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
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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.
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