farms near Oakbank in the RM of Springfield, said in an interview Oct. 28. “Certainly all the bigger farmers we have got to (are withholding) and we’ve had nobody that wasn’t on side.”
Since August, Van Ryssel has been meeting with local Progressive Conservative MLAs Ron Schuler (Springfield) and Dennis Smook (La Verendrye), as well as Education Minister Ian Wishart, in an effort to resolve the issue. And while it’s Springfield that will suffer, the protest is aimed at the Manitoba government, which controls how property taxes, including those to fund local school boards, are collected.
Van Ryssel said he hopes farmers withhold their property taxes “until we get this resolved by the province.”
Van Ryssel and other farmers phoned and met with farmers urging them to join the protest.
“There was very little disagreement,” he said. “It might cost us a bit of interest, but I don’t know how else to make a statement.
“Let’s hope that some sanity prevails and we get some equity into this taxation formula because right now there is none.”
Education taxes should be taken off farmland and applied to homes, said Van Ryssel, who saw a $17,000 or 40 per cent increase in his tax bill totalling $59,000. Of that, 61 per cent or more than $34,000 is for education. (The portion of a total land tax bill education represents varies from municipality to municipality.)
At least one member of the Manitoba government agrees, Van Ryssel said.
“I talked to (Education Minister) Ian Wishart, and I know him well,” he said. “He is very frank with me and he said he agrees that school tax should only be on homes.
“He said, ‘when you mention that to the finance minister he just about has a heart attack.’”
That’s also the position of the Keystone Agricultural Producers, the general farm organization Wishart headed before resigning to enter politics several years ago.
To start, the Manitoba government should remove the $5,000 cap on the 80 per cent of the farmland education tax it now rebates to landowners, Van Ryssel said.
Springfield’s administration and council empathizes with farmers, including those withholding their taxes, but can’t condone it, Chief Administrative Officer Russell Phillips said in an interview Oct. 28.
“They are impacting the municipality in terms of our cash flow if enough of them hold off paying their taxes,” Phillips said. “But we certainly appreciate where Neil (Van Ryssel) and this group is coming from. They are trying to send a strong message. Albeit they are sending it through us, but they are really directing it to the province…”
Not only does Springfield need the money to operate, but it must remit the education tax, which accounts for 61 per cent of Springfield’s total $30 million tax bill, he added.
Those who fail to pay their property taxes on time are charged interest monthly. If the taxes aren’t paid after two years, the municipality can advertise the property for sale. If sold the proceeds cover the unpaid taxes.
“Lord knows we never want to get to that,” Phillips said.
Since 2009 the portion assessment in Springfield has tripled to $1.39 billion, he said. Average farmland assessment is up on average 42 per cent from last year, resulting in a shift in the tax burden to farmers.
“Farmers are paying more (and) many residential homeowners in the RM of Springfield will see a decrease in their tax bills because we didn’t need more money to provide for the same level of service.
“Typically taxation is designed to be fair and equitable and if we aren’t providing any more services… it is pretty easy to suggest it’s not fair or equitable.
“The formula the province gave us put about $600,000 more pressure on farmers and put maybe $400,000 less pressure on residential, and then some other changes. I fail to grasp it.”
The Manitoba government could’ve helped farmers by phasing in the higher assessments, Phillips said.
“It has kind of washed its hands of it,” he added. “We have even taken it to our provincial MLA and I feel there is really a significant lack of understanding and a lack of empathy.”
Some observers have suggested the government adjust the portion percentage assigned to farmland. It’s currently 26 per cent and is multiplied by the assessed value to determine the dollar value to be taxed.
Phillips said municipalities can pass a bylaw to change the portion percentage, but it must be approved by the Manitoba legislature. It probably wouldn’t work in Springfield, because lowering the portion percentage on farmland could result in lower-valued land in the eastern part of the municipality being undertaxed.
The Manitoba government is reviewing Manitoba’s tax system, Finance Minister Cameron Friesen said in an email Oct. 14.
“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,” he wrote.
The Manitoba government was asked for comment Oct. 28 but didn’t respond by press time Oct. 31.