A Cautionary Tale from the Environmental Commissioner of Ontario by Shirley Dolan

The Environmental Commissioner of Ontario (ECO) is cautioning the Ministry of Natural Resources and Forestry (MNRF) that assessment changes by the Municipal Property Assessment Commission (MPAC) are likely to be detrimental to the forests of Ontario. The MNRF manages a program called the Managed Forest Tax Incentive Program (MFTIP) which offers a property tax reduction for landowners who join the program in exchange for following the prescribed forest management practices of the MNRF. The program, introduced in 1997, is very popular with more than 10,700 landowners participating by 2004.

The problem, according to the ECO, is that another branch of the Ontario government is jeopardizing the program by changing the assessment rules. Around 2003, MPAC began changing its methods of assessing managed forests such that they were assessed for their potential value for residential or commercial development rather than at the same rate, as promised by MNRF in 1997, as farmlands.

In a review of the program, ECO “raised concerns about how properties were being assessed for taxation purposes – an issue that began to intensify for managed forest property owners in early 2003. The applicants argued that around that time, the Municipal Property Assessment Corporation (MPAC), a municipally funded, not-for-profit corporation that assesses the value of property in Ontario for taxation purposes, began changing its methods of assessing the value of managed forest properties. (MPAC states it made certain changes in April 2003 at the direction of the Ministry of Finance, the ministry that oversees the Assessment Act, the legislation MPAC uses to administer property tax assessment.) According to the applicants, the changes to MPAC’s property value assessment methodologies mean that many managed forest owners are required to pay substantial increases in property taxes, undermining the goals of the MFTIP program.”

In addition to the harm to the program, is the harm to the trust in government by property owners regarding programs of this nature. MNRF, in its response to the ECO review, acknowledged that property owners were not told of the assessment increases by MPAC.

The ECO has recommended that “Any new assessment methodology for managed forests must properly recognize a property’s forest productivity value, and not its development value”.

You can read more about the ECO review and MNRF’s response at http://ecoissues.ca/index.php/Managed_Forest_Tax_Incentive_Program

Related article: Many news agencies, including the Sarnia Observer, are reporting that wind turbines are enjoying a sweetheart deal from MPAC. Not only are developers given generous subsidies to encourage wind energy development, but it appears that they are also enjoying low assessments. http://www.theobserver.ca/2015/05/12/pov-lower-property-assessments-just-another-subsidy-for-wind-industry?utm_source=addThis&utm_medium=addthis_button_facebook&utm_campaign=Wind%27s+sweetheart+deal+%7C+Sarnia+Observer