November 22, 2010              

LENNOX & ADDINGTON COUNTY COUNCIL RAISES CONCERNS ABOUT ONTARIO FARMLAND TAX PROGRAM & MANAGED FOREST TAX INCENTIVE PROGRAM

At its Working Session, November 10, 2010, Lennox & Addington County Council considered correspondence from the United Counties of Stormont, Dundas & Glengarry (SDG), and endorsed a resolution from SDG, regarding the Ontario Farmland Tax program and the Managed Forest Tax Incentive Program.

Under the Farm Property Taxation Policy, eligible farm properties are taxed at 25% of the municipal residential tax rate. The Managed Forest Tax Incentive Program, available to landowners who own four hectares or more of forest land, and follow a Managed Forest Plan, enables eligible landowners to be taxed at 25% of the municipal tax rate set for residential properties.

Stormont, Dundas & Glengarry Council points out that the Province of Ontario requires rural municipalities with qualifying properties to fund the programs, by lowering tax rates for those landowners, resulting in the loss of 75% of the property taxes that otherwise would be paid. Municipalities have no involvement in the approval of eligible properties. The burden was shifted to rural municipalities in 1998, when the Province eliminated the farm tax and managed forest rebates, which it had previously funded from its own revenues,  and, in effect, downloaded the impact of those programs to municipalities. Although some re-imbursement is available, only 75 of 335 municipalities, or 22%, receive even partial compensation. 

It is estimated that the impact on the County of Lennox & Addington and its four lower tier municipalities is a loss of revenue of approximately $1.2 million per year.

Warden Henry Hogg said, “The County of Lennox & Addington recognizes the importance of farms and forest properties, not only to our county community, but also to the entire province. We acknowledge that giving tax relief to the owners of farms helps to sustain our vital agriculture industry and to lower food costs. Tax relief to forested property owners promotes good stewardship and protects our forests and our environment in general.”  

Warden Hogg went on to say, “These programs are important, but it must be recognized that they are not beneficial only to our rural residents, but to all residents of the province. We agree with SD&G’s position that it is, therefore, unfair to place the financial burden of these programs on rural municipalities, but should be the responsibility of all Ontarians.”

The discussion highlights the irony that, because of shortfalls in rural areas, municipalities are forced to raise taxes, and the financial burden falls on homeowners, farmers and landowners – the very people who are supposed to be benefiting from the program, not paying for them.

For a number of years, local Councils have been petitioning the Province about the financial impact of the downloading of these two programs. In 2007, Premier McGuinty stated that the funding of these rebates would be considered as part of the review of provincial-municipal funding arrangements. Local municipalities acknowledge the benefits of the Province’s re-assumption of some social services program costs but note that no change occurred around the Managed Forest Tax Incentive or the Farmland Tax policy.

Rural governments and the Eastern Ontario Wardens’ Caucus are working together to inform citizens of the unfairness of this situation and to petition the Province of Ontario to fully reimburse the 75% taxation shortfall, which occurs as a result of the way these programs are administered. All Ontario residents are asked to express their concerns to their local MPP’s.

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For further information, please contact:

Larry Keech, Chief Administrative Officer/Clerk
County of Lennox & Addington
97 Thomas Street E., Napanee ON K7R 4B9
613.354.4883
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Stephen Fox, Director, Financial Services
County of Lennox & Addington
97 Thomas Street E., Napanee ON K7R 4B9
613.354.4883
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