By Tom Collins
IROQUOIS — An Eastern Ontario dairy farmer hasn’t paid taxes for his on-farm processing plant for two years after the plant was zoned industrial instead of agricultural.
Iroquois’ Josh and Rudi Biemond opened Upper Canada Creamery in August, 2015 and was almost immediately dinged with a zoning change. The Municipal Property Assessment Corporation (MPAC) said the 8,200-sq.-ft. processing plant, used to turn the on-farm organic milk into yogurt, should be zoned industrial instead of agricultural.
About half of the building is the processing plant while the other half is a storefront and office. Biemond plans to appeal to have half the building zoned commercial.
According to Ontario regulations (282/98 Section 6, subsection 1) a piece of property would be classified as industrial if it is used for or in connection with “manufacturing, producing or processing anything.” It doesn’t matter what classification the property was beforehand.
The Biemonds have refused to pay their new property tax bill. They are being charged about $18,000 a year for the plant under the industrial rate, but estimate it would be about $3,000 to $4,000 if it were zoned agricultural. It will be two years this June since they last paid their tax bill, at which point they’ll owe $36,000 plus interest.
“I have not paid my tax bill and I’m holding to that,” said Biemond. “If you look at my financials, growing a small business, there is not that kind of money in the cash flow. There’s no way we can account for that kind of tax rate.”
The provincial government is working on a new classification for on-farm processing, but it could take years before that classification is ready.
Biemond said the township has the authority to take the keys after three years of not paying taxes. He’s putting money away every month into a trust to pay up when everything is resolved.
John Miller, of Miller’s Dairy in Western Ontario, went through the same battle. He was charged industrial taxes of about $18,000 a year on a 6,000-sq.-ft. processing plant, instead of agricultural taxes of $2,000 to $3,000.
He agreed to a reduction in the valuation on the plant from $550,000 to $372,000, which saves him about $5,500 a year in taxes.