Ottawa-area farm values skyrocket, latest MPAC notices show

Something's been growing abundantly on Ottawa-area farms in recent years, and it's not just the crops: property values have also been shooting up, but it's a harvest some rural landowners say they can do without.

Farm owners are receiving notices in their mailboxes from the Municipal Property Assessment Corporation showing their land values have risen by an average of 22 per cent a year since 2012.

• Ottawa MPAC assessments rise just 0.9% a year

That eclipses the meagre 0.9 per cent hike in property values for condos and houses in Ottawa, according to an earlier round of MPAC assessments sent out in the summer.

Buyers from southern Ontario

Sale prices of farmland have climbed steadily — and substantially — over the last four years, according to MPAC vice president Rose McLean.

While the value of farmland continues to rise across the province, eastern Ontario has outpaced other regions in recent years, a phenomenon McLean chalks up to buyers from outside the region boosting values.

"The [value] per acre in eastern Ontario is still lower than the values in southwestern Ontario. So, what we'd been seeing is buyers from southern Ontario, who are in search of lower-priced land, looking east."

At the same time some large operations in this region are expanding, McLean said.

"And those farmers are competing for land amongst each other, and that's driving up prices," McLean said.

So where an acre of agricultural land near Ottawa area typically sold for $4,000 a few years ago, it's now nearly doubled to about $7,000, she said.

'Astronomical' increase

Jamie Davidson, who owns a couple parcels in Ottawa's rural North Gower area, said he'd be happy with a mere 22 per cent increase in the value of his land.

Instead, a 100-acre property he bought three years ago for $120,000 — assessed at the time by MPAC at $154,000 at — has now been valued at $417,000.

"It blew my mind, seeing that it could go up that much over the course of four years," said Davidson. "That tells me I've got the best farmland in the world. Far from it."

In fact the land isn't tile-drained. Davidson's brother grows 30 acres of corn, but the rest of the land is virtually useless for farming. Davidson said he bought the land mainly for hunting and four-wheeling.

Davidson said he plans to challenge the assessment, though he doesn't relish the appeal process.

Federation urging farmers to speak out

Ontario Federation of Agriculture president Don McCabe has this advice for farmers: "If you think you have been improperly assessed and these numbers are bananas, it's up to you to contact MPAC and say, 'What happened?'"

McCabe said his federation is hearing from members across the province crying foul over the latest round of assessments,

"But I would not say it's a big wave," he says.

McCabe believes that on the whole, MPAC's assessments are a close reflection of what's happening in farm real estate, said McCabe.

Those increases were partly brought about by a corresponding increase in prices for cash crops, especially for corn and soybeans, McCabe said. Now both real estate and crop prices are levelling off, but those changes won't be reflected until the next round of assessments in 2020.

For now, current values are what's used to calculate municipal property taxes. That's what has many farmers worried.

McCabe is keen to see Ontario municipalities revisit their tax ratios for farms, and argues they should be lowered because farms don't receive much in the way of city services.

The City of Ottawa taxes farms at one-fifth of the residential tax rate.

Whether a farmer sees taxes increase, however, depends on whether the assessed value of the property in question rose by more than the 22 per cent average. Those property owners whose land value grew at a rate below the average could be in for a tax break.