Municipal Land Tax Base

Res #: 7-02A
Number: 7
Year: 2002
Midterm: No
Expired: Yes
Responses Received: No
Departments: Matters Pertaining to SARM

Resolution 7-02A 

WHEREAS, the municipal land tax base is gradually being eroded by the conversion of agricultural land to wildlife habitat; and

WHEREAS, the North American Waterfowl Management Plan (NAWMP) has identified 5.2 million acres of land in Western Canada that is to be returned to wildlife habitat; and

WHEREAS, the NAWMP has, as of the 2000 report, accomplished 46% of this goal; and

WHEREAS, according to the said report, the NAWMP has budgeted $2.7 billion Canadian for this task and have only spent 21% of this sum to secure the 46% of targeted acres; and

WHEREAS, this work is being done by local and internationally based conservation groups such as Ducks Unlimited, which is the largest single land owner in the Province of Saskatchewan; and

WHEREAS, Statistics Canada reports in excess of a $6 billion benefit to the economy from wildlife and related activities; and

WHEREAS, taking these acres, and/or keeping them out of agricultural production decreases the municipal tax revenue from these acres, thus increasing the burden on the remaining land in the municipality; and

WHEREAS, when this land is kept out of production, it also reduces the gross sales of agricultural products from our municipalities, resulting in decreased local economic activity and a general reduction in the wealth of our communities;

THEREFORE BE IT RESOLVED, that SARM investigate any and all methods of increasing the property tax on lands that are currently, and will be in the future kept out of, or taken out of agricultural production and returned to wildlife habitat.

Response from SARM:

The following response was provided by SAMA:

1. In many rural municipalities Ducks Unlimited has purchased farm lands and now is the owner in fee simple of farmland

2. In some areas of Saskatchewan Ducks Unlimited has entered into conservation easements to manage lands owner by farmers. Conservation easements are where farmers have entered into a private agreement with Ducks Unlimited to manage their land. Conservation easements specify how the farmer wants the land to be used. For example a farmer may enter into a conservation easement with Ducks Unlimited which specifies that the land remain permanently in grass.

Under scenario 1, If Ducks Unlimited lands are taken out of cultivation and seeded to grass, but are suitable for cultivation, SAMA will continue to index these land as cultivated land and will value these lands the same as any other cultivated, arable land parcel is valued even though they may have been seeded to grass. Under the rules in SAMA's assessment manual, appraisers are required to inspect agricultural land and determine the suitability of the land for cultivation. Deeded lands that are suitable for cultivation will be valued as cultivated land, even if they have been seeded back to grass.

Under scenario 2, farmers may enter into conservation easements with companies such as Ducks Unlimited Canada or the Nature Conservancy of Canada. Under these conservation easements, farmers stipulate that the land is not to be grazed or not to broken up and left as native pasture or that sloughs are not to be drained on the land. SAMA employs mass appraisal techniques in valuing farmland. Mass appraisal methods do not take into consideration private agreements that farmers may enter into with regard to the way land is used or managed. A conservation easement between a farmer and Ducks Unlimited is a private agreement entered into between the two parties. On land that is held in fee simple ownership SAMA will continue to value the land as to it's suitability of use and not the uses agreed to in the privated agreement between Ducks Unlimited and the farmer.

Thus, if a quarter is in grass and a farmer has entered into a conservation easement that prohibits the land from being grazed, SAMA will:

1. Value the value the land as cultivated land if the land is suitable for cultivation

2. Value the land as pasture land if the land is best suited to grazing

3. If the land is not suitable for cultivation or pasture, the land may be valued as waste The conclusion that can be reached is that conservation easements and private land uses do not reflect the suitability of the potential productivity of the land and have no effect in the manner in which SAMA values farmland.