Municipalities lose tax dollars and provincial funding with conservation land purchases

EVANSVILLE—The chair of the Manitoulin Municipal Association (MMA), Ken Noland, says that once lands are purchased in a municipality and designated conservation land, not only do the municipalities lose tax dollars, they lose provincial funding as well.

“We’ve learned that when property is purchased in a municipality that is designated as conservation land, not only does it become tax exempt and you lose tax dollars, you also lose a portion of the Ontario Municipal Partnership Funds (OMPF) as well,” stated Ken Noland, a member of the planning board at a board meeting Tuesday. “I feel we were intentionally misled on this issue by John Grant (of the Nature Conservancy of Canada (NCC)) in a meeting he had with (Burpee-Mills) council in August. He had said the municipality receives a current provincial formula allotment of $37 for each $10,000 assessment through the Ontario Municipal Partnership Funding (OMPF) designated as the assessment’s equalization grant as applied to weighted assessment, but this is not the case.”

“We’ve done research through contacting the Ministry of Municipal Affairs and Housing and the Ministry of Finance and found when property is given in tax assessments, it goes on a municipality’s weighted assessment,” said Mr. Noland. “So when property is purchased, and becomes tax exempt, not only do we as municipalities face a loss of tax dollars with lost assessment, we also lose out on funding,” said Mr. Noland. “We receive a double slap on tax exempt property.”

“And on these conservation lands, municipalities have to provide fire protection, snow plowing and other services,” said Mr. Noland. “But we receive less tax dollars, so it effects all municipalities in turn. When there is a loss of assessment everyone has to pick up the slack. As our assessment drops everyone has to be accountable to make up the difference to balance budgets such as the District Services Board (DSB).”

In the letter to Charles Sousa, Mr. Noland wrote: “the municipal councils of Manitoulin Island collectively affirm their concerns regarding the procedures presently in effect permitting the Ministry of Natural Resources of Ontario unbridled authority to designate tax exempt land deemed to meet provincial criteria for conservation status.”

“Many municipalities, especially those of Western Manitoulin, are experiencing significant loss of tax revenue due to increasing amounts of municipal lands being designated tax exempt status,” wrote Mr. Noland. “It appears that the OMNR does not deem it necessary to verify that the Assessment Act of Ontario Regulation No. 3 (1) 25’s criteria have been met in assessing applications for tax exempt status of conservation land.”

“According to the Conservation Land Tax Incentive Program’s (CLTIP) Land Eligibility Criteria, the applicants may apply for tax exempt designation under five criteria: wetlands, ANSI, endangered species, community conservation area, or conservation area under the authority of the Niagara Escarpment. An MNR spokesperson admitted during a conference call with Manitoulin municipal leaders on December 17, 2012 that an MNR representative may visit the proposed conservation sight, but this is not a necessity. If the land is the property of the NCC, the Escarpment Biosphere Conservancy or another large conservation group, it would be unlikely that any assessment would be ordered. The practice permits conservation groups unobstructed removal of land from the municipal tax rolls.”

It is recommended by Mr. Noland, “that all applications for conservation land tax exempt status require that an MNR representative inspect the property to prepare a detailed assessment to be used in determining if the land in question meets one of the five criteria as approved by the (OCLTI) program.

Secondly, Mr. Noland outlined his concern “that several provincial government initiatives over recent years have resulted in legislation authorizing consideration of various municipal lands for tax exempt status. When introduced, each of these initiatives was funded completely by provincial grants. As the cost of these programs became burdensome, the total cost was downloaded to municipal governments. Collectively, these downloads have resulted in an excessive burden to all Manitoulin municipalities. Not only does the municipality lose tax revenue, there is also a loss of a portion of the Ontario Municipal Partnership Funding designated as the assessment equalization grant ($37 per $10,000 of property assessment) as applied to the weighted assessment.”

“Conservation land has 100 percent tax exempt status resulting in 100 percent loss of assessment equalization grant, as well as 100 percent of tax revenue; managed forest program has 75 percent tax exempt status resulting in 75 percent loss of Northern Equity Grant as well as 75 percent of tax revenue,” wrote Mr. Noland. “Agriculture land has 75 percent tax exempt status resulting in 75 percent loss of assessment equalization grant as well as 75 percent of tax revenue; Native trust land has 100 percent tax exempt status proposed, which would result in 100 percent loss of assessment equalization grant as well as 100 percent of tax revenue (results of (land claim) negotiations are pending).”

He continued, “these provincial initiatives were introduced to provide benefits to all residents of Ontario. The residents of Manitoulin Island are not the sole beneficiaries of these tax breaks.” Mr. Noland also made the recommendation, “that the province resume responsibility for payment of grants in lieu of taxes to finance provincial initiatives which created these tax exempt status of lands on Manitoulin Island (conservation lands, managed forest lands, agricultural properties, and Native trust lands).”

Mr. Noland continued, explaining in part the, “terms of the provincial legislation designating conservation land tax exempt status does not limit the amount of acreage that can be given tax exempt status; with no consideration given to the amount of agricultural, managed forest, or Native land trust that presently exists in a given municipality. Some western Manitoulin municipalities have lost 16 percent to conservation alone.”

He recommends, “that representatives of the provincial government meet with a representative of the MMA to determine the optimal acreage limit of tax exempt conservation land to be designated for each Manitoulin municipality.”

Mr. Noland said the provincial assessment act regulations governing designation of tax exempt conservation lands does not require the MNR to include municipal representation at the table in determining the tax exempt status of municipal lands, nor is an impact statement prepared in determining the short and long term effects of a given declaration of tax exemption. He recommends that the head of council of the municipality in question be appointed to the MNR committee assessing the impact of the conservation tax exempt status in the municipality.

Mr. Noland adds in part, “in consideration of the serious negative impacts these tax exempt designations are placing on Manitoulin municipalities, the MMA would appreciate an opportunity to meet with you at your earliest convenience to resolve these issues.”

Tom Sasvari