Residential tax increase reset at 3.5%

Farmers granted belated tax break

Norfolk council this week granted farmers a break on their property taxes. The foregone revenue will be recouped through a corresponding increase on residential taxes.

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The good news is Norfolk farmers have been granted a belated break on their taxes.

The bad news is residential property owners in Norfolk will make up the lion’s share of the difference.

Norfolk council agreed to the move Tuesday when it reduced the multiplier for calculating farm taxes relative to the residential tax rate.

The move will reduce the total amount of farm taxes collected in Norfolk this year from $5.8 million to $5.36 million.

Most of the lost revenue will be made up from increased residential taxes, which account for 80 per cent of the county levy.

As a result, the 3.1 per cent increase in residential taxes reported in January will top out this year instead at 3.5 percent.

Norfolk farm representatives have asked council repeatedly in recent years to do something about the galloping tax increases afflicting the agricultural community. Strong demand for agricultural land in southern Ontario coupled with a high price-per-acre have contributed to the tax burden.

Meanwhile, commodity prices have softened in recent years while input costs have gone up. In recent months, diplomatic tensions with China have made it more difficult to export Canadian output to the vast Asian market. As a result, farmers are finding it increasingly difficult to pay their overhead while feeding Canadian households.

“Now is a good time to do this,” said Langton Coun. Roger Geysens.

Since 2012, the value of farmland in Norfolk has greatly outpaced every other property class except managed forest.

A report from the Norfolk treasury department says the total assessed value of farmland in Norfolk in 2012 was $1.5 billion. In 2016, that had risen to $2.5 billion – an increase in four years of 65.4 per cent.

The report says Norfolk collected $3.8 million in farm taxes in 2016.

This was poised to rise to $5.8 million in 2019 before this week’s adjustment. Windham Coun. Chris Van Paassen commented that this is quite a large increase in taxes on land that makes few demands on municipal services.

The Municipal Property Assessment Corporation agreed to phase in the 2016 assessment over four years, ending in 2020. On farmland, that works out to 16 per cent a year from 2017 to 2020 inclusive.

Since its inception, Norfolk County has taxed agricultural land at 25 per cent of the residential rate. The reduction approved this week was achieved by lowering this multiplier to 23 per cent.

Council was poised Tuesday to lower the multiplier further still to 22 per cent. However, council members balked when treasury staff informed them this would force this year’s residential tax increase up to 3.8 per cent.

Agricultural representatives last asked council for a farm tax reduction in January. An Ontario Federation of Agriculture economist said a multiplier of 23 per cent would be fair.

“I don’t think the OFA can complain if we give them what they asked for,” said Port Rowan Coun. Tom Masschaele, who initially supported the reduction to 22 per cent.

With the adjusted rate in place, the total levy on single-family dwellings in Norfolk this year will rise to $71.35 million from the $70.9 million approved in January.

In her report to council, Norfolk tax collector Sue Boughner noted that 27 of 35 municipalities surveyed tax farmland at 25 per cent the rate of residential property. The remaining eight have adopted a multiplier less than this amount.

The multiplier in Durham Region and Halton Region is 20 per cent while the multiplier in Hamilton is 18 per cent.

MSonnenberg@postmedia.com

 

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