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Talking property tax assessment on value-added activities on the farm

Better Farming caught up with OFA researcher Ben LeFort

By Diego Flammini
Assistant Editor, North American Content

During the Ontario Federation of Agriculture’s (OFA) tailgate party for Junior Farmers at the Ottawa Valley Farm Show, the subject of property tax assessments on value-added activities came up in conversation.

Better Farming sat down with Ben LeFort, a farm policy researcher with OFA, to get a better understanding of value-added activities and how they could impact a farmer’s property tax.

Better Farming (BF): What are value-added activities as they relates to farming?

Ben Le Fort (BLF): As they relate to farming and assessment, value-added activities are a commercial or industrial use that’s an extension of the farm business, like on-farm retail or on-farm processing.

BF: What does value-added really mean?

BLF: (Value-added) means it’s one step above primary production. If you take a commodity, and then you package it and sell it – that’s gone from the primary agriculture, which is the growing of the commodity, to the packaging and selling, which is the value-added activity. Or taking a raw commodity and turning it into a finished, processed food, that’s another example. But it has to be directly related to primary ag production.

Ben LeFort

BF: How does dual use differ from value-added?

BLF: Dual use is a commercial or industrial business located on a farm. If you had a machine repair shop on the farm, that would be considered dual use because it has nothing to do with the growing of any commodities. The processing of a raw commodity is value-added. Dual use is not related to the production of agricultural products.

BF: How will this impact farm assessment?

BLF: If you are engaged in a value-added activity, the land underneath the building is still valued as farmland. But it will be taxed at the commercial or industrial rate, depending on the use. The building itself will be assessed at the commercial or industrial rate so it has a dramatic impact on the amount of property tax payable.

BF: What is OFA doing to help its members with these scenarios?

BLF: We’ve been lobbying hard on this issue for many years. At the last provincial budget, there was a commitment by the Province to work with the OFA on this issue. We continue to have very productive discussions and push this issue forward. We will continue to do so until we have a resolution that is going to be helpful to our members.

The Ottawa Valley Farm Show continues through March 16.

Use the hashtag #OVFS17 to follow the show on social media.

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