HomeMy WebLinkAboutFND-003-06
C[cJ!illglOn
REPORT
FINANCE DEPARTMENT
Meeting:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date:
MONDAY MARCH 27, 2006
Resolution #:
Report #: FND-003-06
File #:
By-law #:
Subject:
AGRICULTURAL ADVISORY COMMITTEE OF CLARINGTON
RESOLUTIONS PERTAINING TO 2006 FARM TAXES
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report FND-003-06 be received for information.
2. THAT the two (2) resolutions dated February 9,2006 from the Agricultural
Advisory Committee of Clarington pertaining to 2006 farm taxes be received for
information;
3. THAT the Province of Ontario be requested to match the tax ratio reduction for
the education portion of the tax bill for farm properties;
4. THAT the Agricultural Advisory Committee of Clarington be advised of actions
taken by Council; and
5. THAT a copy of this report be forwarded to John O'Toole, MPP.
-"
~.\. "'In/G}
Reviewed by:/' ) ~~ .)~
'Franklin Wu,
Chief Administrative Officer.
NT/hjl
...
REPORT NO.: FND-003-06
PAGE 2
BACKGROUND AND COMMENT:
1.0 At the Agricultural Advisory Committee of Clarington's meeting of February 9,
2006, the following two resolutions pertaining to farm taxes were approved to be
forwarded to Council for consideration.
(a) WHEREAS farm property owners in Clarington have had the extra burden of
increases in property taxes more than other municipalities; and
WHEREAS, added to the crisis resulting from low commodity prices and unfair
competition of subsidized agricultural imports, and loss of markets caused by B.S.E.
disease; and
WHEREAS the input costs of energy, labour, taxes, etc., have made profitability and
sustainability impossible for agriculture; and
WHEREAS all levels of government have failed to adequately support agriculture
(however, some municipalities have deferred the farm property taxes for 2006 until
after harvest in 2006); and
THEREFORE be it resolved that the A.A.C.C. request Clarington Council to defer the
2006 taxes on farm properties until after December 1, 2006.
(b) THAT Clarington Council be requested to forward the decision to defer the 2006
taxes on farm properties until after December 1, 2006 to Regional Council for similar
action by the Region.
1.1 It is important to note that, in the first paragraph of resolution (a), it is referenced that
farm owners in Clarington have had the extra burden of increases in property taxes more
than other municipalities. This is not the case as is evidenced by the results of the BMA
Management Consulting study in which Clarington participated. The farmland taxes per
acre for Class 1 farmland through to Class 6 farmland are 25% to 30% less than the
average for the 67 municipalities represented in the study.
1.2 Concern has been voiced regarding the impact of reassessments on farm properties
since the new CVA system was introduced. While there is no question that Clarington
farmlands have experienced increased in assessment, this is generally offset by the
corresponding reduction in the tax rate in reassessment years. According to the Region
of Durham Finance Report #2006-F-15, the taxation shift between classes due to
reassessment is estimated to zero for farm properties. Also, according to the
presentation to the Finance and Administration Committee of Regional Council on
October 12, 2005, the cumulative impact of reassessments from 2000 through to 2006 is
$170,000 region-wide for farm properties.
The increase in assessed values only (not taxation) for 2006 for Clarington farm
properties is 17.16% compared to 13.5% province-wide.
REPORT NO.: FND-003-06
PAGE 3
1.3 The first resolution is requesting Council to defer the 2006 taxes on farm properties until
after December 1, 2006. The second request is to ask the Region of Durham to take
similar action. Several municipalities in the Province of Ontario have approved such a
resolution.
1.4 However, Clarington and the Region of Durham have made a permanent reduction in
farmland taxation beginning in 2005 through the lowering of the tax ratio for farmland.
The ratio was reduced from 25% of the residential rate of 23 1/3% in 2005. It is
proposed to be reduced to 21 2/3% in 2006 through the Region of Durham's long-term
property tax strategy. It is intended that this be reduced further to 20% of the residential
rate in 2007. For 2006, this represents an approximate 7% reduction on the local and
regional share of the average farmland tax bill.
1.5 Unfortunately, neither Clarington, nor the Region of Durham have the authority to amend
the tax ratios for the education portion of the tax bill. This falls under the authority of the
Province of Ontario. It is therefore recommended that the Province of Ontario, through
Clarington's member of Provincial Parliament John O'Toole, be requested to match the
tax ratio reductions for farmland properties in order that the savings be applied to the
entire tax bill for farm properties.
1.6 There are also practical problems presented by the request of the Clarington Agricultural
Advisory Committee. A property in its entirety can be coded to not charge interest but
not just the farm portion. This means that any residential or commercial component
would also be interest free. This would cause further inequities between taxpayers.
1.7 As Committee is aware, the municipal portion of the tax bill is only approximately 27%.
The balance goes to the Region of Durham and the school boards. There is no
mechanism to defer the payments to the school boards as the due dates are enshrined
in legislation. The due dates to the Region of Durham are also established by By-Law.
1.8 Finally, there is an overriding concern with equity and fairness to taxpayers. It has long
been put forward by municipalities and AMO that income distribution programs should
reside at the provincial or federal level. It is an unfair burden to add to local residential
taxpayers to further subsidize agricultural properties through the property tax base.
CONCLUSION:
2.0 For the reasons noted above, it is recommended that the two (2) resolutions put forward
by the Clarington Agricultural Advisory Committee pertaining to 2006 farm taxation be
received for information.
Copies to:
· Mr. John O'Toole, MPP
· Agricultural Advisory Committee of Clarington
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-4169