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Better Farming Ontario magazine is published 11 times per year. After each edition is published, we share featured articles online.


Fruit and vegetable growers want health tax exemption

Thursday, May 6, 2010

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by SUSAN MANN

When the Ontario government implemented its latest minimum wage increase it bumped some farmers into an employer category that requires them to pay employer health tax.

The Ontario Fruit and Vegetable Growers’ Association asked Ontario Premier Dalton McGuinty in a letter earlier this spring to exempt farmers from paying the tax when the minimum wage went to $10.25 an hour from $9.50 an hour. The change came into effect in March. Art Smith, Association CEO, says the Premier told them in a letter that he sent their request to the revenue minister for consideration.

“We’re looking for an offset and that’s a straight exemption,” Smith says, noting he doesn’t know how many farmers are affected.

The rate applied — there are nine — depends on the amount of an employer’s annual pay roll. Employers don’t have to pay the tax on the first $400,000. A business with an annual payroll of $500,000 could expect to pay $1,950 in tax on the $100,000 above the exempted amount.

Smith says the horticultural industry is paying $70 to $80 million more in wages annually compared to 2007, when minimum wage was $8 an hour.

Farmers say they can’t pass those wage increases on to their customers. Ken Forth, chair of the agricultural industry’s Labour Issues Coordinating Committee, says he doesn’t have any mechanism to put his prices up.

Forth says other businesses, such as restaurants and corner stores, can increase their prices slightly to cover the wage increases. But farmers cannot. “We are at the mercy of a global market here.”

Forth adds the price of fruits and vegetables in Ontario (and Canada) are determined “by the cheapest price that can be delivered to Toronto, whether that’s from Chile, Michigan, California or China.”

But farmers in some countries that ship their products here pay far less for wages than Ontario growers. In Mexico, farm workers earn just $5 a day, he says.

Brian Gilroy, Association chair, says escalating labour costs have contributed to a 25 per cent increase in growers’ costs of production since 2003.

“Our cost of production has gone up way too fast and labour is a big chunk of that,” he says. BF   
 

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