Start A Farm
Are You Ready to Start Your Own Farm Business?
Here's a list of basic resources to help set you in the right direction:
Ontario Ministry of Agriculture and Food (OMAF) resources
Choosing a Business Structure
More than half the farm businesses in Ontario are sole proprietorships (have one owner). Another third are partnerships. These are mostly spousal partnerships or other arrangements within a family. About 17% of farms are incorporated, and normally a financial or tax advisor will recommend this only when a farm reaches a certain size.
If you are thinking of running your business with someone else, give careful thought to your intentions with respect to the responsibilities of each partner. Consider whether you should consult a lawyer to make sure that you have properly recorded your plans. This could save you a lot of heartache down the road.
Registering a Business in Ontario
ONe-Source for Business in the Ontario government’s one–stop shop for everything you need to know about formally setting up a new business.
You are required to have an FBRN as soon as you report more than $7,000 of gross income from farming on your tax return. Having an FBRN allows you to access significant government funding, and the property tax reduction for farms.
- 2016 Information Sheet on the FBRN
- Agricorp registration website for the FBRN
- Exemption process for new farmers: if you do not yet qualify for an FBRN, you may be eligible for an exemption that admits you to funding and tax reduction programs. You must clearly demonstrate that the property is being farmed and how the farm business will gross $7,000 in future years. The length of the start-up period must be realistic for the commodity produced.
- Click here for a link to OMAF exemption form online
Premises Identification Number
A Premises Identification Number is required in Ontario for access to many funding and compensation programs. It is free and can be obtained by telephone or online. A Premises Identification Number, referred to as a Premises ID (PID), is a number identifying a parcel of land where agri-food activities occur. Premises Identification Numbers differ from business registration numbers (e.g. Farm Business Registration Number (FBRN), license, or other business identifiers as each one is linked to a specific parcel of land, not to a business.
Land is your most important asset, in which you will invest significant amounts of both time and money. Make sure you are making a decision that meets your needs and will stand the test of time. Before committing yourself to a piece of land, whether to rent or buy, read through the following publication, written by Farms at Work Director, Pat Learmonth.
- “Accessing Land for Farming in Ontario”
- Also keep an eye on the Finding Farmland feature of our website, where farm properties may be available for rent or purchase
Farm Property Class Tax Rate Program
Active farms in Ontario benefit from a 75% reduction in property taxes on the farmland portion of their land. Criteria:
- Land needs to be farmed
- Be assessed as farmland – check before you buy!
- Owner must have an FBRN or a farming tenant with an FBRN (or exemption)
- At least 50% Canadian ownership
- OMAF webpage on the Farm Property Tax Class Rate Program
- OMAF New Farm Property Owners and Property Tax
Managed Forest Tax Incentive Program (MFTIP)
Landowners who have their property classified as a 'Managed Forest' pay 25% of the municipal tax rate set for residential properties. The landowner must apply for this program, and create a written plan.
To be eligible you need to:
- own 4 hectares (9.88 acres) or more of forested land on a single property in Ontario on one municipal roll number
- be a Canadian citizen or permanent resident
- be a Canadian corporation, partnership
- be a trust or conservation authority
- have a minimum number of trees on each hectare (acre) of forest you own
- for more information, visit the MFTIP website
Conservation Land Tax Incentive Program (CLTIP)
Through this program, land that has important natural heritage features can qualify for a 100% property tax exemption. Properties that qualify are determined by the province. This tax program can apply to part of a farm, further reducing property tax.
For more information, visit the CLTIP website.