John Miller said he was shocked to learn his dairy farm had been classified industrial and that he owed thousands of dollars in back taxes.
In September he received notice that the farm is being classified as industrial by MPAC – the Municipal Property Assessment Corporation. The classification applies to manufacturing and processing operations taking place on a farm, including bottling.
The Millers started bottling milk at their Creemore farm in August 2012.
“I was really shocked,” said Miller. “I came up here (to town hall) right away. They were expecting me.”
The Millers have been asked to pay $37,000 for the past two years. Under the farm classification, Miller said they were paying just over $2,000.
He is hoping MPAC will change the classification.
MPAC Manager of Public Affairs Cathy Ranieri Sweenie said the classification came into effect in 1998. The industrial property classification includes, “Land used for or in connection with manufacturing, producing or processing anything.”
“MPAC received a building permit issued by Clearview Township which triggered an onsite inspection by MPAC staff. During the inspection, MPAC noted new buildings on the property and confirmed details that the dairy farm processes milk on site, which placed a portion of the value in the industrial property class,” said Ranieri Sweenie.
“Under the Assessment Act and Ontario Regulation 282/98, the industrial property classification includes land used for or in connection with manufacturing, producing or processing anything. Any property (or portion of a property) that fits this description must be classified as industrial.”
Miller said his dairy should be classified like others in the county and beyond.
“They are using the designation that all milk plants are industrial and we’re saying that this is an on-farm milk plant and not all milk plants are industrial because I found at least four in the province that are agricultural and one of them has been operating for 20 years as a milk plant and it’s agricultural,” said Miller.
On Nov. 10, Clearview council unanimously passed a motion in support of Miller’s Dairy’s request for reconsideration.
The motion was presented by Councillor Thom Paterson, who said although the reclassification would result in more tax revenue for the township, it is not good for agricultural business.
Council also agreed to express its disagreement with the assessment by writing to MPAC, the Premier and various ministers “expressing concern for the negative impact this assessment policy will have on our own municipal agricultural goals and on the province’s stated mandates for the agri-food sector.”
“While the township did not impose the new assessment, the township has accepted its responsibility to support the agricultural sector. As the largest contributor to our local economy, the township recognizes the need through its various departments and policies to support on-farm sustainability, investment and growth,” reported Paterson. “The township continues to support on-farm growth through innovations and on-farm value added production as a primary agricultural use, helping to sustain the farm operation. As a result agri-business is generating jobs in Clearview faster than any other economic activity.”
Council members agreed that changing the classification in Clearview and across the province would be in line with township and provincial initiatives in support of agricultural business.
Miller said when making the decision to bottle milk on-site he was not aware of the threat of reclassification.
“We would have asked for clarification but we would have been told we were all agricultural,” said Miller.
Miller said he doesn’t expect any answers from MPAC until the New Year.
“I was worried we would have to cough up the money right away but now we have a window,” said Miller.
Treasurer Edward Henley said the township isn’t involved in the assessment and doesn’t usually get involved in challenges.
The township does set the tax rate.
Based on $100,000 of assessment, the township collects $151 in taxes for a farm classification and $932 for an industrial classification. When factoring in county and education tax, the owner of a farm property pays $278 in tax per $100,000 of assessment and $2,960 for an industrial land use.
MPAC determines the classification based on land use rather than zoning.