Agriculture's fiscal contribution to local governmentDoes B.C. agriculture pull its weight when it comes to contributing to the tax base of local governments in British Columbia? A recent pilot study by the B.C. Ministry of Agriculture and Lands set out to clarify the net tax contribution of farmland by investigating both property tax revenues and the cost of municipal services provided in farming areas. And while the study examined only Pitt Meadows and Abbotsford, the results provide some helpful insight on the impact of agriculture across the province. "Perhaps because of its varied nature, the tax contribution derived from farmland isn't as apparent to the public as that of a factory or a retail outfit", says B.C. MAL Land Use Planner Jim LeMaistre. "When people see a green field, they don't always make the connection to the adjacent dairy operation." But as LeMaistre and his colleagues discovered, the issue goes beyong perceptions and is impacted by how we identify and classify property tax revenues from various land uses in the ALR. The B.C. Assessment Authority allocates on-farm activities like agri-business, agro-industry and on-farm residences to the broader classifications of business, industry and residential. For example a farm may include a residence, a barn, a retail store and even a small processing operation for the packaging of fruit or berries. However, the ministry study found that only property tax generated from actual farmland is classified as farm. Surprisingly, a farm's barn is classified residential as it is judged to be an outbuilding from the residence. A retail storelocated on a farm is classified as a business and a processing operation is classified industrial. In order to better understand the amount of property taxes actually attributed to farmland, the ministry study reallocated property taxes paid to these on-farm activities from residential, business and industrial to a farm classification. A comparison of the two classification approaches shows the sample farm in question contributed substantially more when all on-farm activity was actually calssified as farm property tax revenue.
"A recent study looked at all property taxes on farm activities - not just farmland - and found that farms contributed roughly 12% of all property taxes in Abbotsford and Pitt Meadows." Using this approach, the Ministry of Agriculture and Lands examined every farm parcel in both Abbotsford and Pitt Meadows to reallocate on-farm activity. In both cases, the propertytax attributable to farmland jumped over three-fold to contribute roughly 12% of the property taxes in both municipalities. The next step was to determine the level of expenditures attributable to each land use category. For example, if major drainage works were completed in the agricultural areas, that expenditure was only allocated to farming. The last step was to determine the net fiscal impact of each land use category — the ratio showing the net contribution for each revenue dollar attributed to each category. The preliminary results from the study show that agriculture has a positive net fiscal impact on both local governments. "The study speaks to the sometimes misunderstood economic impact of agriculture in many communities", comment B.C. MAL Regional Agrologist Mark Robbins who worked on the study. "It was a real eye opener to all of us involved." The next step is to review the finding with all relevant agencies including the B.C. Assessment Authority and local governments. LeMaistre says ministry staff will be happy to review their findings with oter municipalities looking to get a clearer picture of the contribution agriculture makes to their communities. For more information, contact:
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