- by Pat Jilesen, Director, Ontario Federation of Agriculture

Explaining Ontario’s property tax system and how farmland taxes are calculated is a complicated issue. The Ontario Federation of Agriculture (OFA) has been meeting with municipalities across the province to talk about the property tax system and asking municipal councils to reduce the farmland tax ratio. We’re making some head way, but it’s been a frustrating process.

Here’s the problem. Farmland values have been rising at a faster rate than rural residential property values. As assessment values increase, so do taxes, unless municipalities act. This means that, unless action is taken, farmers are now carrying far too much of the tax burden – without needing more of the municipal services their taxes are paying for. But municipalities have the power to lessen this burden if they choose.

Farm property tax rates are legislated by the provincial government to be up to 25% of the residential rate to reflect the fact that farmland uses fewer municipal services than residences. OFA has been meeting with municipalities to encourage them to reduce the farm property tax ratio to less than 25% to help lessen the tax burden on farmers. It’s a small but significant request that would help correct the disproportionate amount of property taxes that farmers are paying for, compared to the services they use.

OFA recognizes that, although there are municipal councils that do understand the farmland property tax ratios and the impact rising farmland values are having on farm tax bills, there remain many that have not acted. In some areas, farm property taxes are rising by more than 15% each year as a result of recent property assessments. These steep tax bill spikes are disproportionate to residential taxes in the same area.

In southwestern Ontario alone, five municipalities have recently voted against lowering their tax ratios, pushing those farmers to take an unfair tax hit. Because those municipalities chose not to act, they have transferred a tax burden away from other property owners and onto farmers. However, sixteen municipalities across the province have acted in favour of Ontario farmers by lowering their farmland tax ratios, these include:

Brant
Caledon
Chatham-Kent
Dufferin
Elgin
Halton Region
Hamilton
Kingston
Lambton
Lennox and Addington
London
North Bay
Ottawa
Oxford
Prince Edward
Region of Durham

OFA will continue to advocate for fair farm tax ratios that reflect the municipal services used for farmland, and ultimately helping reduce the unfair property tax burden on many Ontario farmers.