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Managed Forest Property Tax Issues
February 2005 Update
Last December, Natural Resources Minister David Ramsay and Finance Minister Greg Sorbara announced that the government would promote the conservation of Ontario's natural heritage through stronger property tax relief for landowners.
The announcement indicated that the “Managed Forest Tax Incentive Program is a program that encourages private landowners, through a reduction in property tax, to conserve and manage their forestland in a sustainable way. The province is working with a committee that includes stakeholder representatives to carry out the recommendations from an Environmental Bill of Rights review. The province will work with the committee to develop an assessment method that is similar to the approach used for farmlands.”
This was welcome news. Since April 2003, the OWA has been advocating for the return of farmland assessment for managed forest (MF) properties.
The government’s commitment to develop an assessment methodology for MF properties similar to the approach used for farmlands is considered a positive step forward in returning fairness to the MFTIP program. The OWA has accepted the government’s invitation to participate as a member of the committee. We will provide advice about implementing the recommendations contained in the EBR review report. We will also present our views concerning recommendations for a new assessment approach for MF properties.
Other members of the committee include the Ontario Forestry Association, Conservation Ontario, the Association of Municipalities of Ontario, Municipal Property Assessment Corporation and the Ministries of Finance and Natural Resources.
The association remains committed to resolving the MF property assessment issue. We are optimistic that with the government’s renewed commitment, new ways of strengthening the MFTIP program will be found. We will keep our members informed as discussions proceed and new information becomes available.
Plan Extensions
The MNR has recently advised the association that they will be providing a one-year extension for those landowners whose management plans were coming up for renewal in July 2005. All MFTIP participants will be receiving their annual confirmation notices sometime towards to the end of February that will provide confirmation of your next plan renewal date (the date will be in the upper right-hand corner of the letter).
August 2004 Update
In July, the Ontario Ministry of Natural Resources (MNR) released the report EBR Review R2003005, Managed Forest Tax Incentive (MFTIP), June 2004. This report summarizes the review of the MFTIP program that was recently completed under the Environmental Bill of Rights.
The report is a comprehensive document, and our association is still in the process of evaluating the information and the recommendations stemming from the review. A copy of the government report is available on MNR’s Web site at <http://ontariosforests.mnr.gov.on.ca/mftip.cfm>. The following eight recommendations are from the review.
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| Recommendation #1: |
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Ministry of Natural Resources (MNR) and Ministry of Finance (MoF) should continue to monitor participation of landowners in MFTIP to track net participation rates and review program success parameters.
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| Recommendation #2: |
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MoF, with MNR’s participation, will proceed with proposing revisions to O. Reg. 282/98 of the Assessment Act in order to realize MFTIP administrative efficiencies and program clarification.
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| Recommendation #3: |
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MPAC’s existing current use valuation procedures for managed forests, the intention of which is to determine assessment based on a sales comparison of other managed forest properties in the area, should continue to be used as the assessment methodology for managed forest properties.
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| Recommendation #4: |
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MoF and MNR should work together to update and clarify MFTIP program materials to more clearly communicate the property assessment and property tax system as it applies to MFTIP properties.
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| Recommendation #5: |
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MoF will work with MPAC to reinforce the need for more clarity and transparency for property owners on the valuation procedures for managed forests properties and to ensure that property owners receive more timely notification of any future revisions to property valuation procedures.
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| Recommendation #6: |
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MoF will work with MPAC to undertake a review and validation of the existing assessment methodology used for managed forest properties by an impartial third party.
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| Recommendation #7: |
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MoF and MNR will establish a committee, including stakeholder representatives and MPAC, to be involved in efforts to respond to issues with implementation of the assessment procedures in the coming year. This committee will also oversee the implementation of recommendations in this report.
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| Recommendation #8: |
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MNR will work with MoF to address how any potential changes to the MFTIP can support the government’s initiatives for the “greening” of southern Ontario.
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