Increase Education Tax Rebate Program
Res #: 29-01M
Responses Received: No
Resolution No. 29-01M
WHEREAS, the 2001 reassessment has resulted in an increase in tax on agricultural lands on a province wide basis; and
WHEREAS, the agricultural sector cannot support this unjustified increase; and WHEREAS, the Provincial Government has committed to reducing the cost of education tax on property and currently the increases exceed any benefit received through the education tax rebate program;
THEREFORE BE IT RESOLVED, that SARM lobby the Provincial Government to increase the education tax rebate on agricultural property to 40% to mitigate the shift; and
BE IT FURTHER RESOLVED, that the Province continue with the Farm Land Education Tax Rebate Program until they can fulfill their commitment to reduce education tax on property.
Response from the Honourable Clay Serby, Minister of Agriculture and Food:
The government recognizes that property taxes are an important input cost and has taken action to mitigate the impact of reassessment on agricultural land. The percentage of value for rangeland was set at 50 per cent. In addition, increased funding for the Foundation Operating Grant has resulted in the largest annual increase in provincial government grants to schools in fifteen years. The government will continue to explore options to address farm income and taxation issues within the province. We have also allocated $50 million for the Farm Land Property Tax Rebate Program (FLPTRP) for the years 2000 and 2001.
The FLPTRP provides a rebate of 25 per cent on the education tax, not a flat rate. If the education portion of property taxes increases, the rebate will rise proportionally. Farmers will receive a rebate of 25 per cent on the re-assessed amount. The application deadline for both program years is February 15, 2002. At this time, there has been no decision to extend the program, but it will be taken into consideration during the 2002-03 budget development process.
The home quarter deduction was put in place in recognition that other property owners pay education tax on their lot and home, and buildings used for business. The intent was that owners of farm land would pay the full education tax on a home quarter or equivalent to provide a level of equity between farmers and other property owners. With respect to the administration of the program, when the rebate program was first announced, options for local delivery were considered. However, given that many landowners own land in more than one municipality and that rural municipalities do not have access to information in other municipalities necessary to verify applications, it was more appropriate to maintain a central administration.
The computer systems and audit processes to administer the home quarter deductions are now in place and it is our view the current administrative processes are providing for the timely and cost effective delivery of the program in 2001. SAF appreciates the cooperation from RM offices over the past year. While RM administrators are no expected to administer this program, we are aware that administrators do offer assistance and advice that is most valuable to their ratepayers.