The farm property tax conundrum (2017)

By Larry Davis, Director, Ontario Federation of Agriculture

Last year many Ontario farmers and landowners were shocked by the 2016 Municipal Property Assessment Corporation (MPAC) assessments that saw farmland values increase by an average 65% over a four-year period. Ontario farmers had already dealt with similar increases in the previous round of MPAC assessments in 2012. These increases in farmland values, coupled with significantly lower residential and commercial classification increases will lead to farmers shouldering an astonishingly higher portion of local property taxes unless action is taken at the county level.

The Ontario Federation of Agriculture (OFA) has been advocating for fair farmland tax rates across Ontario.

The newly assessed values are being phased in equally over a four-year period (2017-2020).  As assessment values go up, property tax bills rise unless specific action is taken to adjust the property tax formula. The formula provides that farmland property taxes will be set at an amount up to 25% of the residential property rate. This flexibility in setting farm property tax rates is necessary. It exists to allow municipalities to deal with the uneven increases in farmland value.

The two most widely held principles of property tax fairness are the ability to pay principle and the benefit principle.

The benefit principle states that those who use more services should pay a higher tax rate. The sharp increase in farmland values and resulting tax increases mean farmers will be paying more property tax than ever before, while consuming the same level of services as they always have. Neither the ability to pay or the benefit principle justify such a steep increase in property tax burden for Ontario farmers.

The increase in assessment and property taxes that Ontario farmers face is not reflective of a farmer’s ability to pay more tax. While assessment values are increasing by 65%, net farm income is not.

If farm tax bills continue to increase, farmers will be shouldering excessive property tax burdens.  Municipalities across the province are already starting their 2018 budget discussions. Now is the time for all county and regional federations to work with their county and single-tier municipalities to adjust the farm tax ratio in their areas accordingly. OFA is available to provide any member or county federation with analysis upon request to help build a case for fair farm tax ratios.

While MPAC is responsible for the farmland property assessments, the farm tax ratio is the responsibility of each county or single-tier municipal government. OFA encourages all members to thoroughly review and understand their farmland property assessments, the impacts the new value will have to their farms and tax rates, and address the tax ratio issue with their local county or single-tier municipality. Ontario farmers should be proud of our valuable land and farm businesses, but will not and cannot shoulder unnecessary tax burdens.

For more information, contact:

Larry Davis
Ontario Federation of Agriculture

Neil Currie
General Manager
Ontario Federation of Agriculture


Vaughn Richmond says on November 3, 2017 at 4:53 PM

I bought a farm in 2014 since that time to and including assessment up to 2020 the assessed value is a whooping increase of 268% from what I paid for it. MPAC is a license to steel

Dave Tupper says on November 3, 2017 at 5:04 PM

There are several weaknesses in your argument. First, you are not arguing that the farmland has not increased in value. The only way it can increase in value is if farmers are bidding that amount, and more. Accordingly, the ability to pay principle is being honoured in that farmers have paid these higher values per acre which are attached to correspondingly higher assessment values. Second, you have not provided any data comparing the historical contribution of farmland to the overall provincial tax and assessment base. I am pretty confident that the farmland to non-farmland property tax values are at historical lows. This only makes sense given the historically higher ratio of rural to non-rural populations in years gone by. I also wonder about your proposition that farmers are using fewer municipal services than in years gone by. Rural children are going to better schools, many rural roads are paved and maintained at high levels, policing is better, fire protection is better, all things which must be paid for by municipal and provincial taxes. My point is that your arguments need to be supported with facts rather than assertions. Just as I can argue the counterpoint to your hypothesis in principle, my, and your positions would be better advanced with good data.

Rick Denning says on November 3, 2017 at 7:07 PM

disband the mpac and put it back to the communities where it seemed to work well before bill davis screwed things up !

fred says on November 3, 2017 at 7:53 PM

I got a detailed report last year on tax assessment and they are taxing on soil type HMMMMMMMMMMM

Ronald W. Jordan says on November 3, 2017 at 8:02 PM

I agree so greatly with our stand on fair property taxes on farmland. Most farmers want to use all of their farmland and are not interested in severing partial dispositions. When urban people come into the country and build houses on small lots the prices of farmland begin to soar. However, most farmers do not want to sever lots. Ontario loses so much "agriculturally fertile soil " each year and the resulting reaction to this by mpac is to increase the value of farmland for the farmer. Most devoted farmers want to pass the farm down to their children as has been done for generations so that they may continue agricultural crops but if we are going to be paying higher property taxes for our working farmland and only bringing in the same income we will be in the "red" when it comes to making a "profit" from all of our hard work on the land. Farmers feed cities and as such farmland should be left taxed at the 25% value as has always been the case in farm country. We do not have sidewalks, street lights , fire hydrants , and city sewage so why should we be paying higher property taxes on the farmland that we work on ? We must let our Regional Governments understand that changes in farmland Property Taxes will cause immense stress and trauma for the farm families who are so devoted to producing healthy crops and animals for the 2nd tier of retailers. As it is and continues to occur our fertile agricultural land is consistently being used up for suburban house and commercial developments! This encroachment of new development will one day cause farmers to finally break the last straw of a viable farm industry which was the very first industry in this great country of ours! Our forefathers worked the virgin land to make it useful and cleared hundreds of thousands of acres just so that we could continue on in their footsteps ; however, it would be a terrible shame if we would have to lose this land to exorbitant "farm property taxes"! Let us join in large numbers to let mpac and regional governments know what is at stake in this crucial decision making development immediately before it is "too late for the devoted farmers" who want to pass this precious land down to their kin just like our forefathers did before us. Ron Jordan....a concerned farmer of the land in Ontario.

Richard James says on November 3, 2017 at 9:16 PM

Retiring farmers when renting to a tenant farmer will be assessed only on the workable land,wood lots are classed as residential, This was.t made public.

Maura romanelli says on November 5, 2017 at 8:26 AM

Yes property values are up but that is irrelevant If income has not increased. Now with the region and province restricting our use of our Farm with this natural heritage layer. We are being told keep your farm as a showpiece for bike riders and city dwellers to look at as they come by and litter on our property but you can’t use your property for farm use because it causes noise and odor to your neighbors. Last time I looked it was my families name on the deed and not the city or province. OFA we need you as an organization with power to represent us little guys because these power struggles are only getting worse. In 5 years Halton will run out of land to develop, so where are they going to get money to pay their bills? From us! So unfortunately OFA get ready to the fact that you will need a department designated alone just to fight for us and our rights. From Hydro issues and property issues, property tax issues, income tax etc.... that future is here already!!!! God Help Us and keep the OFA strong We need you to tell the government to be responsible with their money and cut down spending on every level and stop asking us because they can’t balance their own books. Enough from me but you get the idea Thankyou

Mario Roy says on November 7, 2017 at 1:21 PM

Counties are distributed entities. Should they all be lobbied individually or with a more provincial approach? What is the OFA plan for their involvement in these discussion? What is the strategy? A united approach is going to be more effective than individual initiatives. There could be a benefit to have a party to commit to improvement before the next provincial election.

Frank Dolmage says on November 12, 2017 at 5:48 PM

The Ontario Federation of Agriculture (OFA) has been advocating for fair farmland tax rates across Ontario. IS ANY HEADWAY TO REDUCTION RESULTING FROM THE OFA ADVOCACY TO DATE? (wish to remain anonymos)

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