If PEC lowers farming costs, who pays the difference?

A community article on the second question of the October 5, 2026, mayoral debate

The Prince Edward Federation of Agriculture put two proposals to the mayoral candidates at the October 5 debate: reduce the property tax ratio for farmland, and exempt all new farm buildings from development charges. Both could ease a farmer's costs. They work differently, though, and the question that connects them is one the whole County can help answer: if we collect less from farms, who covers the difference, and what do we gain?

What farmers pay now

PEC's 2026 finance report sets the farmland tax ratio at 0.25. Eligible farmland and associated farm outbuildings are taxed at one-quarter of the municipal residential rate. The report projects $1,313,524 in property tax revenue from the farmland class in 2026, or 2.31% of the County's roughly $56.9 million property tax levy.

That is the farmland class, not the sum of everything farm households pay. MPAC explains that a farmhouse and its surrounding residential land are generally classified separately, while a winery, shop or other non-farm use may have a different classification. The ratio applies to eligible property in the farm class; it does not reduce every line on every farmer's tax bill.

“I'm not in a position that I could say if that's valid at this point or not.” Ernie Margetson, on increasing farm tax relief, mayoral debate, 22:21

Margetson referred to the provincial farm tax program, including land rented to qualifying farmers. That program determines whether property qualifies for the farm class. The question put to candidates concerned a separate local decision: the ratio PEC council sets for that class. Ontario law permits a single-tier municipality to set it below 0.25. Margetson did not commit to a reduction. Brad Nieman also said he would want the information before deciding.

“I would personally support that. But that doesn't mean council will. The mayor is only one vote on council.” Terry Shortt, on reducing farmers' tax burden, mayoral debate, 25:03

Shortt gave the clearest yes on the tax question. He said he would support a reduction and move on it, while recognizing that council would have to agree. He did not propose a new ratio or identify how the County would make up the revenue. His commitment gives residents a concrete follow-up question: what reduction would he bring to council, and what would he ask other property owners or the budget to absorb?

What would a change cost? If the residential rate were held fixed, cutting the ratio from 0.25 to 0.20 would reduce the farmland class's projected contribution by roughly $263,000, using the County's 2026 figures. That is an illustration, not a forecast of the final tax bills. If council kept the same spending and total tax levy, it would have to adjust rates or find another source of funding. With PEC's tax base dominated by residential property, a shift toward residential owners seems a reasonable expectation, but its exact distribution needs a proper municipal calculation. Council could also make different budget choices.

Would the savings reach the farm business making the day-to-day decisions? An owner who farms and an owner who rents land to another farmer both have an interest in the tax bill, but the benefit to a tenant depends on their lease. Farm size and assessed value would also affect the dollar amount of relief. Those are reasons to ask whom a broad ratio reduction helps most, alongside the case for helping every eligible farm property.

The charge for building a barn

Development charges are collected when qualifying construction proceeds and are meant to help pay for capital costs associated with growth. This is a different question from annual property taxes. PEC's published 2026 county-wide rate schedule includes $2.13 per square foot for agricultural buildings. At that listed rate, a 5,000-square-foot building would face about $10,650 in county-wide development charges, before considering the project's exact classification and any applicable provisions. The schedule allocates most of the agricultural-building rate to highways and fire protection.

“On the new farm building exemption: Yes, I do support that for various reasons.” Brad Nieman, mayoral debate, 23:53

Nieman distinguished farm buildings from residential construction on a farm.

“As long as they're farm buildings, they're not an extra house on the property—they're farm buildings. I could understand that and I could support that as well.” Terry Shortt, on exempting new farm buildings, mayoral debate, 25:03

Shortt likewise supported an exemption for farm buildings, while drawing a line at an additional house on the property. Both candidates' answers raise a practical question: what counts as a farm building when a project combines growing, processing, retail, events or housing? An exemption would also require council to decide how to fund any growth-related costs the charges currently cover.

“We don't have the development charges in place.” Ernie Margetson, mayoral debate, 23:10

Margetson said he wanted to assess what farm buildings would contribute before deciding on an exemption. His statement about the charges needs clarification. The County's older development charge FAQ says its previous by-law exempted non-residential farm buildings. But the County subsequently passed 2023 development charge by-laws that list agricultural buildings as a charge category, and it publishes the 2026 rate above. Was Margetson referring to a narrower charge or a proposed change? The public record gives him an opportunity to explain what he meant.

The Ontario Federation of Agriculture wants a province-wide statutory exemption, arguing that barns, silos, grain bins and similar facilities do not create the growth-related infrastructure demand that development charges are intended to fund.

That is a case worth hearing, especially when a farmer needs to invest before earning a return. The County's schedule nevertheless attributes some costs to new agricultural floor area. What evidence supports that allocation in PEC, and how much money does the County actually collect from farm buildings in a typical year? We found the posted rate of $2.13 per square foot for agricultural buildings, but not a public total for that particular category. Without it, we cannot responsibly say what a full exemption would cost the municipal budget.

A choice the whole County shares

Cutting the farm tax ratio would change an ongoing contribution from eligible farm properties. Exempting new farm buildings would remove an upfront cost for those undertaking construction. One may help a farmer's annual cash flow; the other may affect whether an investment goes ahead. PEC also has a Municipal Agricultural Grant program for specific obstacles facing the sector. Broad relief and targeted help can be considered together, with honest questions about reach and cost.

We invite mayoral candidates, current and former councillors, council candidates, County finance staff, farmers, landowners and tenants to add what the record cannot yet tell us:

• If you would lower the farm tax ratio, what ratio would you choose, and how would you fund the resulting shift?

• How much did PEC collect in development charges from agricultural buildings in each of the last three years, and what capital costs are those charges intended to cover?

• Which farm buildings should qualify for an exemption, particularly when farming and other business uses share a structure?

• What kind of relief would make a meaningful difference to working farms, and who would receive it?

Share a comment below or email hello@pecconnect.ca. Please include a link, document or specific example with factual claims so others can follow the evidence. We will review corrections and substantive contributions and follow up as the discussion develops.

The goal is to understand the trade. If the County chooses to collect less from farmers, residents deserve to know where the cost goes; farmers deserve to know whether the relief will reach the decisions that keep their operations viable.

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Debate quotations are from the timestamped transcript supplied to PEC Connect. Shortt's response is summarized from PEC Connect's debate notes because his verbatim answer was not included in the excerpt.