Submitted to the Goat

Medical marijuana facilities in BC will not qualify for farm classification for property tax purposes.

The provincial government announced in late June that federally licensed medical marijuana, although recognized as a farm product by the Agricultural Land Commission, will not qualify for farm classification for assessment and property tax purposes.

The government says the decision will ensure local governments do not lose potential property tax revenues from Health Canada licensed production facilities. There are currently five facilities in BC licensed under the new Marihuana for Medical Purposes Regulations (MMPR), which came into effect on April 1, 2014. As of May 5, 2014, licenses had been issued to producers in Central Saanich, Maple Ridge, Whistler, Nanaimo and Spallumcheen.

The government says its position takes into consideration the nature of the highly regulated and secure facilities, and is consistent with the approach being taken in Alberta. It will continue to view medical marijuana production as an allowable farm use under within the Agricultural Land Reserve, and it should not be prohibited by local government bylaws. This is consistent with the Agricultural Land Commission’s interpretation of the Agricultural Land Commission Act.

The BC Assessment Act specifies which farm uses qualify for farm classification for property tax assessment purposes. If the income from these qualifying uses meets certain levels, the land and buildings in which the activities are carried out may be eligible for certain tax benefits. Farm class confers significant benefits to a property through low land values, reduced tax rates, PST exemptions and exemptions on farm buildings of up to 87.5% of value.

There are already approved activities on Agricultural Land Reserve land that are not eligible for farm classification for assessment and property tax purposes, such as farm or ranch tourism operations; sand and gravel extraction operations and winery and cidery facilities.

The exclusion from farm classification for property tax purposes will take effect for property assessments in the 2015 taxation year.