Reduced School Taxes KAP Victory

Commentary, Taxation, Robert Sopuck

Our farmers deliver to Canadian society the cheapest and most nutritious food supply in the world, but they often pay more than their “fair share” back to the rest of us. The best example is the outrageous level of education tax that farmers pay, or used to pay. The reason the unfairness lasted so long was simply due to the minority status of farmers. That made it easy for senior levels of government to make them pay a disproportionate share of the cost of public schools. After all, why irritate a lot of taxpayers when you can irritate just a few?

But some of that unfairness is about to change. In the recent Throne Speech, Manitoba’s NDP government announced that education taxes on farmland would be reduced in the current year by 33%, and reduced in 2005 by 50%. For years, Manitoba’s main farm organization, Keystone Agricultural Producers (KAP), has made the removal of the education portion of property taxes from farmland a top priority. It looks like all those years of lobbying are finally starting to pay off. And in cash, no less!

According to KAP, in 2003 farmers’ share of the education tax bill consumed 28% of their net farm income. Emphasis on the “net.” Based on these figures, KAP calculated that farmers were paying between four and ten times more in education taxes than their non-farming neighbours. KAP’s hard-working President, David Rolfe from Elgin, couldn’t be more pleased. But he acknowledged that farmers have a long way to go.

“This victory is an important one for Manitoba farmers, but there is still more work to be done,” says Rolfe. “The government needs to change the way that education is funded to find a more equitable and sustainable solution.”

Frontier Centre President Peter Holle agrees: “Education taxes are not sensitive to income levels, so they create tremendous problems for individuals with fixed incomes like seniors or those with highly variable cash flows like farmers who are vulnerable to weather disasters or political fiascos like BSE.”

In this particular case, farmers have won an important victory for all property owners, be they city or country. After all, what’s sauce for the goose is sauce for the gander as well. For now, farmers can look forward to a $200-$500 per quarter section rebate. And right before Christmas, to boot!

This decision by the government of Manitoba has effectively opened up the big question about how education is funded in the first place. Property taxes were ostensibly used to establish “local control” over the school system. But that control has been effectively usurped by senior levels of government, in the form of centralized curriculum development and “pattern” bargaining by teachers unions that has more or less equalized salaries across the province. These two factors have made the ideal of local control a moot point, if not a fiction.

Round one in the great school tax debate most certainly goes to KAP. The beneficiaries are firstly Manitoba’s farmers, but in the long run it’s good for all of us.