What is a farm question causes lost revenue to municipalities

Generally, in Canada, provincial legislation requires municipalities to provide a substantial reduction in property taxes to lands considered to be used for farming. However those same laws often avoid the question of the definition of a farm. In Ontario:

  • raising of horses for racing,
  • growing of crops for energy,
  • raising of grapes and grains for alcoholic beverages, and
  • raising of crops for medicinal ingredients, including medical marijuana,

are all considered agricultural activities and qualify the landowner or tenant for reduced property taxes. Forested lands are covered until a different regulation but also qualify for reduced property taxes. Every property that receives a farm property tax reduction means that other taxpayers in the municipality pay higher taxes in order to contribute towards the municipality’s budget.

This issue has recently come to the forefront in Metro Vancouver because of the concern of some council members about granting property tax reductions to legal medical marijuana production facilities.

The objective of farm property tax reduction seems to be to provide a subsidy to farmers. The province of Newfoundland and Labrador expresses it as:

  • Encourage owners of idle land to put it into farm production.
  • Provides some tax relief to farmers who have high assessments due to the relatively large amount of land that they require to operate effectively.

The first objective is clearly in conflict with protection of species at risk legislation. Such species as monarch butterflies and bobolinks require open areas of land for their survival. The idea that every square metre of land should be in ‘productive’ use is absurd if we also consider protection of open space loving species to be a valid objective. Landowners should be encouraged to maintain open areas of land populated with a multitude of unharvested native species in order to support habitat for species at risk, or at risk of becoming ‘at risk’.

The second objective would surely suggest that farm property tax relief is for farmers that produce food. Why should landowners who produce alcoholic beverages, crops for fuel ethanol for vehicles, or medical marijuana receive a tax subsidy from all other taxpayers while landowners who maintain habitat for species at risk or passive parks for recreation pay full property taxes.

Metro Vancouver council members are exploring the medical marijuana property tax break. It seems they might be on to something much bigger. A national dialogue about who pays property taxes and who gets an exemption, full or partial, appears to GallonDaily to be long overdue.

Relevant reports, with more details relevant to the BC situation, are available at http://www.metrovancouver.org/planning/development/AgricultureAndFood/Documents/Property_Tax_Scenario_Analysis_for_Agricultural_and_Industrial_Lands.pdf  and

https://www.documentcloud.org/documents/1183969-rpa-june-6-2014-agenda.html select page 114.

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