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.”

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).”

• Read more: Education taxes to be looked at under review
• Read more: KAP has a plan to tackle skyrocketing farmland taxes

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.

The post Farmland school tax reforms may be coming appeared first on Manitoba Co-operator.

KAP, which has been studying the issue since last August, says on average the assessed value of Manitoba farmland in 2016 jumped 45 per cent.

In many municipalities the value of other property hasn’t increased as much so a greater portion of the municipal and education tax burden has shifted to farmers. And farmers can expect higher land assessments for the next few years because there’s a two-year lag in values.

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

KAP says there are three options to reduce farmers’ tax burden.

“We’re asking KAP members to go to their RM (rural municipality) budget meetings and make their voices heard on these options,” KAP president Dan Mazier said here April 20 during the general farm organization’s quarterly advisory council meeting. “Many of the meetings are happening this week and next, so please go to the KAP website home page for a listing of meetings and for further information.”

While KAP hopes farmers can convince their municipal councils to implement the proposed reforms, it suspects ultimately municipalities will have to unite and press 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.)

“We aren’t seeing an appetite on the province’s part to reduce that portion,” KAP general manager James Battershill told the meeting. “But what we know and believe is that we need additional allies in this lobby effort, so we are really asking our members to go to their council meetings (and) actively lobby and encourage (councils)… to lend a voice with us calling on the provincial government to resolve this with the tools the province has at its disposal.”

And the simplest tool is for government to reduce the portioning value on all farmland taxation province-wide.

But the Manitoba government has told KAP individual municipalities have other options. One is for individual municipalities to apply to the province to reduce the proportioning on farmland. Such a change, if granted, would not apply to education taxes on farmland.

A municipality can also introduce a tax credit to farmland owners without permission from provincial government. It wouldn’t apply to education taxes on farmland either.

The third option is for municipalities to request the provincial government lower the portioned value percentage for all Manitoba farmland.

“In the past the province has made changes to the proportion on farmland so I feel it is the simplest and easiest way to deal with it if we can get the province to agree,” Chuck Fossay, a Starbuck farmer representing grain and oilseed commodity groups on KAP’s board of directors, said in an interview on the sidelines of the meeting. “That way everybody is treated fairly.”

The government is reluctant, fearing other property owners will seek similar changes, Fossay said.

KAP has written municipalities advising them of the options, but councils seem uninterested, Fossay said.

“We really want a long-term, simple solution across the province in my opinion, that deals with everybody fairly,” Fossay said.

“Farmers, who usually represent the smallest part of the population (in a municipality), are paying a much larger share of the taxes that are going towards education and to municipal maintenance.

“Farmers ended up paying $2,000, $3,000, $5,000 more than they did the year before and residential property in many cases saw a $200 to $500 reduction in taxes.”

Harold Penner, who owns land in the Municipality of Emerson-Franklin, saw taxes on one of his quarter sections, go up a whopping 111 per cent to $4,091.52 from $1,934.99. Property tax alone works out to be more than $25 an acre.

Holland farmer Les Ferris has said he’s been paying more than $20 an acre in taxes in the Municipality of Victoria since 2006.

Dugald farmer Edgar Scheurer took KAP’s options to the Rural Municipality of Springfield but wasn’t able to convince them to change.

Taxes on some of Scheurer’s land jumped 95 per cent last year. He, along with a number of other farmers, protested their high tax bills by initially refusing to pay them. They paid up before March 31 to be eligible for the 80 per cent rebate, up to $5,000, on education taxes paid on farmland, he said on the meeting sidelines.

Scheurer said he’s disappointed in the new Manitoba Progressive Conservative government.

“They aren’t any different than the NDP,” he said.

Scheurer is also worried adding a carbon tax could make him unprofitable and could dissuade his younger brother from starting to farm.

Battershill said the government won’t make any changes until the municipalities consider their options.

“Our hope is that we see more RMs feeling political pressure from their constituents, they then in turn push the provincial government, along with us, to see that portioning change,” he said. “So it’s really a bit of strategy in terms of how we’d like to see this proceed.”

Meanwhile, KAP continues to work with the Manitoba Chamber of Commerce and real estate and school board association of reducing education taxes on farmland, Battershill said.

The Manitoba government has signalled school boards need to cut costs, but the boards say they are going to raise taxes.

“We think now is really a prime opportunity to get this back on the political radar,” he said. “And in our discussions with (Education and Training) Minister (Ian) Wishart he is certainly open to that.”

Wishart, a farmer from Portage la Prairie, served as KAP president for almost three years. During that time he lobbied the government to end education taxes on farmland and production buildings.

The post KAP has a plan to tackle skyrocketing farmland taxes appeared first on Manitoba Co-operator.

That’s what Dugald farmer Edgar Scheurer suggested while commenting on Facebook about Manitoba Co-operator stories on skyrocketing farmland taxes.

Is Scheurer, who faces a 95 per cent jump in his Rural Municipality of Springfield tax bill, seriously suggesting a tax revolt or being facetious? Although he likes the idea, which would get elected officials’ attention and possibly lead to reforms, Scheurer said he hasn’t been flooded with backing by other disgruntled farmers.

“It’s sad how we just take it,” he said Oct. 12 in an interview. “If this were happening in France you know what would be happening — farmers would be in the streets protesting.”

Although Scheurer’s taxes have almost doubled from 2015, some landowners have seen bigger increases. One is Harold Penner who owns land in the Municipality of Emerson-Franklin. Taxes on one of his quarter sections, farmed by his son, are up a whopping 111 per cent to $4,091.52 from $1,934.99.

“The enormous increase is indeed a huge burden to farmers, especially young farmers trying to get their feet on the ground managing a huge debt load,” Penner wrote in an email last week. “It’s also hard to understand that society demands that farmers bear such a high percentage of the burden of education in this province. Why is that? Is education not something that everyone should be paying for?”

Manitoba farmers have long complained the special education levy on farmland and production buildings puts too much tax burden on them. Although education tax is part of the problem, there’s another factor at play — the rapid rise in the assessed value of farmland. When assessments go up so do taxes.

Farm Credit Canada says, on average, the value of Manitoba farmland has doubled in four years and in some municipalities property taxes have too. The result, says Municipality of Ste. Rose Mayor and farmer Rob Brunel, is the tax burden has shifted to farmers.

Emerson-Franklin’s 2017 budget is up 15 per cent due largely to higher road (gravel) and drainage costs, chief operating officer Tracey French said Oct. 14. The municipality’s mill rate dropped 13 per cent, but despite that some farmers are seeing a doubling of their property taxes because of a big jump in the assessed value of their land, she said. Other property owners’ taxes are up, but not by nearly as much, French added.

“It’s a real issue and we hope the provincial government is looking at it,” she said.

It is, according to Eileen Clarke, minister of indigenous and municipal relations, in an interview Sept. 27, but she didn’t provide any immediate solutions.

Removing the special education levy on farmland would reduce some of the tax burden on farmers, Scheurer said. Farmers can apply to get 80 per cent of the levy rebated, but it’s capped at $5,000.

Raising funds for education by taxing land doesn’t reflect the farmer’s ability to pay, he said. Farmers’ margins are falling and while their land might be worth more the only way to collect is to sell it, he said.

Many of Manitoba’s newly elected government MLAs are from rural constituencies and are or have been farmers. Premier Brian Pallister was raised on a farm near Portage la Prairie and still has family members farming. If this government can’t fix it, it’s doubtful another government will, Scheurer said.

Pallister was too busy for an interview last week, but in a statement Cameron Friesen, his finance minister, said the government recognizes rural Manitobans’ challenges.

“A review of Manitoba’s tax system is currently underway and ongoing as part of the value for money review,” Friesen’s statement says. “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 previous NDP government ignored the issue, the statement says.

“Our government has begun the necessary steps to fix our finances with targeted initiatives including a value for money review and a red tape reduction initiative.”

Keystone Agricultural Producers (KAP) president Dan Mazier is exasperated by such huge increases in farmland taxes.

“We hear these numbers and no one has a solution,” he said Oct. 13. “It’s not morally correct.

“I don’t know what to do or where to apply pressure. I just can’t get over the imbalance that is happening here.”

Meanwhile, the Manitoba School Boards Association is willing to discuss different ways to fund schools, executive director Josh Watt said in an interview Oct. 1.

“We definitely want to work with partners like KAP and AMM (Association of Manitoba Municipalities) in terms of a more detailed review of taxation in general,” Watt said. “We don’t want to rule anything out at this point because there might be merit in an idea or model that somebody has.”

Originally the special education levy was used by school boards to address local education issues and complement provincial funding, Watt said. But over time an increasing portion of funding is raised locally, he said. It varies by municipality. While estimates can be made the figures aren’t readily known, Watt said.

The association worries if school taxes are collected provincially it could undermine local autonomy and control, which has happened in other jurisdictions.

And that raises an important tenet: no taxation without representation — the lack of which sparked one of the world’s most famous tax revolts 200 years ago.

The post Farmers fail to rally to tax revolt talk appeared first on Manitoba Co-operator.

“I swallowed hard and wondered what was going on,” said Lowe Farm farmer Bill Toews in an interview.

“I was shocked at the amount of increase, and not just in the education tax, but in municipal tax as well.”

Toews, who recently retired in the Rural Municipality of Roland, said the tax bill on one of his quarter sections is up 61 per cent from 2014. (His 2015 bill wasn’t immediately available but Toews said it was similar to 2014.)

Education and municipal taxes on that property are up 77 and 39 per cent, respectively. Meanwhile, the RM of Roland’s budget is up just 5.6 per cent.

Keystone Agricultural Producers (KAP) president Dan Mazier says there are anecdotal reports of some farmers’ tax bills jumping 90 per cent.

Increases will vary by municipality, depending on each one’s budget and tax base. For example, the tax bill for this reporter’s farmland in the RM of Lorne is up 21 per cent.

There’s more to this than the long-simmering farmer complaint about funding schools through taxes on farmland and buildings. Farm Credit Canada says, on average, Manitoba farmland values doubled since 2012. Property taxes are based on a property’s assessed value. Manitoba has 10 classes of property, including farmland, residences, businesses, pipelines and railways.

Land values double

That sudden and dramatic increase in land values means farmers will be paying a greater — and some say inequitable — share of the total municipal budget unless the government adjusts the “portion percentage” assigned to farmland.

“To me that is a pretty easy fix,” Rob Brunel, a farmer and mayor of the Municipality of Ste. Rose said in an interview. “There is still going to be some inequities, but it is going to be as easy a fix as there is. Some people’s taxes are still going to go up and some will go down, but the majority of the burden will not be placed on the farmland owners in our case.

“Now with the reassessment (of farmland values) there is a shift of who is paying what because farmland values increased over 40 per cent (from the previous assessment) and in general houses did not increase for the most part,” Brunel said.

“Not every homeowner is seeing a decrease in taxes, but I would say a majority of home­owners saw a decrease in taxes and lots of businesses, which is rare, saw a decrease in taxes as well. The burden was put over to the agricultural land.”

Brunel has heard from a lot of irate farmers in his municipality, created in 2014 when the Town of Ste. Rose du Lac and the RM of Ste. Rose amalgamated. As a farmer, Brunel knows their pain. Property taxes on the land he farms, which includes rented land, went up $18,000 this year.

Taxation shift

The amalgamation of an urban and rural municipality highlights the shift in the tax burden, Brunel said. Formerly, each municipality’s rate payers — homeowners and businesses in town and farmers in the rural area — covered their own infrastructure, with rural residents also contributing to services in town such as recreation.

Now that two municipalities have merged, farmers are seeing about a 40 per cent jump in their total property tax bill this year even though the municipality’s budget is up less than one per cent, he said.

“In my opinion as a farmer and as a municipal leader there is no reason why farmland should be subsidizing urban areas or urban areas subsidizing farmland,” Brunel said. “There has got to be a balance.”

But the shift in tax collection isn’t restricted to newly merged municipalities, said Shawn McCutcheon who farms in the Homewood area in the RM of Dufferin. As its former reeve and former chair of Midland School Division, he understands the Byzantine world of property taxation better than most.

“There is a fairness issue I think with (some) people not paying their fair share (of the municipal budget, including public good services such as libraries and recreation),” McCutcheon said.

“It is a big problem I think. It is going to create hard feelings.”

Historical balance

McCutcheon agrees the simplest solution is developing new portioning numbers to restore the historical balance among property taxpayers.

It’s a sound alternative, in the short term, to lobbying the Manitoba government to remove education taxes from farmland and buildings, he added.

“There is no way the provincial government will have the financial means in the near future to address that farmland tax rebate (of 80 per cent capped at $5,000),” McCutcheon said. “But we can say to the government, ‘you can be a big part of the solution without it actually costing you any money.’ We are just going to realign the burden to fairly reflect historic trends.”

Keystone Agricultural Producers (KAP) president Dan Mazier, who farms at Justice, said the current system isn’t fair. Land prices have doubled but “it doesn’t reflect the ability to pay,” he said in an interview.

“Can you imagine if factory taxes went up 50 per cent? It’s unbelievable.”

KAP is studying the farmland taxation issue, he said. In August, KAP gave Education Minister and past KAP president, Ian Wishart, a “heads up,” Mazier said.

“Maybe now with a new government in place we can have a reset,” he said.

Indigenous and Municipal Relations Minister Eileen Clarke was on the road last week and unavailable for an interview.

“Manitoba’s new government recognizes that taxes in this province are high and a competitive tax environment matters when it comes to attracting new investment and protecting farmers’ bottom line,” a spokesperson said in an email.

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