Loading...
HomeMy WebLinkAboutThe Wingham Advance-Times, 1983-03-16, Page 374 = The Faro Edition, Week of Much 16, 1983 Tax reb Editor's note: Concerned that farmers may be confused about the property tax rebate announc- ed by agricultural minister Dennis TimbreII at the OFA convention in November, Merle Gunby, R. 1, Dungan- non, an OFA director has prepared the following ex- planation fo the tax rebate proposal. Gunby fears the farm population will be influenced by the "vocal fringe" which te propo•aI won't is attempting to persuade farmers their rights are being sold out from under them on this issue. Accord- ing to Gunby the changes proposed are really no differ- ent than the policy in place. Only the sematics are differ- ent. After many years of dis- cussion and lobbying be- tween OFA and the prov- incial government, Agricul= tore Minister Dennis Tina- brell, announced at trie OFA annual banquet in Novem- ber, property taxes on farm property would be rebated. This announced policy is to replace the fifty per cent rebate presently being paid to farmers. This policy was a major achievement of OFA in the early seventies. It has saved farmers in Ontario mil- lions of dollars over the last ten years. OFA was able to persuade the government to r de farmers' rights make this change because it was easy to demonstrate that farmers were paying an inor- dinate share of municipal taxes. There are two serious flaws in the present policy.. It was introduced by an Order in Council, which means it was a cabinet decision, not supported by any legislation, therefore, it could be rescin- ded or changed at the whim of cabinet at any time and it had to be renewed each year. For several years, OFA has been negotiating with the government for a more secure method of fairly levy- ing municipal taxes in rural Ontario. Municipal taxes pay for services to people in the municipality. All people liv- ing in a municipality require . about the same services whether they own a half acre lot or a five hundred acre farm. The large land owner does not necessarily have a GRANULATED UREA The versatile supplemental Nitrogen Getting the best possible crop yield in the face of rising input costs is the one sure way to boost crop profitability. And one of the best possible investments you'll make for potential yield increases is supplemental Nitrogen. Nitrogen promotes rapid growth, improves the quality of your crops, speeds maturity. Dry supplemental nitrogen, Urea is the easiest to apply. • for corn and top dressing fall wheat, • a cost efficient means of increasing hay and pasture your rate of planting • dry weed and feed • saves time, money and labour • custom application greater cash flow to pay those taxes indeed, probably the reverse the case. Since farmland requires little or no services, the gov- ernment agreed to exempt farmers from paying proper- ty tax on the agricultural portion of their assessment. Instead, they would pay the municipalities a grant based on the agricultural assess- ment in the municipality. r.. Turn to page 19a Lessons learned Hy Adrian Vos The Decisions Committee of the Ontario Farm Adjust- ment Assistance Program (OFA AP) was present at a recent Guelph farm confer- ence to relate its experiences with the 3,500 applications they have approved thus far. Peter Taylor, a prominent accountant, told of some of the lessons to be learned from processing so many applications. One is that any farmer having no more than 10 per cent equity is tech- nically bankrupt already. At the other end of the scale, any farm with 60 per cent equity is in an enviable position compared to most non-farm businesses. He said that he had asked himself why all farmers were not in trouble,when all faced the same uncertainty about interest rates and the same fluctuating prices. However, the majority didn't need assistance. The accountant then cited four reasons: (1) Almost all had inaccurate or inadequate records; (2) They borrowed on their equity, thereby robbing themselves of repayment ca- pabitity; (3) I11 -advised capital spend- ing); (4) Failure to adjust. (Instead of borrowing to service debts they should have raised money in different ways, for example by taking out less for living expenses, selling assets, or doing off -farm work). Taylor said he was appal- led at the inaccurate and ina- dequate records. It was obvious to him that these farmers were trying to learn to do in a hurry what they should have been doing all along. However, he was encour- aged by more recent im- provements. The minimum ail farmer must do is to work out a cash flow projection. It is not possible, he asserted, to make decisions unless one knows what money is coming in, and what has to go out. "Just because it's difficult is no excuse," he added. However, making the cash flow projection is just the beginning. It should be con- stantly monitored and am- ended. "If the farm input is wrong, the advice flowing from it will be the same." Taylor also took a shot at the lending institutions. While borrowing was done by the applicants, the lend- ers were only too willing to comply. "Many farmer's Turn to page 12. •