Ontario farms taxed at industrial rates?
Saturday, February 19, 2011
by BETTER FARMING STAFF
Ottawa lawyer Donald Good says if the Municipal Property Assessment Corporation can classify Gordon and Lynda Lorentz’s alfalfa pelleting plant site as industry, it can classify and tax almost any farming activity accordingly.
Good represented Lorentz Farms Limited in Superior Court in London last fall as owners Lynda and George Lorentz sought leave to appeal the classification of their alfalfa pelleting plant west of St. Clements as industrial. This week the court justice ruled for the Assessment Review Board, which backed up MPAC’s classification.
“We are definitely not happy with this judge’s decision,” says Lynda Lorentz.
Good believes there are implications for all farming operations. If the definition of processing is adding value to a product “then it is not a big stretch that anything a farmer does could be industrial and all farming could be industrial.”
Good thinks the next step for farmers must be political and their farm organizations must get involved. There are exemptions to the rules for agriculture but “they are not well defined. They are not even well understood.” He mentioned maple syrup and horse farms as examples of groups that were reclassified and fought back.
George Lorentz says they dry their own alfalfa and sell the pellets to local feed mills. He sees no difference between his farm and those where farmers dry their grain and take it to the elevator. Issues with reclassification began after the mill was rebuilt to make it easier for their son to work in. He lost his hand in a harvesting accident in 2000.
“At the start it was just phenomenal,” George Lorentz says. “Every bin over a certain size was going to be charged as a building.” On their lawyer’s advice they withheld paying property taxes and, at one point, were close to $140,000 in arrears over two and a half years.
The tax bill is considerably lighter now, George says. Annual property taxes on the 2.6 acre mill site are about $9,000. He thinks it’s still too much and the emphasis on “processing” bothers him.
“What part of farming isn’t processing?” he asks. “You take hay off a field, it’s a process. You put in a mow, it’s a process. You take it out of the silo, it’s a process.” BF