By Tom Collins
CREEMORE — A Western Ontario dairy farmer said farmers should be worried about increasing taxes if they build processing facilities on their farms.
Last November, John Miller of Miller’s Dairy in Creemore, west of Barrie, was billed $37,000 in back taxes by the Municipal Property Assessment Corporation (MPAC) because his 2012-built, 6,000-sq.-ft. processing facility is now considered industrial.
“It’s problematic for anyone wanting to do value-added in dairy but it’s a concern with a lot of other commodities too,” he said. “MPAC is viewing a lot of farm activities as an opportunity to generate tax revenue. Everybody that’s doing value-added work on their farms should be paying attention to this.”
Miller said he heard of one farmer who does seed cleaning and is worried that he could be designated as industrial as well. 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 Ontario Federation of Agriculture hopes to meet with the minister of finance to define what should be zoned agricultural and industrial, as this issue has affected other commodities such as maple syrup, apples and cherries.
Miller’s processing plant is now taxed at $16,000 a year, instead of $2,000. His 1,200-acre crop and dairy farm is unaffected. Miller now owes $50,000 but will not pay as he has appealed to an independent arbitrator.
The arbitration goes through Environment and Land Tribunals Ontario, which is completely separate from MPAC.
A hearing is scheduled for mid-February to look into what Miller calls inconsistencies in MPAC rulings. Meantime, Dairy Farmers of Ontario representatives are trying to get an MPAC clarification of the rules for all dairy farmers from the deputy minister of finance.
Miller said MPAC is not designating properties in a consistent way. He’s heard of one farm in his county that has the same type of processing facility but the assessed value is five times less than Miller’s farm. Miller said some farmers are reluctant to speak up as they are worried MPAC might assess them at higher rates.
Miller said another discrepancy is that his plant cost $325,000 to build, but is assessed at $550,000.
Miller has hired Toronto lawyer Jack Walker, who specializes in fighting tax designations, including winning a case for a golf course that changed valuations for all golf courses in Ontario.
