Cutting farmland taxes in Manitoba

Cutting farmland taxes in Manitoba
Feb 04, 2020

Premier Pallister has a 10-year plan to remove education property taxes

By Diego Flammini
Staff Writer
Farms.com

Manitoba’s premier is moving forward with one of his re-election campaign promises.

Brian Pallister’s government plans to phase out education property taxes on farmland and other properties. Officials will begin the process within the next two years, once the government balances its books, and will phase in the cuts over a 10-year period.

Phasing out the tax will save the average homeowner more than $2,000 each year, the premier said in his Nov. 2019 throne speech.

Manitoba collected $850 million in education property taxes during the 2018-19 tax year. Farmland and building owners contributed about $64 million of that total.

Farmland values in Manitoba increased by 5 per cent in 2017 and another 3.7 per cent in 2018, Farm Credit Canada’s 2018 Farmland Values Report says.

Depending on which region of the province a landowner is in, he or she could pay anywhere between $600 and $6,500 per acre for farmland.

The taxes are based on municipal property assessments, and the province’s school boards apply for the funding amounts they believe they require.

“With the appreciation in farmland values versus residential properties, farmland is paying a disproportionate amount of the education taxes for a school division,” Blaine Pedersen, Manitoba’s minister of agriculture and resource development, told Farms.com. “It has become a very big concern for Manitoba farmers.”

Phasing out the education tax from farmland is not a cut in funding for education, he said. Rather, the change is a shift in how education in the province is funded. Manitoba is reviewing its entire education system, Minister Pedersen added.

Manitoba farm organizations are pleased to see the provincial government act on the education tax.

“We have long advocated for the removal of education tax from farmland and farm production buildings,” Bill Campbell, president of the Keystone Agricultural Producers, told Farms.com.

A property tax bill in Manitoba is around a 50/50 split between education and municipal services.

Therefore, if a farmer is paying $100,000 annually on property taxes, about $50,000 of that amount is for the education tax.

“The landowner needs to pay the taxes,” Campbell said. “If the farmer is paying $50,000 of education tax, they may be eligible for a $5,000 tax rebate (to lower the amount the farmer pays). But that comes out of the province’s agriculture budget. So, we see the budget dealing with this when that money could be spent on research or business risk management programs or other areas.”

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