Municipalities axe tough times tax relief

Mar 19 2008

Two municipalities that offered their farmers tax relief during tough times are axing their programs. This month, the Municipality of Huron East in Huron County ended a voluntary program introduced four years ago that allowed farmers to defer paying property taxes until the end of September without incurring interest penalties.
Mayor Joe Seili said tax deferral was initially introduced to send a message to federal and provincial governments that the grains and oilseeds sector was “in dire straits” because of exceedingly low market prices.
It was also intended to ease financial pressures on farmers buying inputs at the same time they had to pay their first tax installments.
The township still charged for the residential part of their property taxes, but deferred tax on the farmland portion until later in September, at harvest time.
The program cost the municipality $18,000 to $24,000 annually in lost interest and financing is needed for other projects, Seili said. Farmers can still defer their taxes in 2008. The program was extended this year because of the pressures beef and pork farmers are experiencing with a high Canadian dollar and rising feed costs.
Meanwhile, in nearby Grey County, the township of Southgate is dropping a program that relieved some farmers from having to pay interest on property back taxes.
The program, renewed annually, applied specifically to cattle producers and was introduced shortly after the eruption of the BSE crisis in 2003.
The program was established at the request of the GreyCounty Federation of Agriculture. Describing the situation as an "unforeseen crisis," the interest relief was "our little token" of help, said Don Lewis, the township's mayor.
At a recent council meeting, a motion to extend the program to swine operators was defeated.
Lewis, who was away when the issue was debated, said the program had been offered for several years, but few farmers took advantage of it. Since it was introduced, only "a few hudred dollars" in interest has been waived, he said. While there is quite a large population of cattle producers in the township, its population of swine producers is much smaller. Council felt that it just wouldn't be worth the paperwork to extend the program to swine operators, he said.
The program hasn't been renewed for cattle producers this year, either. "If nobody's using it, why do you keep it, right?" Lewis said.
In Huron County’s Municipality of Morris-Turnberry, however, a program similar to the one operated by Huron East will go ahead for this year. It too is approved year-to-year.
Nancy Michie, the municipality’s administrator clerk-treasurer, said council introduced the program last year to help “farmers at a time when they have to spend a lot of money on their crops,” she said.
So far, about only about 37 per cent of the farmers they had anticipated have actually taken advantage of it, she said. Nearly half of the municipality’s 1,823 properties are assessed for farmland.
Observing that some municipalities initially put such programs in place to aid grains and oilseed growers, Geri Kamenz, president of the Ontario Federation of Agriculture, noted it’s difficult “to make a substantive argument that grains and oilseeds prices are in crisis.”
Nevertheless, he encouraged municipalities with tax relief programs in place to consider the number of red meat producers such as beef and pork as well horticultural producers affected before deciding to end them. All three sectors are facing tough times because of the high Canadian dollar.
“I would offer it is probably worth extending the same courtesy to that group of individuals who find themselves between a rock and a hard place,” he said. BF