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March 14, 2005
COMMERCIAL TAX ELIMINATED FOR HORSE FARMS!
On Friday, March 11, 2005, Minister of Finance, Greg Sorbara, formally
announced his decision to direct the Municipal Property Assessment Corporation
(MPAC) to adopt and implement the recommendations put forward in their report on
appropriate criteria for assessing equestrian facilities. March 14 saw the
Ministry of Finance pass O.Reg. 100/05 that amends the property classification
regulation (O.Reg 282/98) to change the way equestrian operations are assessed
and classified. The regulation comes into effect for the 2004 and subsequent
taxation years.
"The new criteria for assessing horse farms represents an appropriate balance
between fair treatment for horse farm owners and consistency with other types of
properties," said Greg Sorbara, Minister of Finance. "We remain committed to
continuing to work with MPAC to find further ways to improve the quality and
consistency of property assessments in Ontario."
On August 18, 2004, the Association of Riding Establishments of Ontario
(ARE-ONT), in partnership with the Ontario Equestrian Federation (OEF), formed a
Committee to address the property tax issues surrounding horse farms and riding
establishments.
Since August, volunteer co-chairs of the Committee, Jim Waechter and Leslie
Brooks, diligently researched and organized the steps needed to make the
necessary changes to ensure fair and equitable property assessment of equestrian
facilities. In addition to meeting with politicians, agricultural groups and
members of MPAC, itself, Jim and Leslie spearheaded a letter writing campaign in
order to draw attention to the disastrous consequences of the recent property
assessments by MPAC on equine establishments. Working closely with Marcia
Barrett and Al Patterson of the OEF, the Committee strived to have a single
strategy in order to implement the changes that were required.
In response to the letter writing campaign, Sorbara had asked MPAC in early
February to meet with representatives from equestrian associations to develop
the appropriate criteria. The Ontario Equestrian Federation and the Association
of Riding Establishments of Ontario, the Ministry of Agriculture and Food, MPAC
and the Ministry of Finance participated in the discussions. The Ontario
Federation of Agriculture and the Christian Farmers Federation of Ontario were
also consulted to provide insight into the views of the farm community on this
issue.
D
uring the discussions, the OEF made it clear that any resolution to this
issue must not impair the horse industry’s economic viability as well as provide
consistent taxation treatment across the horse-racing and equestrian industries.
To this end, MPAC recommended to Sorbara that:
- only activities that occur on equestrian facilities that are commercial in
nature be treated as commercial property (tack shops, premises used to sell
equestrian supplies or clothing; restaurants; snack bars; cafeterias; commercial
race tracks and slots; grandstands; banquet halls; and areas used to provide
blacksmith, farrier or other retail services to the public)
- activities that are agricultural in nature be assessed at their current use
value and classified as residential or as farm. These uses include: maintaining,
raising and selling horses; breeding horses; boarding horses; and training
horses, excluding the training that naturally occurs during riding lessons
offered to the public. Under this regulation, the boarding of horses, regardless
of who owns the horses, now qualifies for the farm valuation treatment. The
classification of the property will depend on whether the owner qualifies for
the farm tax rate. If the owner qualifies, the property will be classified as
farm. If the owner does not qualify, the property will be classified as
residential. It is important to note, however, that these activities are not
considered to be farm activities when they are conducted for recreational or
hobby purposes.
- some activities be considered as rural recreational in nature, similar to
other land intensive, rural recreational activities, such as golf courses and
ski hills. Where land is used exclusively to provide riding lessons, trail
rides, or riding camps to the public and not in conjunction with any other
farming activities; bunkhouses or camping facilities; or where horses are kept
for recreational or hobby purposes; would be classified in the residential tax
class.
The revised assessment criteria will be retroactive to January 1, 2004.
This announcement comes as a huge relief to the many horse farm owners who
have been reassessed at a commercial property tax rate by MPAC as well as the
thousands of others who have yet to be reassessed.
The implications of the commercial tax rate upon horse farms were becoming
disastrous, as many farms found themselves downsizing and even closing doors.
The effects were also being felt by those in the greater agricultural community
who were not specifically horse owners (for example, hay and feed suppliers,
tack shops, farrier and other horse health practitioners, and pharmaceutical
firms to name a few).
The OEF and ARE-ONT are both extremely pleased with the Minister’s ruling.
“The OEF, along with volunteers Leslie Brooks and Jim Waechter, have devoted a
lot of time and effort towards this issue. We are delighted to see that
equestrian facilities will now be assessed in a fair and equitable manner,”
stated OEF President, Allan Ehrlick.
"This is good news for equestrian farm owners, not only because the new
assessment criteria will be more equitable for all concerned but because it
recognizes the different land uses within our sector," said Marcia Barrett,
Executive Director of the OEF. "We also appreciate being involved in the quick
and effective consultations that led up to this decision."
"Ontario farmers provide unique and valuable services that contribute to our
quality of life and we must be sensitive to their requirements," said Steve
Peters, Minister of Agriculture and Food. "It is important that we recognize the
different types of activities which are part of our agricultural community and
treat them fairly."
The horse community as well as the OEF membership are relieved and grateful
for the efforts taken on their behalf by the OEF and ARE-ONT. “Our
congratulations and sincere thanks to the OEF and all the people who worked so
unbelievably hard to get this accomplished. We're proud to be members of the
OEF.” “This is wonderful news! Thanks for your efforts!” ”Congratulations on a
job well done.” “I just wanted to thank you, on behalf of myself and my friends
who are all recreational riders, for your efforts with respect to the recent
MPAC/Ministry of Finance decision. It couldn't be more clear to me that my
membership dues are really paying off!”
There may be some unique circumstances and minor details that still need to
be discussed, but the OEF and MPAC have agreed that they would continue to work
together to resolve any issues that may arise.
Horse farm property owners who believe their current assessments are not
correct or have been assessed as commercial or partially commercial should phone
MPAC at 1-866-296-MPAC (6722) and they will be prompted to be directed to
specifically trained call centre staff who are ready to initiate the process to
have their tax assessments corrected and revised back to Jan 1, 2004.
The OEF has taken further steps to seek retroactivity prior to 2004 in an
effort to ease the financial burden on horse farm owners assessed before that
date, and has asked Minister Sorbara to reconsider his directive.
Any further updates will be posted on the OEF website: www.horse.on.ca
ONTARIO EQUESTRIAN
FEDERATION
9120 Leslie Street, Suite 203, Richmond Hill, ON L4B 3J9
Phone:
905-709-6545 Tollfree: 1-877-441-7112 Fax: 905-709-1867 Email: horse@horse.on.ca
Web: www.horse.on.ca
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