BELLEVILLE – Hastings County has joined with the United Counties of Stormont, Dundas and Glengarry and the Eastern Ontario Wardens’ Caucus to fight “the province’s unjust treatment of property taxpayers,” a county press release says.
The problem is two provincially-mandated programs, the Farmland Tax Program and the Managed Forest Tax Incentive Program, which the Province requires municipalities to fund through property taxes.
“Hastings County fully endorses this campaign and as my counterpart in the United Counties of Stormont, Dundas and Glengarry states there is no question that Ontario’s farms and forests, and the people who take care of them, deserve our support,” noted Joanne Albert, Warden of Hastings County.
“Giving tax relief to owners of the province’s farms and woodlands helps to lower food costs and protect forests for recreational and environmental purposes,” said Bryan McGillis, Warden of SD&G Counties.
“These programs are very important and everyone in Ontario shares in the benefits.But the way they are run now, rural areas are being saddled with an unaffordable financial burden.”
In Hastings our local municipalities have been hit hard,” said Joanne Albert, Warden of Hastings County.
As an example, Stirling-Rawdon in 2008 they experienced a net loss of revenue of of $295,000, which translated in to an property tax burden of 12%. “In other words, property taxes were 12% higher than they should have been if they were not carrying the burden for the Province,” Albert said.
“Only one of the fourteen member municipalities of the County escaped this problem and that was Deseronto where there are no managed forests or agricultural lands. The average added property tax burden was four (4%) percent across the county,” said Albert
The Province requires rural municipalities with qualifying properties to fund the programs by lowering the tax rates for those landowners, Hastings County says. That results in the loss of 75% of the property taxes that would otherwise be paid. Because the Province controls eligibility, the rural municipalities have no say over who gets the rebates. Municipalities recognize that blame for this unfair funding practice lies with the Province, not the landowners.
The burden was shifted onto rural municipalities in 1998, when the Province downloaded the cost of the programs, the county says. Although some reimbursement is available under a complex calculation determined by the Province, few governments qualify: only 75 municipalities, out of the 335 affected by the download, geteven partial compensation.
In 2008, the download cost municipalities more than $257 million, but the Province reimbursed only $50 million. The net cost to property taxpayers was $207 million in that one year alone.
In the face of these shortfalls, local councils in rural areas have no choice but to raise property taxes. In these municipalities, the financial burden falls largely on homeowners, farmers and other private landowners – many of whom are supposed to be benefiting from the programs, not helping to pay for them.
In many municipalities, property taxes are as much as 20% higher than they would be with fair funding for these necessary provincial programs. In one municipality alone, the annual loss in revenues is $18 million a year.
Over the years, councils have expressed their concerns about the financial impact of the downloaded farm and forest tax rebate. In 2007 Premier McGuinty gave assurances that the funding of the rebates would be reconsidered as part of a broad-based review of provincial-municipal fiscal arrangements. The review resulted in the Province reassuming some social program costs that affected all municipalities.
But nothing came out of the promise to reconsider this specific download that targets rural municipalities, the county says.
Rural governments across Ontario are working together to inform citizens of this unfair treatment that sends much of the bill for rebates to the very people who are supposed to benefit from them, working against the goals of lower-cost food and properly managed forests. Municipalities support and want to maintain the current practice of billing farms and managed woodlots for only 25% of what they would otherwise pay in property tax. The Province, however, needs to fully reimburse the 75% shortfall to all municipalities.
All Ontario residents are asked to express their concerns to their MPPs, who in many cases appear to be unaware of the issue.