The Grey County Ag Federation says a decision by the County is good news for farmers.
County Committee of the Whole voted Thursday (Apr 23rd) to reduce the local farm tax rate from .25 per cent to .218 per cent (It still needs to pass the bylaw at the next council meeting).
Grey Agriculture Federation President Hugh Simpson says the 51-39 vote in favour comes after significant year-long campaigning by local farmers to reduce the rate.
Simpson says it may seem symbolic, but it also matters, “The farm community, like many is working on slim margins, and so we have been on a campaign over the last couple of years to have the County recognize the overall economic contribution and social and cultural contribution that the farm community makes to Grey County.”
Simpson says, in the last valuation cycle (between 2012 and 2016) MPAC assessment on many farms in the area went up by as much as 70 per cent.
Simpson says if that increased value was applied to the current taxation model, in some cases it could double some farm property taxes.
He says adjusting the model makes it so the impact of that new valuation doesn't send farmers into a tipping point.
Ontario's residential tax rate is 1 per cent and the Province sets the farm tax rate at .25 per cent. The County has the option of further reducing that, and last year it reduced the farm rate to .24
Simpson says, it seems small but it matters, “The farm community, like many is working on slim margins, and so we have been on a campaign over the last couple of years to have the County recognize the overall economic contribution and social and cultural contribution that the farm community makes to Grey County and have them adjust their model so that the impact of that new valuation doesn't send farmers into a tipping point.”
He says it adjusts things so farmers are paying the same percentage burden that they've been paying historically which is 4.2 per cent of the overall tax burden.
In order to make this tax rate reduction, the burden is shifted to residential ratepayers across the County.
County Communications Manager Rob Hatten says for a house valued at $300,000 it would mean an increase of about $4.08 for the County Levy. Hatten says local levies would also be impacted, but the amount will vary in each municipality depending on how much farmland it has.
A County calculation using Grey Highlands shows a predicted $16.17 increase for a $300,000 home.
The vote for the change was 51-39. Simpson says that shows more communities voted in favour of the change than they did last year.
He says he's pleased with the decision, “It sends a strong message I think, from Council that there is a recognition of the materiality of the farm community and also some of the unique conditions that the farm community is working in at the moment.”
He adds, “I'm not just talking about COVID-19, but we've got farms and processing plants that are limiting the number of product that can come in, so that's driving protein prices down. Farmers are having to keep livestock on the farm and feed them with the risk that they get too big, and then there's an even further discount when they do take them to market.”