How Ontario’s managed forest tax incentive program (MFTIP) works, why it is useful, and its benefits to private landowners and the environment

Abstract

The vast majority of Ontario’s forest is owned by the Province. However, most of the deciduous and Great Lakes- St. Lawrence forest is privately owned. Government has very little control over private land. To encourage good forestry practices on private lands the Managed Forest Tax Incentive Program was created. To be enrolled in the program, landowners must have a minimum of four hectares of eligible forested land and have a Forest Management Plan approved by a registered approver. Participants of the program have eligible lands taxed at 25% of the municipal rate. The program benefits the environment. Studies have shown that the participants are more likely to remove invasive species and plant native species than woodlot owners not enrolled. Landowners benefit by having reduced tax rates and increased knowledge of their property. The major limitation is that most woodlots are owned by farmers as part of a larger property. Their farms are already taxed at the same rate and the MFTIP requires additional work and limits what activities they can do on their land. Reducing the taxation rate below that of the farm tax may increase enrollment. The other issue is that the program is poorly advertised, and many landowners are unaware.