Escarpment Biosphere defends tax exempt lands

To the Expositor:

I note that the Manitoulin Municipal Association (MMA) is concerned about loss of property taxes on conservation land.

The idea that municipal services are paid for by the value of our land is theoretically a poor one. Yes, some services should be paid for that way, but probably not an entire municipal budget. Paying for police, welfare, libraries and public housing out of our household budget, after we pay the insurance and mortgage means people with lower incomes pay too high a share. Economists call it regressive.

Under the Mike Harris government and the so-called conservative “common sense revolution” there was a big realignment of “who does what.” Many services formerly paid from the provincial income tax base were downloaded to the municipalities. This included welfare and schools. This meant that people in cities with our business and industry could afford the best education.

The McGuinty Liberal government has bravely tried to upload many of these downloaded services back up the province and off the backs of homeowners and landowners. Welfare is now paid provincially. Although some of the cost of education comes from the assessment rolls, it is now pooled provincially so we all get roughly equivalent educations.

Wisely, the province has a very big “municipal partnership” fund, which grants municipalities adjustment income to compensate for low municipal assessment and higher services per assessment dollar. This funding is intended, among other things, to make up for exemptions from the tax rolls for nature reserves to protect rare species and wetlands. Provincial parks are paid for by provincial grants in lieu of taxes. If landowners choose exemptions for forests and farmland, the province provides grants to make up for the losses. Transfers from the province to Burpee Mills added up to $537,000 in 2009 for items including tax exemptions. Escarpment Biosphere Conservancy’s (EBC) exempted taxes would have cost about $2,200 out of $485,000 (less than half a percent) of total property tax revenue.

Nature reserves, wetlands, farmland and forests require very few municipal services. They rarely use police, fire, landfill, schools or other services, except perhaps roads.

On the other hand these properties bring important environmental, economic, tourism, recreation benefits. Our trails alone help bring at least 20,000 people to Manitoulin every year. The Ministry of Natural Resources (MNR) says that southern Ontario benefits from $84 billion dollars a year of these “ecological” services. For most people this is a real eye-opener. That’s $2,750 a year for every acre of green land taking carbon dioxide out of the air and providing a myriad of other services like tourism and the health benefits of recreation. EBC’s nature reserves in Burpee Mills bring an annual benefit of $650,000. The people of Ontario and Canada get these benefits, not just the people of Burpee Mills.

I appreciate the microscope lens the MMA has placed over the whole issue of financing municipal services. This uneven distribution of taxation on land that is not using services should be the real focus of the review. Far from rewarding landowners who provide green services from their land, high property taxes force us to try to develop that land by putting houses on it or removing the natural resources. This reduces the value green land is now bringing to our economy. I suggest that we work constructively with AMO, the Association of Municipalities in Ontario, to come up with improvements to the assessment system for our new finance minister. Potentially, some more services should be uploaded to the province, but maybe the municipalities need a broader source of income like gas taxes, GST, and maybe even a share of our income taxes to lighten the burden of property taxes. Gas taxes would be a much fairer way to pay for the roads we use to access our farms, forests, wetlands and nature reserves since gas users are road users. Other municipalities use development charges, vehicle licence fees and land transfer taxes to raise new revenue to lower property taxes.

We would like the opportunity to work constructively with the MMA to come up with suggestions to improve the funding model for municipal services.

Yours sincerely,
Robert Barnett
Escarpment Biosphere Conservancy