Jackman-Atkinson: Making the farmers pay
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- Published on Wednesday, May 15, 2013
By: Kate Jackman-Atkinson
myWestman.ca
In Manitoba, our school divisions are funded through a levy on property taxes – a percentage of a property’s assessed value is paid to the local school division.
This means that all landowners pay education property taxes based on the value of their property, regardless of what the property is used for, the number of residents living at that property, their income, age or family structure.
For years, farm lobby groups have been calling for changes to the way education is funded in the province. Manitoba farmers are huge landowners and they pay millions in education taxes on crop land and pasture – land that is home to no one.
For years, farm lobby groups and others, have been asking for education to be funded from income taxes. This method would better reflect a person’s ability to pay and spread the load more equitably amongst all Manitobans. To this end, the provincial government’s Farmland School Tax Rebate was implemented in 2004 and increased from 33 per cent in 2004, to 80 per cent in 2012. These rebates silenced farm groups, but with big changes to the rebate announced in this year’s provincial budget, we are likely to hear renewed calls for change.
The major announcement in this year’s budget was a cap on the value of the school tax rebate. Regardless of farm size, each farmland owner can receive a maximum rebate of $5,000. Given the changing farm demographics, such as larger farms and increasing land values, this cap will have big implications.
According to the 2011 census, Manitoba is home to fewer but larger farms. The data showed that the average farm grew by 13.4 per cent between 2006 and 2011, while there was a 16.7 per cent decline in the number of farms. In 2011, there were 15,877 Manitoba farms with an average size of 1,135 acres.
When it comes to education property taxes, the growing farm size makes the inequities of this system obvious and means a declining number of farm families are paying an ever-increasing share of education taxes. With a cap on rebates, these farmers are going to shoulder even more of the burden.
About half of Manitoba farmland owners will be impacted by the rebate cap. Broadly speaking, the average value of a Manitoba farm is $1.13 million and depending on the local school division’s mill rate, the rebate cap will come into effect on landholdings with an assessed value around $1.3 million.
But the rebate cap isn’t the only way the government plans to save money on the backs of Manitoba farmland owners. This year’s budget announced that farmland owners who don’t live in Manitoba will be ineligible for the rebate. Since much of the land owned by non-residents is rented to Manitoba farmers, the changes are likely to result in increased rental rates and higher costs for Manitoba farmers.
The province has made one final negative change to the school tax rebate. They are shortening the time land owners have to apply for the rebate. In the past, land owners had three years to apply for their rebates. Starting in the 2013 tax year, applications for the rebate must be filed no later than March 31 of the following year. Since the applications can only be submitted once property taxes have been paid, land owners who are late paying their property taxes, will lose their school tax rebate as well.
The provincial government has made these changes to save money. They are estimating that in the 2013-2014 year, the savings will amount to $6.2 million. That’s $6.2 million directly from the pockets of Manitoba farmers – it’s money that farmers had last year, but won’t have this year. The government has realized that it can’t manage its money and is going to make farmers pay.
